Just released: our 3 best dividend-focused stocks to buy now [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due to a combination of business performance and potentially attractive share valuation.

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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.

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The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

Premium content from Motley Fool Share Advisor UK

Our monthly Ice Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of income-focused Ice recommendations, to help Fools build out their portfolios.

“Best Buys Now” Pick #1:

B&M European Value Retail (LSE: BME)

  • Previous periods of economic strain have generally been positive for discount retailers and so far we see little reason to believe this latest period of rising inflation and shrinking disposable incomes will be any different. 
  • That bodes well for B&M, whose store count and customer awareness (particularly in areas outside its traditional Northern heartland) grew rapidly during the pandemic when competitors stores were shuttered. 
  • All three parts of the company — B&M UK, Heron Foods, and B&M France — are performing well with growing sales and high cash flow. While margins may be down from pandemic-boosted levels they’re still substantially higher than pre-pandemic, which shows the benefits of all that increased consumer awareness as footfall remains significantly up on prior levels. 
  • The company’s trailing 16.5p ordinary dividend equates to a hearty 3.4% yield at present. But add in the additional 20p per share special payout due in February and that yield jumps to 7.7%. Now, investors shouldn’t count on special dividends continuing to be an annual occurrence, but B&M’s board remains committed to returning excess cash to shareholders when it deems leverage has fallen too low.

“Best Buys Now” Pick #2:

Redacted

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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.

The Motley Fool UK has recommended B&M European Value Retail.  

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