The Motley Fool

2 dirt-cheap UK dividend stocks to buy for 2022

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.

The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.
Image source: Getty Images

I think now’s a great time to go shopping for cheap UK stocks. The London Stock Exchange is packed with companies that can provide excellent shareholder returns regardless of broader economic conditions. This is why I have continued investing in UK plc despite problems like runaway inflation and the ongoing Covid-19 crisis.

Now is a particularly great time to go shopping for bargain lovers like me. The underperformance of British stocks versus their European and US counterparts in recent times provides an excellent buying opportunity. Here are two dirt-cheap UK shares I’m considering buying for my Stocks and Shares ISA right now.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Looking good

I believe that Lookers (LSE: LOOK) shares could be too cheap for me to miss. As well as trading on a forward price-to-earnings (P/E) ratio of 5.6 times, the retailer carries a meaty 4.1% yield for 2022.

I think the stratospheric rate at which electric vehicles are selling in Britain provides outstanding opportunities for Lookers. Sales of battery-powered and hybrid vehicles rocketed 17.9% year-on-year in October, the Society of Motor Manufacturers and Traders said. I expect demand to continue rocketing too as costs of producing these new-age vehicles steadily fall and concerns over the climate emergency inevitably grow.

I’m also encouraged by government plans to make it easier for EVs to be charged, a critical factor for car buyers to consider. From next year, all new homes and buildings in England will need to install EV charging points, it was announced today. It is thought this will boost the number of charging points being installed each year by 145,000.

But Lookers still faces the risk, like other car retailers, of uncertainty going into 2022 as supply chain issues continue to dent auto production. 

A cheap UK share for an economic slump

Economic conditions in Britain are becoming increasingly alarming as soaring inflation and supply chain problems persist. Just today, EY Club slashed its GDP growth forecasts for 2022 by almost a full percentage point, to 5.6%. It warned of weak, sub-2% annual growth by the middle of the decade too.

Investors like me need to consider the threats and the opportunities a deteriorating UK economy creates. I am thinking of investing in Begbies Traynor Group (LSE: BEG). I think trading here will pick up as the number of corporate casualties might unfortunately soar from 2022. This cheap UK share provides financial rescue and recovery services for companies. It is also specialist in the field of corporate insolvencies for both businesses and individuals.

Today, Begbies Traynor trades on a forward price-to-earnings growth (PEG) ratio of just 0.5. This is comfortably inside the benchmark of 1 that suggests a stock could be undervalued. Moreover, the support business carries a handy 2.3% dividend for the financial year to April 2022 too.

I’d buy Begbies Traynor even though its penchant for acquisitions creates a myriad of risks, such as disappointing profits generation at a newly-acquired business.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

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 us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.