Have £1,000 to invest? 2 brilliantly-valued dividend stocks that I’d buy and hold for 10 years

These income shares trade on undemanding valuations today. I’d be happy to buy and hold them for at least a decade. How about you?

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If you’re looking for prettily-priced stocks with dividend yields that surge past current inflation rates in the UK, then you can do a lot worse than to pay WH Smith (LSE: SMWH) close attention today.

The newsagent struck its cheapest price for 15 months in recent sessions. And the scale of the downward spiral is quite flabbergasting, given the robust trading statement the FTSE 250 firm had issued just prior to October’s decline, in which it again highlighted the potential of its Travel arm.

Indeed, City analysts juiced up their earnings forecasts following the release and they are now predicting an 18% bottom-line rise in the year to August 2019. And this, allied with that aforementioned share price drop, means that WH Smith boasts a dirt-cheap forward sub-1 PEG reading of 0.9.

Time and again I’ve lauded the brilliant profits potential of the business’s Travel division and I’m pleased to see that Smiths continues to think big here. Its stock value surged on Tuesday (up 7% as I type, in fact) following news that it has agreed to buy US travel retailer InMotion for £155m.

The company, which sells digital accessories in airport locations Stateside, marks a significant step in WH Smith’s international expansion programme. It doubles the size of the British firm’s international travel operations and gives it a significant foothold in the US, the world’s biggest travel retail market.

It’s not difficult, then, to envisage profits continuing to rip higher beyond the current year, and to continue dragging dividends with it. In the meantime, investors can sit back and enjoy the predicted payout of 57.2p per share for the current fiscal period, a figure that yields a fatty 3.1%.

Trayning higher

Fortunately, Begbies Traynor Group (LSE: BEG) hasn’t endured the sell-off affecting much of the broader market in recent weeks.

The corporate insolvencies specialist thrives in times of challenging economic conditions. After all, and with fears over the health of the UK economy in particular rising, it’s not a surprise to see its share price rise in October.

Data released today from the Insolvency Service shows why investors have been getting increasingly bullish over Begbies Traynor. The government body advised that the number of corporate solvencies reported between July and September leapt almost 20% year-on-year, representing the fastest increase since the financial crisis almost a decade ago.

Right now, Begbies Traynor is expected to record a 9% earnings rise in the year to April 2019, and another 4% rise in fiscal 2020. It’s very easy to see these City brokers significantly upgrading their figures in the months to come, as the turbulence hitting the UK only looks set to rise, as the fallout of the 2016 Brexit referendum drags on.

As such, I reckon the small-cap’s forward P/E ratio of 16.4 times actually looks pretty undemanding right now. With anticipated dividends of 2.6p and 2.7p per share for this year and next, respectively, offering up chunky yields of 3.6% and 3.7% too, I reckon it’s a great share to buy and hold onto for years to come, and particularly so if Brexit negotiations take a turn for the worse.

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 recommended WH Smith. 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.

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