As we prepare to wrap up November, most UK investors are wondering how shares will fare after the election of 12 December. Although picking stocks under the short-term cloud of a general election may be unnerving, it is important to bear in mind that most of us are investing for the long term.
If you want to find plenty of British companies with growing profits, then the FTSE 250, the UK’s mid-cap stock index, is potentially a good place to look. Today I’d like to share three names that may be of interest to our readers, regardless of who eventually gets the keys to Number 10.
Britvic (LSE: BVIC) is a leading producer of branded soft drinks. You are probably familiar with its products, including Robinsons, Tango, and J2O. The group also holds the exclusive rights to make and market Pepsico‘s global brands in the UK.
Year-to-date, the share price is up over 21%. Analysts credit this success in part to management’s ability to innovate and offer different products for various groups of consumers, such as 18-24-year-olds, the under-35s, and the over-50s.
In addition to its UK operations, through franchising, export sales and licensing, management has been increasing its reach overseas, including sizeable operations in Ireland, France and Brazil.
When the group released its Q3 trading statement, management said that it was “confident of achieving market expectations for the full year”.
Its current dividend yield is just shy of 3% and the next ex-dividend date is expected in early December.
It is no secret that the fortunes of the UK retail sector ebbs and flows and many analysts are still cautious about buying many retailer shares. However, Dunelm Group (LSE: DNLM) is one stock I am happy to take a closer look at.
Since the opening of the first Dunelm store in 1991, the company has expanded operations and is now a major player. According to its annual report released in October, the group is the “market leader in the UK homewares market with 8.7% share“. Most of its stores are superstores based in out-of-town locations.
Also, about one-fifth of its sales come online from different websites, including www.dunelm.com, www.worldstores.co.uk, www.kiddicare.com, and www.achica.com.
Year-to-date, the share price is up over 60%. In addition to growing profits, the dividend yield of 3.4% makes the group a worthwhile pick for risk-averse income investors who know that they can compound their returns through reinvesting dividends.
Many of our readers would have either noticed the yellow logo or possibly used the services of PayPoint (LSE: PAY) at their local convenience stores or supermarkets.
Its core business, over-the-counter utility bill payments, is a steady earner. Its aggressive rollout of the updated PayPoint One terminals has gone better than expected and these are now operating in over 13,920 convenience retailers.
Its most recent trading update showed that UK bill payments net revenue was up by 7.5%. And its parcel delivery and collection service, Collect+, is profitable. UK parcel volumes increased by 11.9% to 5.6m.
Year-to-date, the share price is up 18%+. The dividend yield is almost 4.2% and PayPoint also has a policy of paying out special dividends.
And the firm isn’t only exposed to the UK market. It has similar operations in Romania. After Brexit, this small but profitable base could be an important gateway to the EU and further contribute to the bottom line.
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tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic. 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.