With the stock market showing signs of stability after last year’s sell off, I’ve been looking for buying opportunities.
My research has identified three FTSE 250 dividend stocks that could be of interest. I reckon this trio could deliver a market-beating mix of income and growth over the coming years.
A global view
Recruitment firm PageGroup (LSE: PAGE) may have its roots in the UK, but today it’s a truly global business. That means the group’s exposure to local risks, such as Brexit, should be limited.
Trading figures released today suggest to me that this approach is still working well. During the final quarter of 2018, gross profit rose by 15.4% compared to the same period a year earlier.
Highlights included a 22% rise in Asia Pacific and a 32% increase in the USA. Even the UK managed a 2.1% gain, despite Brexit uncertainty dampening hiring activity.
Despite this solid performance, the shares are down 5% at the time of writing. One reason for this is probably that today’s figures are in line with existing market forecasts. So there’s no surprise reason for short-term traders to push up the share price.
However, for Foolish long-term investors, I think this diversified recruiter could be worth a look. PageGroup ended the year with net cash of nearly £100m, and offers a forecast dividend yield of 5%. I’d buy.
This compares very well
One of my favourite technology stocks is price comparison website Moneysupermarket.com Group (LSE: MONY). I like it because it’s very profitable, with an operating margin of 30%. Capital expenditure is also limited, because the only thing the firm has to pay for is marketing and software development.
These qualities mean that Moneysupermarket generates a lot of surplus cash. This has enabled management to increase the dividend by an average of 12.6% per year since 2012. This has provided shareholders with an income that’s risen much faster than inflation or wages.
One potential concern is that this business is now fairly mature, with limited growth potential. This may be true, but I don’t think investors should rule out future growth. The company is currently investing in its next generation of comparison services, which are said to include automated switching and mortgage comparison.
Even without these new offerings, the group still managed to generate 6% revenue growth during the first nine months of 2018.
With new products and services on the way, I think the future looks promising. In the meantime, the shares offer a well-supported yield of 3.7% and remain on my buy list.
A recovery buy
For shareholders in temporary power generation group Aggreko (LSE: AGK), the last six years have been tough. The group’s share price has fallen by 65% from its all-time highs of 2,300p+ in September 2012.
However, the group’s underlying revenue rose by 11% during the first nine months of 2018 and Aggreko has reported a number of new contract wins recently. Broker forecasts suggest profits could rise by 7% in 2019.
I see this as a good long-term business that’s large enough to adapt to changing market conditions. The shares look affordable to me, on 14.5 times 2019 forecast earnings, and with a 3.6% dividend yield. Now could be a good time to buy, before the market wakes up to this long-awaited turnaround.
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.
Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. 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.