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2 high-yield dividend stocks I’d buy right now

International bus and rail operator Stagecoach Group (LSE: SGC) has seen its share price struggle over the last couple of years falling from highs of 420p in 2015 to current levels around 210p. With the shares now changing hands at close to five-year lows, could it be the right time for brave contrarians to go against the herd and pick up this leading transport business on the cheap?

Low fuel prices

By its own admission, the Perth-based business continues to suffer from weaker revenue growth in comparison to the stronger growth it has delivered over the last 10 years or so. Both in the UK and North America, growth in the bus and rail sectors has been affected by sustained low fuel prices, resulting in heightened competition from cars and airlines.

Like many large businesses, Stagecoach sees itself facing challenges as a result of the current uncertain political and economic environment, but remains upbeat about the long-term prospects for public transport. Indeed, the company sees a large market opportunity for a shift from cars to public transport against a backdrop of population growth, urbanisation, technological advancements, and increasing pressure to tackle road congestion and improve air quality.

Enviable record

The long-term outlook might be promising, but short-term challenges remain, with Stagecoach reporting a slightly disappointing set of first-half results at the end of 2016. The group’s operating profit fell 19% to £117m, with pre-tax profits coming in 17% lower than the first six months of FY 2016 at £100.4m.

Current forecasts for the company’s full-year figures don’t fare much better (pun intended), with analysts expecting the group to post a 12% dip in underlying earnings for the year to the end of April, with a further decline of 10% pencilled-in for next year. Based on this gloomy near-term outlook I think the company’s low P/E rating of nine is perhaps justified.

Despite the lack of growth in the short term, I still think the shares are worth buying for their progressive dividends. In fact, Stagecoach has the enviable record of increasing its annual payout for 15 successive years. What’s more, with the interim dividend recently hiked by 8.6% to 3.80p per share, the full-year payout is now forecast at 12.08p, giving a healthy 5.6% yield for FY 2017, rising to 6% by FY 2019. But you’ll have to hurry, the shares go ex-dividend on Thursday 9 February.

Splashing the cash

Meanwhile, another FTSE 250 firm that’s never been afraid to splash the cash when it comes to shareholder payouts is LondonMetric Property (LSE: LMP). Operating as a Real Estate Investment Trust (REIT), the mid-cap property firm is continuing with its strategy to sell-down mature retail parks with a sharpened focus on the distribution sector that offers higher growth opportunities.

LondonMetric’s dividends are forecast to increase by 0.25p per share to 7.5p for the current year to the end of March, giving a chunky prospective yield of 5.1%, rising to 5.5% by fiscal 2019. Income seekers tuck in.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Stagecoach. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.