Indeed, the outlook for British stocks is strengthening follow a better-than-expected first quarter dividend. Excluding special dividends, shareholder payouts were basically stable year on year in the three months to March, at £13.6bn. That’s according to data from Computershare.

As a result, full-year underlying dividend growth is now tipped at 1.8% by Computershare, to £85.6bn. This is up from an estimate of 1% at the start of 2025.

A top UK dividend share

Of course it’s important to remember that dividends are never guaranteed. And as we’ve seen in the past, many UK shares could be set to slash, cancel, or postpone cash rewards if macroeconomic conditions worsen.

Yet there are still plenty of solid dividend shares to consider. Braemar Shipping Services (LSE:BMS) is one such stock I think demands a close look.

The annual dividend here is tipped to rise 6.3% in the current financial year (to February 2026). Based on Computershare’s predictions, this suggests cash rewards will rise far more sharply than the UK average.

As a consequence, the forward dividend yield on Braemar shares is a healthy 6.5%.

If broker forecasts are correct, a £20,000 lump sum invested in this dividend hero will provide £1,300 this year alone.

Robust forecasts

Braemar Shipping Services may not be for the faint of heart, though. Its markets are highly cyclical and face growing uncertainty as new trade tariffs come into effect. In March, the company cut revenues and profits forecasts for last year due to weak charter rates.

This has had a negative impact on the share price. But as broker projections show, it’s not expected to impact Braemar’s ability to keep paying large and growing dividends. I have to say that I’m not surprised.

This year’s predicted payout is covered 1.9 times by expected earnings, roughly in line with the widely regarded safety benchmark of 2 times. The shipbroker also has strong foundations, with net cash on the balance sheet at the start of the new financial year.

I’m also encouraged by Braemar’s strong forward order book, which reflects its diversified revenue streams and market-leading positions. The business recorded forward orders of $82.9m at the close of fiscal 2025.

This was up from $80.6m at the halfway point of last year.

Rough seas

Braemar is the second-largest shipbroker on the planet. And while it faces choppy waters in the near term, it still has significant long-term opportunities to exploit as the global economy steadily expands.

I also think it offers extremely attractive value following recent price weakness. As well as carrying that 6%-plus dividend yield, Braemar shares also trade on a rock-bottom price-to-earnings (P/E) ratio of 7.8 times.

On balance, I think it’s a top dividend share for risk-tolerant investors to consider.

The post Looking for UK dividend shares? £20k invested here could provide a £1,300 passive income in the next year! appeared first on The Motley Fool UK.

That said, sometimes a share purchase can be for cosmetic reasons. After all, it can look bad if the top managers don’t think the companies they run are worth an investment.

However, if the purchase of shares is big enough to ‘hurt’, maybe that’s proper skin in the game. So it’s worth looking at businesses with recent director share purchases.

Cyclical recovery and growth

Small-cap company Braemar (LSE: BMS) is a good example. On 23 May, chief executive James Gundy bought 6,600 shares at a price of 290.5p each, costing £19,173.

Maybe that’s small-fry compared with a typical chief executive’s annual pay packet. However, the purchase topped up his holding in Braemar to 778,765 shares.

The business provides “expert” investment, chartering and risk management advice to the shipping and energy markets. However, the multi-year financial and trading record shows volatility in earnings, cash flow and shareholder dividends.

That all suggests the presence of cyclical risks in the business and the sector. The share price chart tells a similar story:

Economic times have been challenging everywhere over the past few years. But I’m optimistic that we’ll see improvements ahead. Meanwhile, the stock’s been recovering from the 2020 lows it hit during the pandemic.

Can that recovery continue? Well, on 23 May, the company released its full-year results report for the period to 29 February. Revenue came in flat, but underlying earnings per share dropped by 21% year on year.

Nevertheless, the directors increased the shareholder dividend by 8% and issued an optimistic outlook statement.

Gundy described the performance of the business as “strong”, and pointed to the order book, which ended the year up 47% at just under $83m.

A positive outlook

The firm’s focusing on generating sustainable shareholder returns across the shipping cycle. Part of the plan has seen the business hire more brokers and make selective acquisitions in the fragmented shipbroking market. 

The overall growth strategy aims to build greater resilience into the enterprise. Meanwhile, operating margins are improving and the overall market outlook’s positive, Gundy said.

At 297p, the stock’s already just over 200% higher than its low point in 2020, and that fact emphasises the cyclical risks shareholders must be prepared to carry. We never know when the next general economic or geopolitical shock will occur. But it’s clear how far the share price could fall if things take a downturn.

Nevertheless, Gundy’s certainly eating his own cooking with his personal share purchases. I think that speaks volumes about the confidence he has in the immediate future of the business.

Meanwhile, the forward-looking earnings multiple for the current trading year is around eight, and the anticipated dividend yield is about 4.7%.

I think that valuation looks undemanding. Therefore, I’m digging in with further research and considering some of the shares for my diversified portfolio now.

The post Should I follow the chief executive into these UK shares right now? appeared first on The Motley Fool UK.

boohoo

What it does: boohoo owns a number of well-known fashion brands including Warehouse, Oasis, Debenhams and PrettyLittleThing.

By Andrew Mackie. Since buying shares in FTSE AIM stock boohoo (LSE: BOO) at the end of last year, I have seen their value collapse by 80% (at the time of writing). It is now the worst performing stock in my ISA portfolio.

When I made the investment, I did so with full awareness of the mass of issues it was facing. However, I believed most of them were temporary and would eventually be overcome. How wrong I was.

Supply chain issues over the past couple of years have had a direct impact on its unique selling point, namely the breakneck speed of getting its new designs to market.

Although this problem has been receding recently, continued stubbornly high inflation has altered consumer spending patterns. As a result, it finds itself between a rock and a hard place. If it raises prices too aggressively, cash-strapped millennials and Gen Z, which represents its core buyer, will look elsewhere.

Despite the fast fashion industry coming under closer public scrutiny, I do not see the threat as existential. Many agree with me. Mike Ashley, the owner of Frasers Group, recently bought a 5% stake in the company.

Through its large social media presence, it has demonstrated its ability to lead the fashion ecommerce market. It also continues to invest heavily in expanding its distribution centre capacity both in the UK and US.

All in all, I am not willing to throw the towel in on boohoo just yet.

Andrew Mackie owns shares in boohoo.

Braemar  

What it does: Braemar offers advisory services in shipbroking, chartering and risk management.  

By Harshil Patel. I bought shares in Braemar (LSE:BMS) last year after it delivered a jump in annual profits. At the time, sales had jumped by 21% and pre-tax profits soared by 66% from the previous year.  

The FTSE stock expressed favourable market conditions as the reason for its strong results. The outlook was also encouraging, where limited capacity at many shipyards had created an opportunity for the business.  

A few months later, Braemar reported further encouraging progress. It also doubled its interim dividend and expressed a positive outlook looking ahead. 

Despite these positive updates, Braemar’s share price failed to move higher. After several months, my stop-loss was hit, and I sold the shares at a loss.  

Just a few days later, Braemar’s stock fell a further 20% after it delayed publishing its full-year report and requested that its shares be suspended due to an investigation.  

So, yes, I regret buying Braemar shares, but I certainly don’t regret selling them when I did. 

Harshil Patel does not own shares in Braemar. 

Lloyds Bank

What it does: Lloyds Bank is a British retail and commercial bank with branches across England and Wales.

By John Fieldsend. The FTSE 100 stock I most regret buying this year is Lloyds Bank (LSE: LLOY). I opened a position a few months back at an average cost price of 49p. The share price is now 42p. I’m looking at a paper loss of 14%. 

At the time, it looked like a no-brainer buy. Interest rates were going to increase revenues and the dividends looked better than they had for years. A £200m share buyback was the icing on the cake. It seemed like a stock with very little downside. 

I don’t think much has changed, so I’m hoping things will turn around soon. Although with Lloyds being the country’s biggest mortgage lender and interest rates set to stay high, I won’t be holding my breath.

That said, it’s not all bad. I have a forward dividend yield of over 6% to look forward to and forecasts are set to keep rising. Such is the advantage of investing in dividend stocks. 

John Fieldsend owns shares in Lloyds.

The post “This is the one FTSE stock I regret buying in the last year” appeared first on The Motley Fool UK.

What on earth’s going on here? And could this be a long-term buying opportunity?

What we know

Braemar has announced that its auditors are continuing to investigate a $3m transaction from 2013 that involved payments being made up until 2017.

This means that it will miss the 30 June deadline set by the Financial Conduct Authority (FCA) for the publication of its audited full-year results. In order to comply with the regulations, Braemar has requested that trading of its shares be suspended from 3 July.

In a statement, the firm said: “The board is not presently comfortable with the manner in which the transaction has been historically represented and the remaining liability recorded in the company’s balance sheet.”

It added that FRP Advisory Group, an independent specialist advisor, will help with the probe, along with an investigation committee led by Braemar’s non-executive chairman.

The statement also reconfirmed its expectation of reporting full-year record revenue (of at least £150m) and record underlying operating profits (at least £20m). The board also recommended a final dividend of 8p per share, which would bring the total payout to 12p, a 33% increase over the previous year.

What now?

After the company’s shares are suspended, investors will no longer be able to buy and sell the stock. But management says it expects to request a restoration of its shares upon publication of its full-year results. We don’t know how long that will take.

Two other London-listed firms — data specialist WANdisco and retailer Revolution Beauty — have also had their shares suspended in recent times. However, as things stand, this doesn’t seem comparable to these other two cases.

Revolution Beauty was already posting big losses before its shares were suspended in September. Meanwhile, the FCA’s probe into WANdisco is for an alleged “material misstatement” (around $115m in bookings) of its financial standings.

According to Braemar though, this is an ongoing investigation into a single historical transaction. And as mentioned, it has hiked the dividend by more than a third, which signals confidence in its financial position.

Therefore, it doesn’t appear that the business is in danger or about to disappear completely from the public market. Still, it’s clearly a worrying turn of events for shareholders.

Is the stock a buy?

Braemar listed on the London Stock Exchange in 1997. As things stand, this share price drop would represent its biggest one-day loss in over 23 years.

Yet the company remains a prominent international player in the shipping sector. So this big drop could represent a timely long-term buying opportunity.

Nevertheless, given the uncertainty, I’m going to keep the stock on my watchlist for now. I’ll wait for the dust to settle and re-assess the investment case, as and when I can.

In the meantime, there are many other opportunities out there for my portfolio.

The post Why penny share Braemar plunged 17% today appeared first on The Motley Fool UK.

Here are three such dividend-paying penny stocks that I’m planning to buy in the weeks ahead. While their dividends aren’t guaranteed, I’m reassured by how well-covered each prospective payout appears.

Riding the wave of global trade

Near the top of my buy list right now is leading international shipbroker Braemar (LSE: BMS).

A shipbroker acts as a specialist intermediary between shipowners and charterers that need to transport cargo. And Braemar operates across all time zones and major shipping hubs, including Shanghai, Singapore, Mumbai, and Sao Paulo.

As well as chartering though, the firm provides expert advice in investment and risk management. So its offerings are well diversified, making its income less cyclical.

In a trading update back in March, the company announced it had achieved record revenue and profitability for the financial year ended 28 February. The shipbroker expects underlying profit of at least £20m from revenue of £150m.  

That would put the stock on a bargain price-to-earnings (P/E) multiple of about six. The shares offer a dividend yield of 4.1%. The payout is healthily covered three times by anticipated earnings.

One risk worth considering is that the shipping sector will need decarbonising, which will cost billions. But Braemar also runs a carbon offsetting brokerage service, so looks very well positioned.

Solid foundations

Another penny stock offering solid income prospects is Billington Holdings (LSE: BILN). This is one of the UK’s leading structural steelwork specialists.

The company has successfully targeted higher-growth areas to supply steel to. These range from movie studios (such as Shepperton Studios) to data centres, e-commerce warehouses, and renewable energy projects.

Now, obviously there is weakness in the construction industry at the moment. But management just announced that current trading remains in line with market expectations.

As a result, brokers are still anticipating a 30% jump in sales to reach £115m this year. Meanwhile, profits are pegged to rise to £8m, underpinning a dividend per share of 20p (from 15.5p last year).

Importantly, this payout is expected to be covered 2.5 times by earnings. This is in line with the responsible dividend coverage the firm has provided in recent years.

The forward dividend yield stands at 5%.

The pawn industry

Finally, I’m highlighting Ramsdens Holdings (LSE: RFX). This is a North Yorkshire-based pawnbroker with a significant foreign currency exchange operation.

The company has 158 stores across the UK (excluding two franchised stores) and plans to open another six in the second half of this year. It also has a growing online presence.

In its interim results for the six months to 31 March, gross revenue increased by 33% year on year, reaching £39m. Meanwhile, profit before tax soared by 68% to £3.7m.

Given this strong performance, the interim dividend was boosted 22% to 3.3p per share. The stock yields 3.5% and the payout is covered 2.3 times by historic earnings. The forward P/E of 11 seems great value.

A looming recession could threaten the growth of the jewellery selling side. But due to the unfortunate cost-of-living crisis, I see overall business remaining robust.

The post 3 penny stocks paying rising passive income! appeared first on The Motley Fool UK.

Braemar Shipping Services

What it does: Provides chartering, risk management, and investment advice to the shipping industry.

Commercial transport stocks like Braemar Shipping Services (LSE: BMS) face huge uncertainty as the global economy cools. In days gone by, falling trade and lower demand for their services would play havoc with their shipping rates.

This is still a threat as inflation worsens and key economic indicators slump. But due to a supply imbalance in the shipping market I’m confident businesses like this will remain solid investments.

Weak shipbuilding activity over the past decade has created a dearth of available vessels. And due to labour shortages shipyards can’t get enough boats out to meet demand.

Healthy dividend growth

So while shipping rates are trending lower of late, business conditions remain extremely favourable for the likes of Braemar. Indeed, City analysts expect annual earnings to rise 24% in the year to February 2023.

It’s a forecast that leaves Braemar trading on a rock-bottom price-to-earnings growth (PEG) ratio of 0.5. Investing theory says that a reading below 1 share is undervalued.

It also means analysts predict healthy dividend growth. An expected 7p per share dividend for financial 2022 is predicted to rise to 8.5p this year. Consequently the shipping giant carries a 3.3% dividend yield.

Finally, this year’s expected dividend payment is covered 2.7 times by anticipated earnings. Any reading above two times provides a good level of protection for investors.

So Braemar should be in a strong position to make this year’s dividend forecast even if the shipping rates worsen.

Ibstock

What it does: Manufactures a wide range of standard and specialised bricks and cladding.

Britain will need to turbocharge housebuilding over the next decade to meet the needs of a growing population. So I expect brickmaker Ibstock (LSE: IBST) to witness booming long-term demand. It’s why I’ve invested in this FTSE 250 stock myself.

The fact that house prices continue surging despite the worsening economy illustrates how depleted the UK’s housing stock is. Latest Halifax data in fact showed average home prices rising at their fastest pace for 14 years. And it’s why City analysts think Ibstock’s earnings will rise 22% year on year in 2022.

A high dividend stock

Unfortunately supply chain problems in the construction industry are prompting some housebuilders (like Persimmon) to reduce their production targets. If this problem persists it could have a significant knock-on effect for Ibstock’s sales.

Still, in my opinion, this is reflected in the company’s low price. Like Braemar, Ibstock shares trade on a PEG ratio of just 0.5.

I also like this dividend share because of its solid dividend yields. A predicted 8.9p per share dividend for 2022 yields a meaty 5%. That’s up from 7.5p last year.

And what’s more, Ibstock’s dividend cover sits around the safety benchmark of two times.

The post 2 dirt-cheap dividend stocks to buy in August! appeared first on The Motley Fool UK.

A cyber security star

Tech stocks that help companies, governments and other organisations protect themselves against cybercrime look set to thrive this decade. The growth of homeworking and the e-commerce boom due to Covid-19 has supercharged the number of cyber attacks over the past couple of years.

The tense geopolitical landscape threatens to worsen the situation further with state-sponsored cyber attacks becoming the norm.

Comments from the National Cyber Security Centre (NCSC) illustrate the scale of the problem. The centre has just urged UK organisations “to bolster their cyber security resilience in response to the malicious cyber incidents in and around Ukraine”.

The NCSC says that recent cyber attacks in Ukraine “are similar to a pattern of Russian behaviour seen before in previous situations,” prompting this fresh warning.

As both large- and small-scale cyber attacks become commonplace, increased investment is required in software to repel intrusions. This is why I’m considering investing in NCC Group (LSE: NCC).

This UK share provides a wide range of services that help thwart cyber criminals. From carrying out security assessments and providing training to producing software escrow agreements, NCC has its fingers in a number of pies.

City analysts think NCC’s earnings will rise 25% in the financial year to May. This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of 0.7. A reading below 1 suggests that stock could be undervalued.

Sure, NCC could suffer untold reputational damage if a failure of its security systems occurs. Given the nature of its business such an event could prove catastrophic for future sales. However, NCC has been around for three decades and so clearly has a great track record on this front. This gives me extra confidence as a potential investor.

A cheap stock for the shipping boom

I’m also considering buying shares in Braemar Shipping Services (LSE: BMS) today. The world’s shortage of vessels is sending charter rates through the roof and shipbroking firms like this are reaping the rewards. Braemar also provides financial and logistics services to the global shipping industry.

Shipping rates are ballooning because of a tightening supply of vessels. The Covid-19 economic rebound is supercharging demand for ships of all classes. At the same time, a shortage of orders for new vessels in recent years has left a paucity of available seaborne craft.

Some analysts are predicting that “the average cost of shipping this year will be higher than ever before” as the crunch goes on. Braemar plans to double the size of its shipbroking business to exploit these favourable conditions.

City brokers are expecting earnings at Braemar to shoot 22% higher in this financial year (to February). This leaves the shipping giant trading on a forward PEG ratio of 0.5.

Earnings at the business could suffer if the economic recovery runs out of steam. But from a long-term perspective, I think this cheap stock remains a top buy.

The post 2 cheap stocks to buy right now! appeared first on The Motley Fool UK.

But in volatile conditions like these, I reckon it’s a good time to focus on buying the shares of good businesses. And if I hold my selections for a long time, short-term market fluctuations become less important.

Why I think these are UK shares to buy

Right now, for example, I’m keen on geotechnical and groundworks contractor Keller (LSE: KLR). The company issued a positive outlook statement in May. And the business has been recovering well from the challenges of the pandemic.

City analysts expect earnings to rebound higher by around 27% in 2022. And with the share price near 847p, the forward-looking price-to-earnings ratio is just below 10. I think that looks like good value. And on top of that, shareholders will likely collect a dividend for the 2022 trading year, yielding just over 4.5% measured against today’s share-price level.

Meanwhile, the growth strategy is rolling out at pace. And on 14 July, Keller announced the bolt-on acquisition of a geotechnical company called RECON Services in America. The directors said the purchase will help Keller become “the preferred international geotechnical specialist contractor.”

Overall, in a world that looks set to focus on infrastructure development as it ‘builds back better’, I think Keller looks well-placed. However I could, of course, be wrong. And if further general economic weakness causes earnings to slip, I could easily lose money on the shares. Nevertheless, I’d embrace the risks now and add the stock to my long-term diversified portfolio.

But I’d also play the long-term recovery and growth theme with Braemar Shipping Services (LSE: BMS). The company is an international shipbroker and also provides advice in shipping investment, chartering, risk management and logistics services.

Riding the gathering recovery

I’m bullish on the long-term potential for world economies to recover and prosper in the years ahead. And I reckon businesses providing shipping services will likely do well if commercial activity increases. 

And in the full-year results report released on 3 June, chief executive James Grundy appeared optimistic as well. He said the business exceeded the directors’ expectations for financial performance in the trading year to February. And there was progress in realigning the business to a new, “growth-oriented” shipbroking strategy.

Grundy thinks Braemar is in a good position to capitalise on ongoing global recovery. And he said the outlook “for the next few years” is positive. Meanwhile, City analysts expect earnings to make some impressive double-digit percentage advances in the current trading year and in the following year to February 2023.

Looking for higher earnings ahead

With the share price near 288p, the forward-looking earnings multiple is just below 11. I don’t think that’s an outrageous valuation. But I wouldn’t expect the price-to-earnings number to move much higher. After all, shipbroking remains a cyclical pursuit. And there’s potential for earnings and the share price to fall in the years ahead… as well as the possibility they could move higher.

I reckon the success of an investment in Braemar Shipping Services now relies on ongoing progress with earnings. And that seems likely, to me. So I’d embrace the risks and buy the stock now.

The post The best UK shares to buy in this whipsaw market appeared first on The Motley Fool UK.

Rupert Hargreaves: Braemar Shipping Services 

Braemar Shipping Services (LSE: BMS) is an international shipbroker and shipping services provider. Its exposure to seaborne trade suggests the company is highly leveraged to the global economic recovery. Indeed, analysts reckon group earnings per share will increase 40% this fiscal year. 

Based on these projections, the stock looks cheap trading at a forward price-to-earnings (P/E) multiple of 12.8. 

The company’s valuation and growth potential are the reasons why I’d buy Braemar as a recovery stock in July. 

That said, if the economic recovery fails to live up to expectations, Braemar may be one of the first to suffer. As such, this investment has quite a high level of risk. 

Rupert Hargreaves does not own shares in Braemar Shipping Services.

Edward Sheldon: Keystone Law

My top small-cap stock is Keystone Law (LSE: KEYS). It’s an innovative, platform-based law firm that’s disrupting the UK legal industry. Last year, it won ‘Law Firm of the Year’ at The Lawyer Awards.  

Keystone has generated strong revenue and profit growth in recent years and I expect it to continue doing so in the years ahead. In the short term, the company should benefit as the UK reopens and economic activity picks up. In the long run, the expansion of its platform should drive top- and bottom-line growth higher.

One thing to be aware of is that the stock’s valuation is quite high. This adds risk to the investment case. Overall, however, I think the risk/reward proposition here is attractive.

Edward Sheldon owns shares in Keystone Law

Harshil Patel: Cake Box Holdings 

Cake Box Holdings (LSE:CBOX) is a specialist retailer of fresh cream cakes. It’s a franchise business and delivers most of its growth by opening new stores.  

So it’s encouraging to see a strong pipeline of new locations. It currently has 157 franchised stores and another 18-24 are expected this year. It’s also trialing several kiosks with a national supermarket. 

At some point, locations could become saturated and an optimum number of stores will be reached. That said, there’s currently plenty of eligible franchise applicants and potential locations to keep Cake Box growing.  

Overall, Cake Box is a quality company led by entrepreneurial management. I like that it offers double-digit earnings growth and strong margins. Its balance sheet looks strong and even offers a well-covered dividend. 

Harshil Patel owns shares in Cake Box Holdings.

Tom Rodgers: SCS

With home refurbishment markets booming, sofa manufacturer SCS Group (LSE:SCS) is my top small-cap stock for July 2021. The £116m market cap firm has produced operating profit growth of 30.6% in the last 12 months as sales and profits surge post-lockdown. Dividends are expected to return in force, as high as 12p per share for 2022, offering substantial future income even after a 40% rise in the share price in the year to date. A forward P/E of 11 times earnings is cheap and I see more upside for July and beyond.

Tom has no position in SCS at time of writing.

G A Chester: B.P. Marsh & Partners 

Founded in 1990, and still founder-led, B.P. Marsh & Partners (LSE: BPM) is a specialist private equity investor in early stage financial services businesses. There’s higher risk with fledgling businesses, but the company has an impressive long-term record of growing its net asset value (NAV). It reported another year of growth last month, with NAV up £13m to £150m. 

The stock is currently priced with a market capitalisation around £120m. In other words, at a 20% discount to NAV. Given the company’s track record of delivering strong shareholder returns (including dividends), and the growth prospects of its investee businesses, I think there’s exceptional value on offer here. 

G A Chester has no position in B.P. Marsh & Partners.

Zaven Boyrazian: Bioventix 

Bioventix (LSE:BVXP) is a biotech company that manufactures specialised antibodies for blood testing. It’s a niche product. But remains an essential ingredient for diagnosing almost every type of disease – including Covid-19.

The firm generates revenue from direct sales to in-vitro diagnostic companies and royalties from any product developed using its propriety material. The latter has yet to evolve into a substantial source of income. But it does provide the facility for a recurring revenue stream in the future.

Bioventix operates in a highly regulated industry. This undoubtedly adds some operational risks. Suppose the firm or any of its royalty-generating customers fail to comply with regulations. In that case, its reputation and income could be compromised. But personally, I think the potential reward is worth the risk.

Zaven Boyrazian does not own shares in Bioventix.

Roland Head: Vertu Motors

Car dealership group Vertu Motors (LSE: VTU) is one of the UK’s largest motor retailers, with brands including Bristol Street Motors. Vertu says that demand for used cars is “exceptional” at the moment. The latest update from the company revealed strong trading and triggered an upgrade to profit forecasts.

The main risk flagged by the company is that the global chip shortage will cause delays to new car deliveries. However, Vertu’s share price is covered by the value of the group’s property portfolio, and the business currently trades on just seven times forecast earnings. Brokers are also forecasting a useful 3.6% dividend yield this year.

In my view, Vertu looks like a good, cheap, small-cap stock. I recently added the shares to my portfolio.

Roland Head owns shares of Vertu Motors.

Paul Summers: SDI Group

Having multi-bagged over the last year, shares in shares in scientific product maker SDI Group (LSE: SCI) look expensive. However, I suspect they could eventually be worth a lot more thanks to an acquisition-focused growth strategy similar to that of FTSE 100 top stock Halma.

There could even be more upside in July. The company stated in May that it would exceed previous estimates on FY21 revenue and adjusted pre-tax profit (given in February). I wonder if trading since then, combined with the lifting of restrictions, will lead management to also upgrade its FY22 guidance later this month.

Paul Summers has no position in SDI Group or Halma.

Christopher Ruane: M&C Saatchi

Things have been looking up for the previously troubled advertising small-cap stock M&C Saatchi (LSE: SAA).

The shares are up 156% already over the past year. For a company whose survival was in question at one point, that is impressive. But I see further possible gains ahead. The advertising market generally is buoyant. M&C Saatchi is poised to benefit from that. The company recently lifted its forecast for the year.

The company’s reputation remains tarnished, though, which could act as a dampener on growth.

Christopher Ruane does not own shares in M&C Saatchi.

Royston Wild: Begbies Traynor 

The British government’s furlough schemes have helped keep a lid on insolvency rates during the pandemic. But with these financial support programmes set to end, I think now could be a good time to invest in Begbies Traynor Group (LSE: BEG). 

Indeed, buying this UK share before full-year results are released on Tuesday 20 July could be a very good idea. Despite a depressed insolvency market Begbies Traynor said in May that full-year revenues would grow ahead of market expectations following a strong fourth-quarter performance. News that trading has remained robust in the new financial period (to April 2022) could help lift the small cap again following recent share price weakness.

At current prices Begbies Traynor trades on a rock-bottom forward price-to-earnings (PEG) ratio of 0.4. This provides plenty of scope for a fresh move higher.

Royston Wild does not own shares in Begbies Traynor. 

The post Top small-cap stocks for July appeared first on The Motley Fool UK.

I’d buy UK shares like these

Because of that view, I’m keen on UK shares such as Braemar Shipping Services (LSE: BMS). The company is restructuring and refocusing its business, reducing debt and preparing for growth ahead.

However, with the market capitalisation near £77m, this is a tiny company. And shareholders will be exposed to all the normal risks associated with smaller enterprises. On top of that, Braemar operates in a cyclical sector and the stock is exposed to the effects of the ups and downs in the wider economy.

But today’s full-year results report contains a number of positives. Chief executive James Gundy said the business exceeded the directors’ expectations for financial performance in the period. And the firm made progress in re-focusing operations towards its “growth-oriented” shipbroking strategy.

Part of the effort involves simplification of the business model. And I reckon that’s almost always a good thing. The company has also made progress reducing its borrowings to “manageable levels” and improved its management structure. Gundy thinks Braemar is now well-placed to benefit from the global recovery that’s underway.

A positive multi-year outlook

If the general economic recovery from the pandemic continues, shipping markets will likely improve. And the company is seeing “strong” trading now at the beginning of its new trading year. The directors underlined their confidence in the outlook by reinstating shareholder dividends and declaring a payment of 5p per share.  

Gundy nailed his colours to the mast and said: “The outlook for Braemar for the next few years is positive.”And City analysts expect a mid-single-digit percentage increase in earnings for the current trading year to March 2022. Meanwhile, with the share price near 248p, the forward-looking earnings multiple is around 11.

Braemar scores well against quality indicators. The return on capital is running near 15% and the operating margin close to 10%. I also think I’m seeing decent value given the improving nature of the business and the tailwind from the world economy. For me, the stock is a decent ‘buy’ for a multi-year cyclical recovery and growth trade. I’d aim to buy some of the shares and hold for around a decade.

Risks and opportunities

However I could, of course, be wrong in my judgement. The biggest risk, as I see it, is that economies turn down again and I could end up with a losing investment.

But Braemar isn’t the only UK share I’m keen on right now. For example, FTSE 250 branded food producer Premier Foods is also in the middle of a refocusing and restructuring programme. The firm is reducing its borrowings and rebuilding itself for sustainable growth ahead. I think it operates in an attractive, defensive sector and has every chance of growing its business in the years ahead.

But if earnings growth fails to materialise, the shares could fall in value from the current level near 105p. Nevertheless, I’d embrace the risks and add the stock to my long-term diversified portfolio.

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