Whenever I look for cheap FTSE dividend shares, I keep coming back to the same old favourites. That’s why I’ve decided this time to eliminate anything I already like, and search among the rest of the high flyers in the FTSE 100 and FTSE 250.
I’ve probably overlooked abrdn because of the name, which I find silly. But I think the investment management business is a great one. Who wouldn’t want to make money from other people’s money?
The dividend yielded 6.1% in 2021. And forecasts suggest 7.8% for the current year. The downside though, is that the 2021 payment was not covered by earnings. And we do face global investment disruption.
Still, abrdn is on my list of FTSE dividend shares for further investigation.
Inflation boost
Why I have overlooked Moneysupermarket.com for so long, I really don’t know. Inflation will surely make price comparison sites especially important in 2022 and beyond. But the share price has fallen 35% over the past 12 months.
That’s probably down to earnings dipping in the past couple of years. So there’s risk there. But the falling shares have pushed the forecast dividend up to 7%. Cover in 2021 was only thin, so that’s more risk.
Moneysupermarket faces strong competition too, but it is one of the best known brands.
Micro Focus International suffered during the pandemic. The management software specialist recorded a couple of years of earnings losses, and its share price declined. We’re looking at a 25% fall over the past 12 months.
Payouts were cut for 2019 and 2020, which is not good for dividend shares. But 2021 saw a rise after the company posted strong underlying EPS. Statutory EPS was still negative, and I might be taking a risk if I assume dividend growth is back.
But I intend to look more closely at this dividend share in May.
Trading and health
Spread betting platform provider IG Group has been paying consistent dividends. And in 2021, it yielded 5%. With the share price down 11% over 12 months, we’re looking at a potential yield of 5.4% this year.
Interest rates and economic hardship could draw people away from spread betting. It’s risky, and I sense a movement towards wealth preservation in the coming year.
Still, dividends have been well covered. IG is on my list of long-term FTSE dividend shares.
I have examined Primary Health Properties in the past, but it’s fallen below my radar recently. It’s a commercial Real Estate Investment Trust, so that’s bad during a pandemic when bricks and mortar business is hammered, right?
But it’s in the medical segment, investing in healthcare real estate in the UK and Ireland. And that surely has to be good.
Earnings have continued to grow. And dividends have kept pace, with a 4.1% yield last year. I see two main risks. One is a high P/E valuation of 24, and the other is thin cover by earnings.
Which dividend shares to buy?
Will I actually buy any of these FTSE dividend shares during May? I won’t have the money for all of them. But I intend to examine them all more closely.
