Top British dividend stocks for April 2022

We asked our freelance writers to share the top dividend stocks they’d buy in April, which included preference shares and housebuilding firms.

| More on:
One pound coin

Image source: Getty Images.

We asked our freelance writers to share the top dividend stocks they’d buy in April. Here’s what they chose:

Royston Wild: Redrow

A steady flow of positive data continues to stream in from Britain’s housing sector. Last week, for example, news emerged that average home prices in the UK rose at their fastest pace for 17 years in March.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

The ultra-low valuations of London’s quoted housebuilders seem at odds with the industry’s resilience, however. The past provides no guarantee that homes demand will remain strong as interest rates rise. Yet I think this risk is more than baked into the share prices of most housebuilding shares.

I believe that FTSE 250-quoted Redrow (LSE:RDW) is one of these brilliant bargain dividend stocks. Today the business — which in February upgraded its medium-term profit guidance — trades on a forward P/E ratio of just 5.6 times. It also carries a large 6% yield at recent prices.

Royston Wild does not own shares in Redrow.

Stephen Wright: BP 8% Cumulative 1st Preference

I’m taking a slightly different theme with my top British dividend stock for April. The BP 8% Cumulative 1st Preference (LSE:BP.A) shares are catching my eye. Preferred shares work slightly differently to common stocks, but Warren Buffett is a big fan. And I think that this one might be a winner.

The shares pay a fixed dividend of 8p/share. Importantly, the company has to pay dividends to its preferred shareholders in full before it can pay dividends to its common stock holders. For an income-seeking investor, I think that the added protection of preferred dividends might be welcome.

Stephen Wright does not own shares in BP Cumulative 1st Preference 8%.

Roland Head: Synthomer

FTSE 250 chemicals group Synthomer (LSE: SYNT) has caught my eye recently. I believe it could be an attractive dividend investment at current levels.

Synthomer benefited from a boom in demand for latex gloves during the pandemic, but it’s now returning to a more sustainable and diverse mix of product sales.

Although I can see some risk relating to management changes and the integration of a recent acquisition, I believe the fundamentals look strong.

Synthomer offers a forecast dividend yield of 5.5% for 2022. I believe it should deliver steady growth over the medium term.

Roland Head does not own shares in Synthomer.

Paul Summers: Taylor Wimpey

My top dividend stock for April is Taylor Wimpey (LSE: TW). Right now, the housebuilder is down to return 7.5% in cash in FY22. That makes it one of the highest-yielding stocks in the FTSE 100.

Sure, the potential for a wobble in the currently booming UK housing market can’t be ignored. With a valuation of just seven times forecast earnings, however, I’d say the market has already priced this in. The income stream is also likely to be covered nearly twice by expected profit. Staying diversified is vital but I’d be happy to buy today.

Paul Summers has no position in Taylor Wimpey.

Andrew Mackie: BP

My standout dividend stock for April is BP (LSE: BP). Although its yield of 4.3% is certainly not the most generous, this figure masks the true extent of the returns earmarked for shareholders.

Buybacks of $4.15bn have already been announced from surplus cash flow in 2021. In addition, the company has committed to return 60% of annual cash flow through buybacks. It estimates that if oil averages $80, that will equate to $7bn. Although the forced sale of Rosneft will likely impact that figure.

It also has the capacity to grow the dividend by 4% a year, at an average oil price of $60. Today, oil is over $100 and I expect it to remain elevated for some time to come.

Andrew Mackie owns shares in BP.

Harshil Patel: Imperial Brands 

My top dividend stock for April is Imperial Brands (LSE:IMB). This well-established consumer brand offers a juicy dividend yield of over 8%. That beats the average FTSE 100 yield of 3.5%.  

It also has an impressive track record when it comes to dividends, having consistently paid income to shareholders for over 25 years.   

Imperial is in the early stages of a multi-year transformation plan. There are always risks involved when it comes to business transformations. That said, it can afford some room for error as this dividend stock trades on a price-to-earnings ratio of just 6x. That looks super cheap to me.  

Harshil Patel does not own shares in Imperial Tobacco.  

Alan Oscroft: Direct Line Insurance Group

Direct Line Insurance Group (LSE:DLG) is my April pick amongst income shares. The insurance sector might be risky as we face soaring inflation and a possible recession. But I find Direct Line’s forecast 8.2% yield tempting.

My concern is that the dividend is likely to be only just covered by earnings. But there does seem to be cash around to pay it. In March, the insurer announced a share buyback worth up to £100m, in order to reduce its share capital.

That has an additional benefit in that it should help boost earnings per share and support future dividends.

Alan Oscroft has no position in Direct Line Insurance Group.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

The Motley Fool UK has recommended Imperial Brands, Redrow, and Synthomer. 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

A person holding onto a fan of twenty pound notes
Investing Articles

3 top dividend shares to beat a new recession

I believe that good dividend shares are my best approach to keeping my money safe in a recession. Here are…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 80%, this growth stock is a ‘no-brainer’ buy

Growth stocks have faced a torrid time recently. However, after falling 80% since its highs, this FinTech looks too cheap…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Warren Buffett is pouring money into stocks! Here’s a FTSE 100 pick I think he’d buy

Warren Buffett has been investing in several US stocks recently. Here's a FTSE 100 stock I think he'd also be…

Read more »

A Rolls-Royce employee works on an engine
Investing Articles

Is the Rolls-Royce share price on the verge of recovery?

A recent trading update showed the company is benefiting from increased flying hours, so will the Rolls-Royce share price soon…

Read more »

Girl showing thumb up, excited about upcoming shopping
Investing Articles

Is now a good time to buy Tesco shares?

After a strong rally last year, the Tesco share price has stalled. Roland Head gives his view on investing in…

Read more »

The BT Tower looming above London's skyline
Investing Articles

3 reasons to buy – and not buy – BT Group shares

The BT Group share price has a rock-bottom valuation right now. Is this a red flag or does it make…

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

2 cheap FTSE 100 dividend shares! Should I buy?

These two FTSE 100 dividend shares offer terrific value for money, on paper. Should I load up on them today,…

Read more »

Cheerful young businesspeople with laptop working in office
Investing Articles

5 steps to target a monthly £300 passive income

With his eyes on a target of monthly passive income, here are five steps our writer would take to try…

Read more »