Dividend stocks aren’t exactly covering themselves in glory right now. A whole host of previously big payers have cancelled their payouts due to Covid-19. Furthermore, I don’t think we’ve seen the last of them.
However, I reckon there are still a good number of companies capable of delivering dividends for investors. Among them are FTSE 250 firms Centamin (LSE: CEY), Primary Health Properties (LSE: PHP) and Greencoat UK Wind (LSE: UKW). Here’s why I like these three businesses, and their dividend prospects.
Dividend stocks: gold star
I’ve long been a fan of gold miner Centamin. Its Sukari mine in Egypt is a world-class, low-cost, long-life asset. This means it can make profits (and pay dividends) even at times when the price of gold is relatively weak. Its strong, cash-rich balance sheet and pipeline of future growth prospects add to the investment appeal.
The company took early action to maintain safe operations at Sukari. And it said last week: “As of 5 April 2020, Centamin has no recorded cases of Covid-19 on-site and has experienced no material disruption to operations, supply chain or gold shipments.“
Highly attractive 5.8% yield
Centamin’s board told us in January it’s proposing a final dividend of $0.06 per share for 2019, which would bring the total for the year to $0.10 per share (8p at current exchange rates). At a share price of 137.6p, the yield is a highly attractive 5.8%.
Dividend stocks: property pick
Primary Health Properties owns a portfolio of modern primary health facilities in the UK and Ireland. I like the fact 90% of the group’s rent-roll is paid directly or indirectly by the UK and Irish governments. Because of this, it’s one of the most reliable dividend stocks around.
In a recent trading update, the company said it’s cash and undrawn loan facilities give it “significant liquidity headroom.” It also said: “The company intends to maintain its strategy of paying a progressive dividend.”
Primary Health paid 5.6p per share dividends in 2019, and has signalled 5.9p per share for 2020. This would extend its record of annual dividend increases to 24 years. At a current share price of 157.2p, the prospective yield is a solid 3.8%.
Dividend stocks: infrastructure income
Greencoat UK Wind is the leading London-listed renewable infrastructure investment company. It’s invested in 36 UK wind farms, most of which are wholly owned or majority owned. I see this as another relatively low-risk business, with reliable cash flows and dividends.
In a trading update on 20 March, management said portfolio generation year-to-date was 20% ahead of budget. And forward power prices for the remainder of the year are relatively stable. The update also added: “The target dividend of 7.1p per share is expected to be well covered.”
Inflation-linked payout
Since listing on the stock market in 2013, Greencoat has delivered on its aim “to provide shareholders with an annual dividend that increases in line with RPI inflation while preserving the capital value of the investment portfolio in real terms.” I expect this to continue, despite Covid-19.
At a current share price of 143p, the prospective dividend yield is 5%. This makes Greencoat another of my favoured dividend stocks to buy right now.
