Dividend shares in the FTSE 100 and FTSE 250 have been getting plenty of attention, and some share prices have been gaining.
Bank stocks are more popular now, though HSBC Holdings (LSE: HSBA) seems to be getting a bit less love.
The HSBC share price has gained in 2024. But the forecast dividend yield is still up at 7.3%, and analysts expect it to keep going.
Should you invest £1,000 in Persimmon right now?
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If we compare that with the 5% yield on the cards at Lloyds Banking Group, the 5.2% down for NatWest Group, or with Barclays‘ 3.7%, I think HSBC starts to look too cheap. A dividend can never be guaranteed, mind.
The discrepancy is probably down to the directions of the risk between HSBC and the others. While UK-focused banks appear to be heading into better economic times, fears are growing for the Chinese economy.
But in the long term, I expect Asian economies to grow strongly. And at today’s low forward price-to-earnings (P/E) ratio of under seven, I think the short-term risk is worth taking.
HSBC itself seems to think so too, as it’s been buying back its own shares.
Emerging markets
My second pick is also based on my long-term take on Asian economies, as well as other emerging markets.
It’s Ashmore (LSE: ASHM), the asset management firm that focuses on, well, emerging markets. That’s something that people have been pulling away from in recent years.
If folks are worried about their home economies, then how much scarier must the unknowns of far-away places be?
The Ashmore share price is down 60% in the past five years, and that all seems to be due to clients taking their money out.
The company put its assets under management at $49.5bn at 30 June 2024. As recently as just two years prior, that figure was up at $64bn.
Ashmore’s actual performance, though, looks fine to me. At interim time at December 2023, the firm reported “balance sheet strength with approximately £800 million of capital resources including £542 million of cash“.
And it maintained its dividend, with a big yield of 9.7% forecast for the year.
I expect short-term volatility, and the share price could dip further. But I think Ashmore has to be worth considering for long-term investors.
Cash cow
I’ve had my eye on advertising and PR giant WPP (LSE: WPP) of late too. The weak share price puts the stock on a forward P/E of only around 10 and dropping.
WPP has been out of favour since the old days of Sir Martin Sorrell came to an end.
And then, pandemic, inflation, interest rates… all had a big impact on spending in the marketing and corporate communications business.
It might take a while yet for business to get back to previous levels. And with budgets likely to remain tight, that while could be a long one.
But for me, the predicted 5.5% dividend yield makes this an attractive stock to consider buying now. It would be one to treat with patience, in it for the long run and the recovery that I hope is coming.
But the dividend income could be a nice sweetener while we wait.
