2 cheap UK dividend shares I’d buy in November!

These dividend-paying UK shares both look undervalued by the market today. Here’s why I think they could be unmissable buys.

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I’m searching for the best UK value shares to buy this month. Here are two I’ll add to my Stocks & Shares ISA if I have spare cash to invest.

Shock price fall

The housing market is really starting to creak as interest rate rises accelerate. Today, Nationwide announced that house prices actually fell 0.9% month on month in October.

Last month’s drop was the first since the height of the Covid-19 crisis in summer 2020.

The London Stock Exchange’s listed housebuilders face significant turbulence in the short-to-medium term. And so do suppliers of key materials, like brickmaker Forterra (LSE: FORT).

Indeed, City analysts now expect this materials supplier to record zero earnings growth in 2023. This follows an anticipated 25% rise this year.

6.4% dividend yield

The near-term outlook is looking grimmer, then. But the long-term picture remains quite exciting in my opinion. And following recent share price falls I think Forterra shares look too cheap to miss.

Today, the brick manufacturer trades on a forward price-to-earnings (P/E) ratio of just 8.8 times. It also carries an enormous 6.2% dividend yield through to the end of 2023.

Investing for the future

Make no mistake: Britain faces a colossal shortage of homes. It reflects inadequate housing policy by successive governments. And when interest rates start to come down again (probably in the second half of 2023), demand for homes is likely to leap again.

This is why the government this week affirmed plans to build 300,000 new homes a year by the middle of this decade.

As a potential investor in Forterra I’m encouraged by the steps it’s taking to meet a possible demand boom, too. Refurbishment of its Wilnecote centre will increase capacity, boost its product range, and improve efficiency. Meanwhile its new Desford brick factory remains on schedule to be commissioned later this year.

Another top UK value share

Lookers (LSE: LOOK) is another top UK share offering brilliant all-round value this November.

The car retailer trades on a forward P/E ratio of 5.3 times. It also carries a decent 4% dividend yield for 2022, and an even-better 4.2% one for next year. And predicted dividends for the next two years are well covered by expected earnings.

Unfortunately, Lookers is expected to suffer some considerable discomfort in the near term. Earnings are expected to decline 27% and 19% in 2022 and 2023, respectively, due to supply chain issues and weak customer demand.

The EV revolution

However, given Lookers’ dirt-cheap valuation, allied with its recent ability to beat expectations, I think it’s a great value stock to buy. Just last month it hiked its full-year profit forecasts to at least £75m.

Besides, as a long-term investor I think it could be a great way to capitalise on soaring electric vehicle (EV) demand.

Britain is the second-largest market for non-petrol and diesel cars in Europe, according to Statista. And it thinks sales of EVs will soar at a compound annual growth rate of around 14.7% during the next five years. Lookers should be well placed to exploit this demand boom.

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 assessed. Consider taking independent financial advice.

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.

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