I believe the huge investment Connect Group (LSE: CNCT) is making in fast-growing areas like parcel freight makes the distributor a great long-term bet for dividend investors.
Even though earnings are expected to take a rare dip in the year to August 2017 — a 7% fall is currently forecasted — Connect Group is still anticipated to hike the dividend to 9.8p per share, up from 9.5p last year and yielding a monster 6.9%.
The sale of Connect Group’s Education & Care division for £56.5m earlier this month is likely to help offset the effect of any near-term earnings trouble and keep the dividend growing.
And the bottom line is expected to get moving again from next year with a 5% rise, supporting a further predicted dividend lift to 10.2p. This creates a 7.1% yield.
Dividend investors can also put faith in these projections thanks to payout coverage roughly in line with the widely-regarded benchmark of 2 times. This rings in at 1.9 times to the close of fiscal 2018.
A robust construction sector in Europe, and signs of recovering market conditions in the US, makes door-and-window-parts-maker Tyman (LSE: TYMN) a terrific pick for those seeking sterling shareholder returns, in my opinion.
While the business retains a cautious outlook thanks to broader economic pressures, Tyman remains confident that the impact of acquisitions like windows giant Giesse — along with the benefits of stringent cost reductions — should help it ride out any storm.
Indeed, City brokers expect these factors to drive earnings 15% higher in 2017 and 9% higher next year.
Consequently an anticipated dividend of 9.4p per share for 2016 to advance to 10.6p this year, and again to 11.6p in 2018. These forward projections yield a market-mashing 3.7% and 4% respectively.
And estimated dividends are covered a robust 2.3 times by forecasted earnings during this period.
Recruit a stock star
Soothing claims in some quarters that the recruitment market is on the verge of a chronic cooldown, SThree (LSE: STHR) released a blockbuster set of financials in January.
Adjusted pre-tax profit hit the top end of expectations, at £40.8m, SThree advised, vindicating the firm’s strategy of concentrating on the Contract end of the market and underlining the progress that its Engineering and Information & Communications Technology divisions are making.
SThree is expected to keep earnings on an upward tilt by punching a 2% advance in the year to November 2017. This is expected to push keep the dividend constant at 14p per share, a figure that yields a mighty 4.3%.
And the shareholder reward is anticipated to swell to 14.1p in fiscal 2018 as the bottom line takes off. A14% earnings rise is currently expected by the Square Mile.
While dividend coverage may fall under the security threshold for this period, at 1.5 times and 1.8 times for 2017 and 2018 respectively, I reckon SThree’s steadily-improving cash flows should assuage fears of these projections being missed.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.