Looking to load up on terrific dividend stocks on a shoestring? Well, in a recent article I analysed two cheap, terrific income shares from the FTSE 100 that could make you a fortune by the time you come to retire.
But there’s plenty of beautiful big-yielders outside Britain’s premier share index that you should seriously consider today. These are just a couple of them…
I’ve made no secret of my belief that the UK’s shocking housing shortage is here to stay.
Indeed, the uncertainty facing the domestic economy is the worst that it has been for many years and yet homebuyer demand, helped by historically-low interest rates, the government’s Help to Buy purchasing scheme, and growing competition in the mortgage market, continues to outpace supply.
Springfield Properties (LSE: SPR) underlined this favourable backdrop when it released fresh trading commentary last month. In it the AIM-quoted business advised that “[we] made significant sales and profit progress in the first half of 2017/18, with the momentum being maintained through the second half of the year.”
Profit before tax is likely to rise 43% in the 12 months ended May, it advised, in line with the forecast upgrades made in February. Continuing the recent run of upgrades, however, Springfield added that revenues are likely to have shot 27% higher, above earlier expectations and thanks to accelerated completion of the sites it bought from Redrow around the turn of the decade.
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Clearly, Springfield is a company still on the up and this is reflected in City forecasts which are suggestive of earnings rises of 51% and 16% in fiscal 2019 and 2020, respectively.
And these give rise to predictions of impressive dividend growth during this period. Last year’s anticipated payout of 3.7p per share is expected to rise to 5.2p in the present period and to 6.1p next year, figures that create giant yields of 4.5% and 5.1%.
And as I say, the outlook for the Scottish developer is extremely bright beyond the medium term, helped by its desire to keep building its land bank through selective M&A and organic investment. In late July, it snapped up 400 acres of zoned land in West Lothian, one of the fastest-growing residential housing markets in the country, to order to create a 1,900-home site there.
Right now, Springfield can be picked up a dirt-cheap forward P/E ratio of 8.4 times.
The other income stock I’m looking at is Communisis (LSE: CMS), which also carries a valuation under the accepted bargain benchmark of 10 times and below, on this occasion, a prospective P/E multiple of 8.5 times.
What’s more, although earnings are expected to flatline in 2018, the marketing giant’s strong balance sheet still means it is expected to grow the dividend to 2.8p per share, from 2.66p last year. And this results in a chunky 5.2% yield.
Furthermore, next year a 10% annual earnings improvement is forecast at the small-cap, giving support to a predicted 2019 dividend of 2.9p. Thus the yield marches to an even-better 5.4%.
It’s easy to see why brokers are so optimistic. Business continues to roll in from all over the world, driving revenues at Communisis 9% higher during January-June, a period which also saw it ink a major contract with Zurich Insurance Group, among others. And by expanding its global presence, Communisis is set to keep adding to its esteemed client list.
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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.