2 dirt-cheap dividend stocks I’d love to buy this September!

I’m building a list of dividend stocks to buy when I next have spare cash to invest. I expect these two shares to deliver juicy passive income for years.

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These top dividend stocks trade extremely cheaply following recent share price weakness. Here is why I think they’re top buys right now.

Greencoat UK Wind

Buying some classic defence stocks like electricity generators could be a good idea as the UK economy wilts. Power demand tends to remain stable even during downturns, providing such shares with exceptional earnings visibility that few others have today.

This quality is critical for consistent growth. And as a long-term investor, I have Greencoat UK Wind (LSE:UKW) on my radar. This is because demand for renewable energy is poised to soar as the world switches away from fossil fuels.

The growth outlook for this FTSE 250 share — which operates more than 40 onshore and offshore wind farms across Britain — looks set to get a lot better, too, as planning rules are relaxed. On Tuesday, communities secretary Michael Gove announced that local communities can now apply for onshore turbines to be built.

Electricity generation from wind farms can be highly unpredictable. And during calm periods profits at firms like Greencoat UK Wind can suffer.

But I still believe the renewable energy stock is a top buy, and especially at current prices. Today it trades on a forward price-to-earnings (P/E) ratio of 8.8 times. And its corresponding dividend yield comes it at a chunky 6.3%.


Real estate investment trusts (or REITs) are another attractive option for dividend seekers, in my opinion. As they often tie tenants down to long contracts, rental income tends to stream in even if economic conditions steadily worsen.

I already own REITs Primary Health Properties, The Renewables Infrastructure Group, Tritax Big Box, and Target Healthcare REIT. Shares like this have all slumped in value as interest rates have risen, pushing up their borrowing costs and hitting their property valuations.

And while more pressure could come as interest rates rise, I’m still considering buying residential landlord The PRS REIT (LSE:PRSR) for my UK shares portfolio. Like those other investment trusts I own, this property stock can still be relied on to deliver market-beating income in the short-to-medium term.

Today it carries a mighty 5.6% dividend yield for this financial year (ending June 2024). This also reflects the fact REITs must distribute at least 90% of annual rental profits out in the form of dividends.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

This is a dividend stock that, like Greencoat UK Wind, I’d look to hold for the long haul. Rents are soaring thanks to a chronic shortage of available residential homes. And the problem is predicted to drag on as housebuilding activity weakens and buy-to-let investors exit the sector.

PRS REIT’s latest financials showed annual rental growth of 7.5% across its portfolio of family homes between April and June. This was up from 5.7% and 5.1% in its third and fourth fiscal quarters respectively.

At current prices, the company trades on a forward P/E ratio of just 16 times. I think this represents excellent value given its defensive characters and long-term growth prospects.

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 positions in Primary Health Properties Plc, Renewables Infrastructure Group, Target Healthcare REIT Plc, and Tritax Big Box REIT Plc. The Motley Fool UK has recommended Greencoat Uk Wind Plc, Primary Health Properties Plc, and Tritax Big Box REIT Plc. 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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