2 dividend shares on my radar in September

Interest rates are sending prices higher, but Stephen Wright thinks there are still opportunities for dividend investors looking for shares to buy.

| More on:

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.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

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.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Stock prices in the UK and the US might have gone up in August. But for investors who know where to look, I think there are still some dividend shares trading at very attractive prices.

Diageo

The Diageo (LSE:DGE) share price has climbed 10% from its 52-week lows. But investors who think the opportunity to buy the stock has passed must have short memories. 

Created with Highcharts 11.4.3Diageo Plc PriceZoom1M3M6MYTD1Y5Y10YALL31 Aug 201931 Aug 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

The chance to buy Diageo shares at £25 must have seemed unrealistic a year ago when the stock was trading at £33. Yet here we are.

Should you invest £1,000 in Diageo right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo made the list?

See the 6 stocks

Challenges in various regions have caused sales to fall for the first time since 2020. But the company’s key advantages – the strength of its brands and the scale of its distribution – are still very much intact.

A dominant position in the US, for example, has been an issue recently as weak consumer spending has weighed on volumes. Over the long term though, I think it could well be an advantage.

Alcohol in the US is distributed by wholesalers rather than directly to retailers. This leads to higher margins for producers like Diageo, which helps with profitability.

Macroeconomic weaknesses and foreign currency fluctuations are a genuine risk for a business with Diageo’s reach. But with the stock still some way from its highs, it’s still on my buying list.

Albemarle

Lithium prices have crashed over the last couple of years, taking mining stocks with it. As a result, Albemarle (NYSE:ALB) shares trade at their lowest level since October 2020.

Created with Highcharts 11.4.3Albemarle PriceZoom1M3M6MYTD1Y5Y10YALL31 Aug 201931 Aug 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '242020202020212021202220222023202320242024www.fool.co.uk

The company’s key competitive advantage – the quality of its assets, which allow it to produce lithium at a lower cost than its competitors – is still intact though. At least, it is for the time being. 

Albemarle’s Chilean operations have the lowest costs of any lithium mine in the world. However, the government’s expressed an intention to own a majority stake in such projects in future.

If this happens, the company could be forced to trade partial ownership of its key asset for the right to renew its lease. That would be very bad for shareholders.

Albemarle’s lease has just under 20 years left to run though, so this might be a problem for the future. Until then, the business should benefit from growing demand driven by the rise of electric vehicles.

Despite the volatile lithium price, the company’s a dividend aristocrat. And I think right now could be an opportunity to buy a great business for the long term at a discounted price.

Stocks to buy

Diageo and Albemarle are very different businesses. But they have a couple of things in common that make them stand out as attractive stocks to consider buying in September. 

The first is they both have durable advantages that are impossible for competitors to replicate. This makes them attractive for the long term. 

The second is that both are trading at unusually low prices. That’s why I think there might be a good opportunity in September for my Stocks and Shares ISA.

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

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.

Stephen Wright has positions in Diageo Plc. The Motley Fool UK has recommended Diageo 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.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Investing Articles

£20K invested in Tesla stock last April is now worth…

Despite all the bad headlines lately, Tesla stock has put in a storming performance over a 12-month timeframe. Is this…

Read more »

Investing Articles

If a 40 year old invests £600 a month in a SIPP, here’s what they could have by retirement

With no retirement savings at 40, an investor could put £600 a month into a SIPP and grow its value…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Why hasn’t its 9.9% yield boosted the Phoenix share price?

Phoenix Group has a dividend close to double digits, but saw a weak share price performance in recent years. Christopher…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

With average 10% yields, these mid-cap FTSE shares could supercharge a passive income portfolio

Some of the best passive income gems can be found on the UK's smaller indexes like the FTSE 250 and…

Read more »

A coin being dropped into a piggy bank
Investing Articles

As the Barclays share price tanks 19% in 2 days, is this a great buying opportunity?

As a trade war sends the Barclays share price into a tailspin, Andrew Mackie steps back to look at the…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Is Fundsmith Equity still a good choice for a Stocks and Shares ISA in 2025?

Many Britons hold the Fundsmith Equity fund in their Stocks and Shares ISAs. Is this still a good move? Edward…

Read more »

Investing Articles

Nvidia stock is down 24% this year. Time to buy the dip?

Christopher Ruane has been eyeing Nvidia stock as a potential addition to his portfolio for a while. Is a recent…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Down 25% since January, this resilient dividend stock’s catching my eye

Maintaining the UK’s rail, water, and energy infrastructure isn’t the most exciting business. But it has made this a solid…

Read more »