These top dividend stocks all trade on rock-bottom earnings multiples. I think they are brilliant buys that I’m considering for 2021 and beyond:
#1: The golden goose
I think it’s always a good idea to own one or more gold-producing UK shares. Economic, social, and political crises can happen in a heartbeat, as the Covid-19 crisis has shown. And having exposure to the safe-haven metal can help save your bacon. It can also allow you to make massive returns.
Gold prices have rocketed 21% since the beginning of 2020. And gold-digging stocks like Polymetal International (LSE: POLY) have soared in price as a consequence. I prefer the idea of buying gold-producing UK shares to buying the metal itself or a gold-backed ETF. This way I can capitalise on a rising gold price and receive dividends.
Polymetal’s a particularly great buy on the dividend front. It carries an 8% yield for 2021. The FTSE 100 share’s also expected to enjoy a 20% annual earnings increase next year, leaving it trading on a price-to-earnings (P/E) ratio of just 8 times. Gold prices have retraced sharply in recent months. But I think huge macroeconomic uncertainty and ultra-loose central bank monetary policy could sweep them higher again soon.
#2: A UK share to build fortunes with
Many UK share investors will know the terrific investing opportunities that come from Britain’s severe housing crisis. It’s a problem that’s supercharged demand for newbuild homes and delivered exceptional shareholder returns from the housebuilders during the 2010s.
After a challenging, Covid-19-hit 2020, City analysts expect these construction firms to get back to generating vast profits straight away. Take FTSE 100 builder Persimmon for example. City analysts expect annual earnings here to rebound 10% in 2021. And this means that dividends look set to soar again too.
This leaves Persimmon carrying a monster 10% dividend yield for next year. Combined with its low P/E ratio of 10 makes this UK share too good to miss for this value investor.
#3: Logistics leviathan
Persimmon’s earnings projections are decent. But Urban Logistics REIT (LSE: SHED) looks on course to post stratospheric bottom-line growth for the next fiscal year. The number crunchers are expecting a 34% rise in annual earnings for the 12 months to March 2022. I reckon this is a taste of what UK share investors can expect throughout this new decade.
The e-commerce explosion of recent years has accelerated following the Covid-19 outbreak. It’s a phenomenon that should fuel profits and growth for Urban Logistics for many years into the future. It owns and operates warehousing and logistics facilities the length and breadth of the country.
And the FTSE 250 business is busily expanding to make the most of this opportunity. Last week it announced the £22.9m purchase of three logistics facilities in the Midlands and the South-East. Right now Urban Logistics trades on price-to-earnings growth (PEG) ratio of 0.6. It carries an enormous 6.5% corresponding dividend yield, too. This all represents unmissable value in my book.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.