The Motley Fool

Will these 5% yielders make or break your shares portfolio?

At first glance C&C Group (LSE: CCR) may appear a tasty selection for those seeking brilliant dividend yields.

The brewing giant has consistently lifted dividends even in times of sustained earnings weakness (C&C has endured three bottom-line reverses on the spin), and the City does not expect either trend to cease just yet.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

A 6% profits drop is forecast for the year ending February 2018, worsening from last year’s 3% decline. But despite this, a total dividend of 15.5 euro cents per share is anticipated, improving from 14.33 cents previously and yielding a very chunky 5.3%.

And supported by an anticipated 5% bounceback in fiscal 2019 the firm is expected to lift the dividend again to 16.1 cents, shoving the yield to a formidable 5.5%.

C&C’s half-year market update on Thursday certainly suggested that payouts should continue swelling. In it the Dublin-based business announced it was lifting the interim payout by 5% year-on-year to 5.21 cents.

Too much risk

Still, in my opinion, today’s trading statement had a lot more for investors to worry about rather than news to encourage fresh bouts of buying.

The company — whose products include Bulmers and Magners cider and Tennents lager — saw net revenues slip 6.8% during the six months to August, to €273.1m, a result that pushed operating profit 4.9% lower to €50.5m.

C&C noted that “volatile market conditions remain across the industry,” and that while its UK businesses have made a “solid” start to the second half of the year, “in Ireland, where the cider category remains highly competitive, trading has been marginally slower than expected.” The firm has also been negatively impacted by currency movements, it advised.

C&C’s sustained share price weakness (the brewer has lost more than 25% of its market value in the course of 2017) reflects this increasingly-difficult trading environment. And while the business is doubling-down on brand investment to stimulate sales and cost-cutting to shore up the bottom line, I reckon the drinks giant is a risk too far right now.

I would give C&C a wide berth despite its undemanding forward P/E ratio of 13.1 times.

Dividend yields set to balloon

Those on the hunt for darling dividend stocks would be much better taking a look at eSure Group (LSE: ESUR), in my opinion.

Unlike C&C, the car insurer and its peers are enjoying a steady improvement in market conditions as motor premiums continue their relentless northwards march.

Indeed, price comparison website said earlier in October that policy costs had rocketed 14% over the past year, and that even worse is likely to come for Britain’s drivers — motorist editor Amanda Stretton commented: “There is every possibility that car insurance prices will be the most expensive on record during the first half of next year.”

It is hardly a shock, therefore, that eSure is tipped by City analysts to flip from an anticipated 5% earnings decline in 2017 to report a 13% improvement in 2018.

And this is expected to push dividends northwards again then, from a reduced 12.5p per share in the current period to 14.4p. These projections yield a very-decent 4.6% and 5.2% respectively.

I am convinced eSure should prove a brilliant bet for growth and income investors now and in the future.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.