The following shares all carry forward dividend yields around (and above) the 8% marker. And I’m backing them to keep forking out generous dividends long into the future.
The 9%+ yielder
PayPoint (LSE: PAY) is a share whose exceptional profits and dividend picture seems to be undervalued by the market right now.
The 1% earnings decline forecast for the 12 months to March 2019 means that it changes hands on a cheap forward P/E multiple of 14.9 times. This reflects the fact that buoyant investor demand for the share has fallen back over the past three months, a strange phenomenon since latest trading details released in this period outlined the brilliant adoption rates for its bright new technologies.
Now PayPoint isn’t only a great selection for value chasers, with City brokers also expecting the business to keep throwing out special dividends as well on account of its rock-solid balance sheet. Indeed, last year’s total 82.5p per share payment is anticipated to march to 84.6p in the present period. And this leaves the FTSE 250 firm boasting a jaw-dropping 9.1% yield.
The drinks ace
While the pressure on consumer spending power remains immense at the present time, Marston’s (LSE: MARS) continues to resist the worst of this environment and revenues continue to rise. Total sales rose 5.2% in the 42 weeks to July 21, reflecting solid organic sales at the firm as well as the fruits of its ongoing expansion programme.
I’m hugely impressed by its resilience in the face of a tough trading environment, and it’s this — allied with steps to expand its pub estate — that convinces me dividends should remain on the favourable side of ‘generous’ for some time to come.
The number crunchers agree with me, and they are forecasting dividends of 7.6p per share for the year to September 2019, up from 7.5p last year and yielding an exceptional 7.7%. And they are expecting Marston’s to flip from an anticipated 2% earnings decline this year with a 4% rise in fiscal 2020.
Right now the firm sports a forward P/E ratio of 7.1 times. This should make it an irresistible pick for long-term value investors, in my opinion.
The Footsie giant
City analysts may be expecting Vodafone (LSE: VOD) to endure a little earnings trouble in the near term, but thanks to the brilliant progress it is making in emerging markets the telecoms titan’s profits picture over a longer time horizon looks pretty robust.
This is reflected in broker predictions that the FTSE 100 firm will bounce from an 11% profits reversal in the year to March 2019 with a 15% rise next year. It also means that dividends are expected to keep skipping higher through this period, with last year’s reward of 15.07 euro cents per share predicted to jump to 15.15 cents in the current year.
Some recent trading troubles have caused Vodafone’s share price to drop almost 30% since the start of 2018, leaving the business dealing on an historically-low forward P/E ratio of 18.1 times. This, along with its giant dividend yields of 8.1% for fiscal 2020, makes it a very attractive share to snap up today.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of PayPoint. 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.