2 top dividend stocks I’d buy in March

Regular readers of my articles will know that I am a big fan of Britain’s housebuilders.

Those proclaiming that the gold-trimmed returns of yesteryear are now consigned to history cite factors like slowing home price growth and rising construction costs as reasons for share pickers to think twice before taking the leap.

I am not so concerned however, and have indeed put my money where my mouth is (I own shares in both Taylor Wimpey and Barratt Developments). The country’s yawning homes shortage is not going to go away any time soon. And in this environment, I can see the country’s listed builders continuing to dole out ripping returns for their shareholders.

Build a fortune

MJ Gleeson (LSE: GLE) is a share I have tipped for greatness several times before. And Monday’s sunny market update — a release that has sent its share price shooting 6% higher — has affirmed my positive assessment.

The Sheffield business, which specialises in providing affordable housing in the North of England, declared that sales at Gleeson Homes exploded 31.5% during the six months to December, to 593, while revenues at the division rose 34.7% higher to £73.7m. As a consequence, group pre-tax profit jumped 19.1% to £13.7m.

This bubbly outlook prompted Gleeson to hike the interim dividend to 9p per share from 6.5p in the same 2016 period.

Chief executive Dermot Gleeson lauded the “very encouraging start to the year” and struck a positive tone looking ahead, commenting: “Land remains available to us at sensible prices and demand for our homes amongst our customer base remains strong.”

Reflecting this supportive environment, City analysts expect the construction star to report earnings expansion of 9% and 10% in the years ending June 2018 and 2019 respectively. And so further meaty dividend growth is anticipated too.

A 25.9p per share payout is predicted for the current period, up from 24p in fiscal 2017 and yielding 3.5%. The excellent news does not end here as an estimated 28.3p dividend for next year nudges the yield to a tasty 3.9%.

I am confident that Gleeson has what it takes to remain a hot growth and income share for many years to come.

Looking good

Yields over at Superdry (LSE: SDRY) may not be impressive but, for those seeking exceptional dividend growth, I reckon it’s hard to look past the fashion star.

Supported by a predicted 14% earnings advance in the year to April 2018, City brokers are expecting the FTSE 250 fashion house to lift the dividend to 32.3p per share from 28p last time around, resulting in a handy-if-unspectacular 1.8% yield.

And in fiscal 2019 the dividend — assisted by an estimated 17% profits improvement — is likely to march to 38.2p, meaning an even-better 2.2% yield.

Superdry is throwing the kitchen sink at expanding its global store network, a programme that helped deliver a 12.8% improvement in Retail revenues during the 26 weeks to October, to £242.7m. The company now has 600 stores up and running across the world and, with the company now targeting the hot growth markets of the US and China, I expect sales to continue booming long into the future.

5 dividend shares to make your fortune

What’s more, with both Superdry and Gleeson dealing on dirt-cheap valuations - their forward PEG ratios ring in at just 1.3 and 1.5 respectively - I reckon they are too cheap to ignore right now.

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Royston Wild owns shares in Taylor Wimpey and Barratt Developments. The Motley Fool UK has recommended Superdry. 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.