The stock market crash is throwing up some fantastic opportunities for long-term investors, in my opinion. I think it’s likely we’ll see further volatility in the near term. But I’m convinced that those buying today will be rewarded further down the line. With that in mind, here’s a look at two FTSE 250 dividend stocks I like the look of right now.
The first FTSE 250 stock I want to highlight is Computacenter (LSE: CCC). This is a leading provider of IT infrastructure services. Its share price has fallen from around 1,900p to just 1,050p over the last month, and I believe this drop has created a buying opportunity. The stock trades on a trailing P/E ratio of approximately 11 and sports a yield of around 3.5%.
I’ve always thought there’s a lot to like about Computacenter. For a start, it operates in a growth industry. In this digital age, businesses need to invest in technology such as the cloud, cybersecurity, data management, remote working capabilities and more. This is the only way to remain competitive. Secondly, it’s a highly profitable company. Over the last three years, return on capital employed (a key measure of profitability) has averaged 20.4%, which is excellent. Third, it has a strong balance sheet with minimal debt. And fourth, it’s a reliable dividend payer with a fantastic long-term dividend growth track record. The group recently hiked its FY2019 dividend by 22%. Overall, it appears to be a high-quality company.
Of course, the group is not going to be immune to the impact of the coronavirus. This adds near-term uncertainty. However, Covid-19 disruption could actually boost demand for some of the group’s services (such as video and voice communication, messaging services, and laptop sales), so I don’t think sales will fall off a cliff. All things considered, I believe the long-term risk/reward proposition is attractive right now.
Tritax Big Box
Another FTSE 250 dividend stock I like the look of at present is Tritax Big Box (LSE: BBOX). It’s a real estate investment company (REIT) that owns a large portfolio of modern, sophisticated storage warehouses (‘big boxes’) that are let out to retailers. Its share price has crashed from around 145p to just 105p over the last month. This has created an attractive entry point in my view, as the trailing P/E ratio has dropped to 16 and the yield on offer has spiked up to 6.5%.
While the coronavirus is likely to have an impact on UK economic growth in the near term, my belief is that BBOX should not be affected too badly. Not only are its warehouses occupied by high-quality tenants such as Amazon and Tesco, but they’re also let on long leases. This reduces the risk of vacancies.
It’s worth noting that in its full-year results last week, the group stressed the quality and longevity of its income stream and said: “We remain confident in our ability to continue to deliver secure and growing dividends to shareholders as part of an attractive total return over the medium term.” It also increased its 2020 dividend target by 2.2% to 7p per share.
Overall, I see considerable long-term investment appeal in BBOX. With the share price down sharply over the last month, I think it’s a good time to be building a position here.
It’s ugly out there…
The threat posed by the coronavirus outbreak has spooked global markets, sending stock prices reeling.
And with the Covid-19 virus now beginning to spread beyond of China and Italy, it seems very likely that the bull market we’ve enjoyed over the past decade could finally be coming to an end.
Against such a backdrop of market worry, it’s little wonder that many investors are starting to panic. (After all, nobody likes to see the value of their portfolio fall significantly in such a short space of time.)
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Edward Sheldon owns shares in Tritax Big Box REIT. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Tesco and Tritax Big Box REIT. 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.