2 under-the-radar dividend stocks I’d buy today

Royston Wild discusses two stocks with hot dividend potential.

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Whilst investor appetite for Tritax Big Box (LSE: BBOX) may have dialled back a bit in recent weeks, I am convinced the company’s share price will resume its upward trajectory sooner rather than later.

The business, which provides ‘Big Box’ warehouses to blue-chip retailers and manufacturers, is continuing to reap the rewards of Britain’s lack of gigantic logistics spaces, a problem worsened by the stratospheric growth of online retailing.

Indeed, chief executive Colin Godfrey hit the nail on the head earlier this month when he commented that “the development of the Big Box logistics market remains in its infancy, with operational efficiencies and e-commerce likely to drive occupational demand for some time to come.”

Tritax saw its contracted rent roll per annum rise £108.7m between January and June, up 9% year-on-year, while the value of its portfolio soared 10.9% to £2.1bn. Meanwhile, pre-tax profit soared 49.9% in the period, to £80.5m.

And Tritax remains busy on the acquisition front to harness its vast revenues opportunities. Just last week the business exchanged conditional contracts to purchase a development site at Littlebrook, Dartford, which it plans to utilise “for the efficient distribution of goods across London and the home counties.” Construction is scheduled to begin during the autumn of 2018.

Mammoth yields

Even though City analysts expect earnings to cool to 4% in 2017, this is not expected to put the shackles on further excellent payout growth. Indeed, last year’s 6.2p per share payment is anticipated to stomp to 6.4p in the present period. Consequently Tritax sports a jumbo forward yield of 4.5%.

And the good news does not cease here. Helped by a predicted 9% profits advance in 2018, the dividend is predicted to rise to 6.6p, meaning that the yield moves to a formidable 4.6%.

Keep on trucking

The Square Mile is also pretty excited about Stobart (LSE: STOB) and its dividend-paying capabilities in the medium term.

Despite an expected 33% earnings slip in the period to February 2018, the infrastructure and support services star is expected to ratchet last year’s 13.5p per share payout to 17.5p. This creates a chunky 6.1% yield.

And in fiscal 2019, the total dividend is expected to clock in at 18.2p, nudging the yield to a blockbuster 6.4%.

With the fruits of recent divestments helping to power dividends skywards, I am convinced the London-headquartered firm can continue delivering monster payouts long into the future, and not only due to the prospect of further asset shedding.

Indeed, the boffins over at Edison recently commented that “over the long term, we believe the group could unlock significant value from its core assets, especially Southend Airport, which is set to be a major beneficiary of airport capacity constraints in the South East.” The company remains on course to move 2.5m passengers from the Essex airport by the close of the next calendar year, it says.

As a consequence, a 37% earnings rebound is predicted for next year. And I reckon further explosive growth can be expected as the exciting growth strategies spanning its Aviation, Energy and Rail businesses take off.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

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