My favourite dividend shares to buy today

This Fool highlights his favourite dividend shares to buy today considering their income and growth prospects over the next five years.

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Some of my favourite dividend shares to buy today are on sale. The recent market volatility has pushed down the valuations of high-quality dividend stocks across the market. I think it offers an excellent opportunity for me to snap up these investments at a discounted price

Dividend shares to buy today 

The first company on my list is the financial services group TP Icap (LSE: TCAP)

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At the time of writing, shares in this enterprise offer a dividend yield of 8.9%. According to City analysts, the yield could rise to 11% next year. 

This business specialises in trading financial instruments for clients around the world, a model that can reap significant rewards when volatility surges. Indeed, the company’s operating profits have bounced over the past couple of years as market volatility has jumped. 

Unfortunately, rising costs have weighed on the firm’s bottom line. This pressure is expected to dissipate over the next two years. As costs fall away, analysts are expecting profits to jump to £175m by 2023. That is up from £67m for 2019. 

With profit rising, the company should be able to afford to return lots of cash to investors. 

That being said, this is a highly competitive market. Plenty of firms are trying to edge in on TP Icap’s turf. As such, I cannot take its growth for granted. Higher costs and additional regulatory headwinds could also hit growth at the group. 

Despite these risks, I reckon this is one of the best dividend shares to buy today, and I would add it to my portfolio. 

Cash profits 

As well as TP Icap, I would also add homebuilder Bellway (LSE: BWY) to my portfolio. 

With a cash-rich balance sheet and a 4.6% dividend yield at the time of writing, the stock looks to me to be a great income play. 

However, in general, the UK homebuilding sector is facing growing headwinds. These include the fallout from the cladding scandal and rising costs. Both of these headwinds could hit Bellway’s growth and bottom line. And if costs rise substantially for the firm, it might have to reduce shareholder returns. 

That is something I will be keeping an eye on as we advance. Despite these challenges, I think the corporation has excellent prospects. Demand for new homes in the UK is only growing. Bellway is one of the largest builders in the sector, which means it has the capabilities to rise to meet this demand. 

With this tailwind behind the enterprise, I think the stock is one of the best dividend shares to buy now for income and growth. Even though the company might face challenges in the near term, over the next five to 10 years, I think the business can continue to build on recent earnings growth and strengthen its balance sheet. 

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Rupert Hargreaves 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.

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.

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