Why I think you can rely on these 2 income stars to boost your retirement returns

These two income stocks look like long-term champions.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Harvey Nash (LSE: HVN), the global recruitment and professional services group, is highly optimistic about the prospects for the global employment market.

Even though other recruitment services firms may be fretting about the threat Brexit poses to their business models, Harvey Nash’s management is not going to let these concerns slow growth. In a trading update issued today, ahead of the company’s annual general meeting, chairman Julie Baddeley said that the company is actively considering a number of acquisitions to help generate growth, especially in the market for technology digital talent. 

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Management expects to make several purchases before the year is over subject to “stringent financial hurdles”.

The pre-AGM statement also notes that the group is performing in line with management expectations for the fiscal year so far despite the geopolitical headwinds including the UK general election. A key measure of contract work in progress is “comfortably ahead of last year”. Considering this statement, it looks as if the firm is on track to meet City expectations for the fiscal year ending 31 January 2018. 

The City is expecting the company to report earnings per share growth of 3% for the financial year, taking pre-tax profit to £9.1m, up from £8.5m last year and earnings per share to 9.1p giving a P/E ratio of 8.8 at current levels. As well as this low valuation, shares in Harvey Nash also support a highly attractive dividend yield of 5.3%. The per share payout of 4.3p is covered more than twice by EPS and analysts are expecting payout growth of 7% next year, giving a dividend yield of 5.7% at current prices.

Committed to the dividend 

Harvey Nash isn’t the only cheap dividend stock around at the moment, larger transport business Stagecoach (LSE: SGC) also looks to be an undervalued income play.

Yesterday’s results from Stagecoach showed just how committed management is to the company’s dividend payout to investors. For the year to 29 April, revenue rose by around 2%, but earnings per share declined from 17.1p to 5.5p thanks to some exceptional charges. 

However, management confirmed that the company’s dividend payout for the year would rise by 4.4% to 11.9p, which is equal to a yield of 6.4% at the time of writing.

After a tough 2016 financial year, City analysts expect Stagecoach’s outlook to improve for the year ending 30 April 2018. As last year’s exceptional charges are not supposed to be repeated, analysts have pencilled-in earnings per share for the year of 21.2p. For the period a dividend payout of 12.2p is expected, giving a dividend yield of 6.6% at current prices. These forecasts also indicate that the dividend payout for the next financial year will be covered 1.7 times by earnings per share. Further, after recent declines shares in Stagecoach currently trade at a forward P/E of 9.9. If it’s income at a reasonable price that you’re after, Stagecoach could be a great buy.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Stagecoach. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Investing Articles

2 cheap UK shares to buy right now!

Recent market volatility means many top stocks now trade at rock-bottom prices. Here are two cheap UK shares I'm thinking…

Read more »

Rolls-Royce's business aviation engine, the Pearl 700
Investing Articles

The Rolls-Royce share price is just pennies. Am I missing something?

As the Rolls-Royce share price lingers in penny stock territory, our writer revisits the investment case that has attracted him…

Read more »

Compass pointing towards 'best price'
Investing Articles

How to put a valuation on the Woodbois share price

The Woodbois share price has fallen from its recent spike, so should I buy now? And how can I work…

Read more »

Inflation in newspapers
Investing Articles

I’d fight inflation with these 2 FTSE 100 dividend shares

With inflation hitting a 9%, I'm boosting my passive income and turning to these two FTSE 100 dividend stocks.

Read more »

New Ways of Investing - Hands Only Using Smart Phone
Investing Articles

2 cheap Footsie stocks to buy for BIG dividends!

The recent stock market sell-off leaves plenty of top stocks looking too cheap to miss. Here are two great Footsie…

Read more »