1 cheap FTSE 250 dividend stock I’d buy for my Stocks and Shares ISA today

Why this Fool likes the healthy growing dividend at Primary Health Properties plc (LON:PHP).

| 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.

Finding buy-and-forget investments providing dividends that are more than likely to rise over time is no easy matter. Add to this, a reasonable assurance that a company’s product or service will continue to be in vogue over time, and you have precious few stocks to settle on. If you have been searching for such a stock, Primary Health Properties (LSE: PHP) may be right up your street.

Let’s begin with the company’s business model. The principal activity of the company is the acquisition of healthcare property in the United Kingdom and the Republic of Ireland. Specifically, it focuses on the ownership of freehold or long leasehold interests in purpose-built healthcare facilities, which are leased to general practitioners, government healthcare bodies and other associated healthcare users. As you may correctly surmise, the ultimate guarantor of rents paid is the government; certainly an added bonus.

Those familiar with Warren Buffett will know that one of the key requisites for any of his investments is a top-drawer CEO. It is easy to understand why, since in the long term, profitability cannot be sustained with poor management. At the helm of Primary Health Properties is just such a consummate professional in the shape of Harry Hyman. This Cambridge-educated accountant founded the company in 1996 and has been the managing director ever since.

The management team at PHP have consistently driven the company from success to success. This has been true during good times and bad. Whilst the financial meltdown in 2008 is becoming a distant memory, it’s worth remembering that during this period, PHP increased its dividend and annual revenue improved.

More recently, Hyman and his talented crew have shown conspicuous ability. Upon review of the 2013 annual report, the company had a portfolio of 259 properties worth £941.6 million, a revenue of £42 million and an annual dividend of 4.8p a share. According to the most recent annual report released in February 2019, total assets are now valued at £1.5bn, revenue is around £76.4 million and the dividend has increased to 5.4p per share. Particularly noteworthy for dividend investors, the increase in payout represents an average annual increase of 2.1%.

Those who have been followers of this company may remember the merger that took place in 2013 between PHP and Prime Public Partnership (PPP). At that time, PPP was around a third of the size of PHP. This union produced numerous cost benefits, which have led to positive rewards for shareholders. The experience gained by Hyman’s team will now be applied to the recently announced merger with MedicX.

Given PHP’s business model and the success of the PPP acquisition, it would seem an opportune time to consider PHP for the long haul.

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 considered so you should consider taking independent financial advice.

Bryan does not own shares in any company mentioned in this article. The Motley Fool UK has recommended Primary Health Properties. 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

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

1 dividend stock with a juicy yield to boost returns!

This Fool likes the look of this dividend stock to boost his passive income stream and explains why he would…

Read more »

Happy male couple looking at a laptop screen together
Investing Articles

Here’s 1 growth stock primed for long-term growth and returns!

Jabran Khan is hunting for a growth stock to boost his holdings. Could this financial advisory business be the right…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

3 FTSE 250 shares I bought for extra dividends

I plundered the FTSE 250 index to find these three cheap stocks with ailing share prices. All three firms pay…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

I’m buying cheap FTSE 100 stocks to boost my passive income!

Buying dividend stocks today could considerably improve the amount of passive income I make. Here are some FTSE 100 stocks…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Am I crazy for buying Royal Mail shares?

Royal Mail shares have collapsed by almost half in 2022. And with group profits falling and strike action under way,…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

2 recession-resistant stocks to buy right now

After the pandemic slump, we're now facing a UK recession. Many are looking for recession-resistant stocks to protect their money.

Read more »

Engineer Project Manager Talks With Scientist working on Computer
Investing Articles

This FTSE 100 stock continues to fall! Should I buy shares?

This Fool takes a closer look at a FTSE 100 quality assurance stock. As the shares continue to fall, is…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

Is the Rolls-Royce share price about to surge?

The Rolls-Royce share price continues to fall as market patience wears thin. But could it be on the brink of…

Read more »