In a recent article I scanned the FTSE 100 for brilliant dividend stocks that could provide you with an income for the rest of your life.
Indeed, such is the size of dividend yields over at one of these shares, Persimmon, that I reckon investors could use the housebuilder to help them to pack in the day job.
My quest for other potentially game-changing income shares has uncovered Assura (LSE: AGR), a FTSE 250 share that has lifted dividends by more than 80% during the past five years, and whose forward yields smash the main market average of 3.9% by some distance.
City analysts expect the total dividend to move to 2.6p per share in the year to March 2019 from 2.455p a year earlier, a prediction that creates a juicy 4.8% yield. The dial edges to 5.2% for fiscal 2020 thanks to predictions of a 2.8p payout too.
In great health
The number crunchers are really quite bullish over Assura’s profits picture — rises of 10% and 7% are predicted for this year and next alone — and it’s not surprising as Britain’s ageing population requires the NHS to keep investing heavily in its facilities.
The company, which invests and develops primary care properties in the UK such as GP practices, also remains busy on the M&A trail to drive business. It had 525 medical centres on its books with a total annualised rent roll of £92.3m as of the close of the second fiscal quarter, and the launch of a £300m bond in July gives it further firepower to execute its growth strategy (its pipeline already stood at a chunky £225m as of June).
Now Assura doesn’t come cheap, the firm sporting a forward P/E ratio of 19.7 times, which sits outside the widely-regarded value territory of 15 times and below. Whilst I reckon its leading position in this particular defensive medical market warrants a ‘lively’ premium, investors on the hunt for classic value may be more interested by RPC Group (LSE: RPC) which carries a prospective earnings multiple of 9.2 times.
Although concerns over the way the company funds acquisitions has weighed on its share price more recently, I believe that these fears are now baked into the plastics packager’s rock bottom valuation. The FTSE 250 play has pruned its operations and divested non-essential divisions to boost its balance sheet to help it continue on its M&A-led growth path in recent times too.
Moreover, whilst fears over plastics regulations from the EU have also put a dampener on investor appetite in 2018, RPC’s drive to develop its products with customers in line with modern environmental concerns should still provide the scope for it to keep winning plenty of business.
Dividends have risen for 25 consecutive years over at RPC, culminating in a reward of 28p per share for the year ended March 2018. It’s no surprise that expectations of further profit growth (of 5% this year and 7% next year) lead the City to anticipate extra significant payout growth as well.
A 30.2p reward is anticipated for the current fiscal year, meaning a chunky yield of 4.3%. And in fiscal 2020 the dial moves to 4.7% thanks to the predicted 32.5p dividend. RPC remains a stock to buy today and hold for years, in my opinion.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended RPC Group. 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.