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Have £2k to invest in the FTSE 250? Here are 2 dividend stocks I’d buy in August

Countryside Properties (LSE: CSP) is a FTSE 250 share that’s not had the best of things of late. Its share price fell to its cheapest for 2019 below 300p earlier this month, and while it’s recovered a little ground, it’s fair to say that it remains firmly in the ‘unloved’ category right now.

I reckon, though, that the business is an undervalued gem. Carrying a forward P/E ratio inside the bargain bin basement of 10 times or below (at 7.5 times), and boasting a brilliant corresponding dividend yield of 5%, on paper it certainly provides plenty of bang for your buck.

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And I reckon this low, low rating could prompt a flurry of buying in the weeks ahead. Indeed, there are many robust trading statements that I’m expecting from Britain’s homebuilders in August alone — Taylor Wimpey, Persimmon and Bellway are a few slated to update the market — and I believe this could cause a slew of positive energy to flow across the entire sector.

Escape to the country

Countryside has itself put in a rosy update of its own in recent days, one which has helped its share price climb off those aforementioned troughs. In it, the Essex business celebrated the “strong customer demand” which it keeps witnessing across all of its categories of homes and in spite of the prolonged uncertainty being brought about by Brexit.

So while completion numbers and average selling prices were broadly stable year-on-year in the three months to June, Countryside saw the net reservation rate rise 12% to 1 and its total order book swell 17% to £1.14bn. It’s no wonder that the business plans to turbocharge build rates from the current quarter.

What’s particularly rare about this housebuilder is the fact that, unlike most of its competitors, City analysts for the most part expect annual earnings to keep soaring in spite of the slowdown in the broader housing market.

Bottom-line rises of 10% and 11% are estimated for the years to September 2019 and 2020 respectively, figures which make Countryside’s dirt-cheap valuations all the more bewildering in my opinion. If you’re looking for a terrific dip buy paying big dividends, I reckon this is a stock worth a place in your portfolio.

Set to soar?

I would extend my bullishness to Meggitt (LSE: MGGT), not that this FTSE 250 share has experienced any share price woe of late. In fact, a recent spurt has taken it to record peaks just shy of 600p.

It’s worth considering the possibility of additional gains once the aerospace giant unveils interim results on August 6. Meggitt certainly impressed last time out in late April when it cheered “strong” trading in the first quarter. That was thanks to robust end markets and its programme of increasing content on new aircraft classes, with revenues rising across both defence and civil aviation segments.

Unsurprisingly, City analysts expect earnings growth to accelerate over the medium term, an anticipated 5% rise for 2019 giving way to a predicted 10% increase next year. And combined with its exceptional cash flows, Meggitt’s expected to keep its progressive dividend policy in tow, resulting in an inflation-mashing forward yield of 3%. I reckon this is another top FTSE 250 buy for next month.

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Royston Wild owns shares of Taylor Wimpey. The Motley Fool UK has recommended Meggitt. 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.

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