The Motley Fool

The 3 best dividend stocks of 2018 (so far)

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.

In a recent article I took a look at two of the worst-performing FTSE 100 dividend shares so far in 2018, and considered whether or not they’re worthy of investment right now.

This time around I’ve scoured the FTSE 100 and FTSE 250 for shares that have been making headlines for all the right reasons. Here is what I’ve found.

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...

Plastic fantastic

A stream of strong trading updates has allowed Victrex’s (LSE: VCT) share price to bulge in 2018, up 21% since the bells rang in New Year’s Day.

In its latest release in July, the FTSE 250 plastics manufacturer advised that group sales volumes in the nine months from last October were up 19% year-on-year, reflecting in part positive market conditions. Although sales are expected to cool in the fourth quarter Victrex remains positive that it can meet current projections.

Speaking of which, City analysts are forecasting a double-digit profits improvement in the 12 months to September, an estimate which supports predictions of a 124.9p per share dividend, up from 121.8p last year.

A prospective P/E ratio of 26.4 times might be toppy on paper. But a corresponding dividend yield of 3.9% helps to take the edge off. I wouldn’t be surprised to see Victrex maintain its momentum in the months ahead.

Paper champion

Smurfit Kappa (LSE: SKG) is another tasty dividend share that has flown in 2018, its share price expanding by 28% since the turn of January.

The paper packaging giant jumped in March when news emerged that International Paper was circling it. Smurfit Kappa may have fought off its US rival’s takeover bid, but its share price has remained stable, the FTSE 100 business helped by a slew of positive updates. Just last week it announced that operating profit before exceptionals jumped 48% during January-June.

Yields might be lagging those of Victrex, but the rate at which Smurfit has raised dividends in recent years — and is likely to continue doing so — makes it a genuinely great pick for income-chasers in my opinion.

In the immediate term, a payout of 94 cents is forecast, up from 87.6 cents last year and yielding 2.6%. This, allied with an undemanding forward P/E ratio of 14.2 times, makes the Irish firm a terrific buy today.

Poised to reverse?

BCA Marketplace’s (LSE: BCA) value has also swelled in the year to date, up 16% to be precise. But I am a lot less optimistic over the car auctioneers’s share price prospects going forwards than those of Smurfit Kappa’s.

The FTSE 250 company — most famous as the UK’s largest auction house as well as the owner of online vehicle buyer — has accelerated on the back of its resilience in a tough marketplace. It has also been the subject of takeover action in recent months, attracting the wistful glances of Apax Partners, although it has also been quick to bat away the interest.

I’m worried about the firm’s ability to keep earnings on an upward slant as the UK economy toils, even though City forecasts suggest further growth in the year to March 2019. The dividend is also expected to expand from 8.55p per share to 9.1p, resulting in a large 3.9% yield. In my opinion, though, a forward P/E ratio of 19.4 times doesn’t fully reflect the risks to earnings growth, in the current year and beyond. I would give the share a wide berth today.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Victrex. 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

Renowned stock-picker Mark Rogers and his 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 click below to discover how you can take advantage of this.