Here are three that City analysts expect to be trading at least 41% above their current share prices by this time next year. And while such forecasts and individual dividends can’t be relied upon, these stocks do offer decent passive income potential.

4imprint

4imprint (LSE:FOUR) is a direct marketer of promotional products, helping businesses and organisations put their logo on items like T-shirts, pens, mugs, and water bottles. 

While a niche market, 4imprint is a leader in North America, which helped drive strong growth for years. However, the FTSE 250 firm has recently been hit by slowing orders due to macroeconomic challenges and tariff uncertainty.

Revenue and pre-tax profit both fell 2% last year, to $1.35bn and $151m respectively. And management has warned that margins may take a slight hit in 2026, sending the stock down nearly 10% year to date.

However, this is still a very well-run company, with a highly cash-generative business model. It ended 2025 with cash and bank deposits of $132.8m, while maintaining the dividend at the same level as 2024.

Currently, the stock offers a 5.16% dividend yield and is trading 41% below an average broker price target of 4,930p. It’s currently out of favour due to macroeconomic uncertainty, but it could snap back sharply if and when conditions improve.

Keystone Law

Keystone Law (LSE:KEYS) is a tech-enabled law firm that uses a platform model rather than a traditional partnership structure. It allows lawyers to work for themselves, and last year added 61 new senior lawyers, taking the group’s total number of fee earners to 654. 

In February, the £160m company issued a trading update for the fiscal year ending 31 January. It expects to report revenue of roughly £109m, up 11% year on year, and adjusted pre-tax profits of £14.4m (up 20%).

The biggest risk I see here is a sudden downturn in the UK economy, which remains fragile and badly exposed to a spike in global energy prices. This could see lawyer billings drop.

Longer term though, I’m bullish on Keystone Law, as it operates quite a disruptive model in the legal industry and is attracting top talent. The stock currently sports a forecast dividend yield of 4.6%, while trading 79% below analysts’ price target of 906p.

Ramsdens

Finally, Ramsdens (LSE:RFX) is a £117m high street retailer offering foreign currency exchange and pawnbroking services. The share price has performed very strongly, surging 71% higher over the past year.

This is due to the rocketing gold price, which is encouraging more people to cash in their jewellery. Elevated precious metal prices are expected to help drive pre-tax profits nearly 30% higher to £21m in the year to 30 September 2026.

Of course, it’s worth pointing out that the share price has recently been responding to the gold price, so a fall in the yellow metal is a risk. However, Ramsdens plans to open between eight and 12 new stores this year, so it’s very much in growth mode right now.

The forward yield here is 4.4%, with a 550p share price target (52% higher).

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Here are two AIM-listed shares that I think are set up to do well over the next few years.

Ramsdens

First up, we have Ramsdens (LSE:RFX). The £113m-cap company does pawnbroking, foreign currency exchange, and the buying and selling of jewellery both online and through 169 high street branches.  

Ramsdens’ precious metals segment has been on fire lately due to the surging gold price. In the 12 months to 30 September, gross profit increased 50% year on year as its weight of gold purchased jumped roughly 15%. 

Elsewhere, the pawnbroking loan book grew 8% to £11.5m, as last year’s launch of a new dedicated pawnbroking website attracted new customers. For the full year, management expects pre-tax profit to be slightly ahead of market expectations for £15.4m (up at least 35%).

Looking ahead, Ramsdens is bullish on its prospects and expects to open between eight and 12 new stores per year. This expansion adds risk, of course, as there’s no guarantee that the new locations will do well. After all, the British high street is in long-term decline, and the firm recently chose to merge two of its central Glasgow stores.

However, Ramsdens is supplementing its physical presence with a growing online operation. Moreover, gold is tipped to continue rising as central banks buy record amounts of the metal to diversify away from the US dollar and geopolitical risk. So I think the firm is well-placed to carry on growing and increasing its profits.

The stock is up 76% in the past year. Yet the valuation doesn’t look stretched, with the forward price-to-earnings (P/E) ratio of just 9.8. There’s also a handy 4.1% forecast dividend yield on offer.

Whilst we have benefited from the sustained high gold price within our purchase of precious metals segment, we’ve also continued to make good progress across our other income streams. In particular, our continued success in jewellery retail highlights a growing awareness of our value for money proposition.

Ramsdens CEO Peter Kenyon

SpaceX-fuelled growth

The second stock is Filtronic (LSE:FTC). This £287m company designs and manufactures specialist products for the aerospace, defence, space, and telecoms infrastructure markets.

The stock is up nearly 800% over the past two years, and shareholders can thank Elon Musk’s rocket and satellite firm SpaceX. That’s because Filtronic has a lucrative deal in place to supply components for the space exploration giant’s Starlink satellite constellation. In August, it signed a record $62.5m (£47m) deal with SpaceX.

However, the share price has recently paused for breath after its massive rally. In fact, it’s down 24% since June, putting the stock on a more reasonable forward P/E ratio of 36 (for FY27, which starts in June).

That multiple might come across as high, and there’s admittedly a lot of customer concentration risk here. SpaceX accounted for 83% of FY25 revenue.

Taking a five-year view, however, I’m bullish on the firm’s prospects. Not only is it likely to pick up further supply contracts for SpaceX’s growing Starlink constellation, but I think Filtronic should have attractive opportunities in defence as Europe rushes to build up its military capabilities.

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This morning, the company gave a pre-close trading update for the year ended 30 September 2025 (FY25). It said its profit before tax is now expected to be “slightly ahead” of analysts’ expectations of £15.4m.

All that glitters…

One of the drivers of this improved financial performance is a higher gold price. As well as buying and selling jewellery, it also offers short-term loans secured against valuable items. It sells foreign currency too, although this is a small part of its business.

Today, gold has broken through the $4,000-barrier for the first time. Since the start of January, the spot price has risen 53% following a 27% increase in 2024. During the second half of FY25, Ramsdens has seen the gross profit on its precious metals business increase by more than 50% compared to the same period in FY24. In terms of weight, an additional 15% has been purchased.

The ethical dimension

When I first came across this company, I had my concerns. Understandably, pawnbroking gets a bad press. That’s probably why the group often describes itself as a “diversified financial services provider and retailer”.

Is the company taking advantage of people on low incomes with no savings to fall back on?

Or by taking the business away from dimly-lit back alleys and on to the ‘respectable’ high street — its loan business is also regulated by the Financial Conduct Authority — is it helping the most vulnerable avoid the temptation to turn to loan sharks and the world of illegal money-lending?

On balance, I think it’s the latter. I believe the mainstream banking sector fails people on lower incomes so at least Ramsdens means they have somewhere to turn to when experiencing a financial emergency. The group’s average loan value is currently £347.

Pros and cons

Like all businesses, this one has to deal with a number of potential problems. For example, loan defaults are an ever-present risk. The group also operates 169 high street stores with all the associated challenges. From FY26, it has plans to open eight-to-12 new ones each year.

It’s also relatively small. This means it doesn’t have the financial muscle to cope with a prolonged economic downturn. In addition, the price of gold can be volatile so the boost to this year’s earnings could be a temporary phenomenon.

However, it has a strong track record of growth with earnings per share rising by an average of 7.3% over the past five financial years. And based on amounts paid over the past 12 months, the stock’s yielding a reasonable 3.4% (no guarantees, of course).

Many economists believe the present economic uncertainty (caused by stubborn inflation, increased government debt and fears of an artificial intelligence bubble) could push the gold price higher. If their predictions prove to be right, it’s likely to tempt more people to cash in and sell their precious items.

For these reasons, Ramsdens Holdings could be a stock to consider.

The post To take advantage of a soaring gold price, is it time to consider this little-known UK growth share? appeared first on The Motley Fool UK.

All else equal, the share price drops by the size of the dividend on the day (normally a Thursday), although good or bad results can also send prices up or down. According to my data provider, 34 companies go ex-dividend on 11 September this week. 

Here are three of them, each from a different index. 

AIM

Let’s start with the smallest, which is AIM-listed Ramsdens (LSE:RFX). The pawnbroker will pay a 4.5p interim dividend for every share held on 9 October. That will be a 25% increase on the year before.

However, Ramsdens’ precious metals segment has been on fire due to the higher gold price, with people rushing to cash in their spare jewellery. In the six months to 31 March, the firm’s pre-tax profit surged 54% to a record £6.1m.

As such, shareholders will also receive a special dividend that brings the payout to 5p. This reflects strong commercial progress at the small-cap firm, which has grown its annual payout at a compound annual rate of 9.2% over the past few years.

Pair this with the 228% share price return since a 2020 pandemic low, and Ramsdens shareholders have little to grumble about.

While a sudden drop in the price of gold could see earnings growth slow, the stock doesn’t look expensive. It’s trading at 10 times this year’s forecast earnings and offers a 4% dividend yield.

Ramsdens is an exceptionally well-run company, making this share worth considering, in my opinion.

FTSE 250

Another stock going ex-dividend this week is Greggs (LSE:GRG). Unlike Ramsdens, the sausage roll maker won’t be dishing out any special dividends because its pre-tax profit fell 17% in the first six months of the year.

However, Greggs did generate enough cash to match last year’s interim dividend of 19p. This will be paid on 10 October.

Greggs is facing the same risks as many UK retailers — cash-strapped consumers, stubborn inflation, higher staff costs, and tumbleweed blowing down many high streets. Some investors are questioning whether pushing ahead with new shop openings in this environment is really a wise move. Time will tell.

Despite Greggs’ current challenges, the stock does look reasonably priced. Its going for 12 times next years’ forecast earnings, while sporting a 4.3% dividend yield.

I’m not looking at UK retail stocks right now, but a contrarian investor might want to dig in further.

FTSE 100

The final stock is the FTSE 100’s M&G (LSE:MNG). The asset manager will pay an interim dividend of 6.7p on 17 October, potentially resulting in a dividend impact of 2.57% this week.

M&G is the highest yielder of this trio, at 7.8%. At one point the yield was above 10%, but a 31% year-to-date rally has trimmed that.

Performance has been resilient, with net inflows of £2.1bn in the first half, a turnaround of £3.2bn from the same period last year.

Of course, this could reverse in the second half were markets to tank. And there seem plenty of potential catalysts brewing at the moment.

However, on balance, I reckon this one is also worth considering for high-yield income investors.

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Riding the gold boom

Ramsdens (LSE:RFX) is a high street pawnbroker boasting four divisions: precious metals buying, jewellery retail, foreign currency exchange, and pawnbroking loans. 

The company is benefitting from two trends that I expect to continue. The first is a rising gold price, with the yellow metal hitting new highs due to a number of factors, including stubborn inflation and global economic uncertainty.

In the six months to 31 March, a higher gold price sent gross profit in Ramsdens’ precious metals unit surging 53%. This helped pre-tax profit reach a record £6.1m, with more than £15m now expected for the full year.

The second trend is the cost-of-living crisis, which is forcing more people to sell jewellery and/or seek pawnbroking loans. Sadly, I see this getting worse, with tax rises and spending cuts now looking inevitable.

Ramsdens is focused on helping customers repay part of their loan if more time is necessary. It does this to not only act responsibly, but also to keep the door open for future borrowing when needed.

Now, one thing worth mentioning is that rival H&T has been snapped up by Firstcash to create the largest publicly traded pawnbroker in the US, Latin America, and UK. So, Ramsdens could face rising competition, as Firstcash has deeper pockets to invest in UK store expansion and marketing.

That said, Ramsdens is planning to open six to eight new shops each year, adding to its existing 169 stores. And its growing its online presence in both gold buying and jewellery selling, with dedicated websites attracting new customers.

The stock’s up 53% over the past year. Yet, a forward price-to-earnings (P/E) ratio of 10.7 still looks reasonable, while there’s a 4% dividend yield on offer.

Fast-growing fintech

The second small-cap is Beeks Financial Cloud (LSE:BKS), which rents out secure cloud servers to banks, brokers, and other financial companies. It provides low-latency hosting right next to major financial exchanges, enabling customers to trade faster.

When I first started digging into the company a few months ago, I was worried about competition. There are so many fintech innovators around these days, and this still adds risk, I feel.

However, Beeks is growing strongly, and recently signed a contract with crypto exchange Kraken. Just in August, it secured over $7m of new contracts for its Private Cloud platform.

These latest wins span financial institutions across different geographies, underpinning my confidence in Beeks’ growth prospects. It has also taken a strategic minority stake in Liquid-Markets-Solutions, a Swiss provider of ultra-fast network equipment for financial trading.

Encouragingly, Beeks is already profitable, and its forward P/E ratio of 24.8 is far from ridiculous for a growing fintech.

Foolish bottom line

To sum up, Ramsdens is a dividend-paying pawnbroker with a strong balance sheet that’s benefitting from the surging gold price.

Meanwhile, Beeks is an up-and-coming fintech growing quickly both domestically and abroad.

While small-caps can add risk, given their modest scale, I feel these two could ones to consider for those seeking a nice blend of high growth (Beeks) and steady income (Ramsdens).

The post 2 small-cap stocks to consider buying on the London Stock Exchange appeared first on The Motley Fool UK.

Here’s one I think is worth a look at 345p. 

Benefitting from the trend

Ramsdens Holdings (LSE:RFX) isn’t a gold producer, but the bull run in the yellow metal has been a gift for the AIM-listed pawnbroker.

As gold prices surge higher, more customers are dusting off their jewellery boxes and flocking to Ramsdens’ 169 stores to cash in unwanted pieces. Items suitable for resale are channelled through its Jewellery retail division, while the rest are melted down and sold via its Purchase of Precious Metals unit.

It also has a foreign currency exchange segment, as well as the pawnbroking operation, giving the firm ample cross-selling opportunities across the four divisions. 

In the six months to 31 March, gross profit from its precious metals unit jumped 53% year on year, a direct result of soaring gold prices and an increase in gold purchased. Group revenue increased 18% to £51.6m, while pre-tax profit rocketed 54% to a record £6.1m. 

The sustained exceptionally high gold price — which recently reached new record levels — coupled with the investment in the new gold buying website, is attracting new customers and increasing the weight of gold purchased. In the short term, we expect the gold price to remain high.

Ramsdens. 

Management expects full-year profits to exceed £15m and analysts see this translating into a 34% rise in earnings per share. 

Starting in October, the company also plans to open six to eight new stores each year.

Risks

There are risks, of course. One is that Ramsdens faces lots of competition in the foreign currency exchange market. And while it’s launched a new in-house international payments service, this is also a very competitive space.

Speaking personally, I transfer cash into foreign currencies on my Revolut app. However, I also use Ramsdens for holiday cash. In H1, its click and collect service volumes grew 20%.

Of course, a sudden drop in the gold price could weigh on future profits, though Ramsdens’ diversified business model should cushion this somewhat.

Where’s gold heading?

Looking ahead, I remain very bullish on the price of gold with President Trump in power. As well as imposing tariffs, which are fuelling both uncertainty and likely inflation (both good for gold), he’s undermining the independence of the US central bank. This is another thing benefitting gold.

Meanwhile, government deficits are ballooning in the West, yet public spending continues apace. In July, renowned hedge fund manager Ray Dalio said the UK is stuck in a “debt doom loop“. He said people should consider putting some money into gold.

In my view, a combination of things — Trump, tariffs, US dollar volatility, rising inflation, high government borrowing, geopolitical uncertainty — are likely to push the gold price higher. JP Morgan sees it hitting $4,000 by mid-2026.

Good value

Ramsdens’ stock’s up 48% year to date, yet still looks decent value at 10.3 times this year’s forecast earnings. There’s also a 3.8% dividend yield on offer.

For investors who are bullish on gold, I think Ramsdens deserves a look as an indirect play.

The post Looking for gold stocks? Consider buying this UK small-cap at 345p appeared first on The Motley Fool UK.

Ramsdens

Pawnbrokers like Ramsdens (LSE:RFX) tend to thrive when citizens are feeling the pinch. This is one reason why City analysts think earnings at this particular operator will soar 31% in the current financial year (to September).

But tough economic conditions aren’t the only factor, with the company’s bottom line also being boosted by strong gold prices. Bullion’s hit repeated record highs over the last year, and is tipped by some for more substantial gains as macroeconomic and geopolitical concerns grow.

Based on current forecasts, Ramsdens shares — at 347.9p per share — trade on a forward price-to-earnings growth (PEG) ratio of 0.3. Any reading below one implies that a share is undervalued.

A potential gold price reversal is a major risk. But the subdued outlook for the British economy still makes Ramsdens worth a close look in my book.

Hochschild Mining

Hochschild Mining‘s (LSE:HOC) another UK share riding high thanks to the surge in precious metal prices. This business operates a string of gold and silver mines across The Americas.

Investors can purchase physical metal or a metal-tracking fund to profit from rising prices. However, buying a mining stock can also open the door to dividend income. This particular one has paid more than $100m out in dividends since 2016.

City analysts think Hochschild’s annual earnings will spike 85% in 2025. This leaves it on a forward price-to-earnings (P/E) ratio of 9.4 times.

Meanwhile, its PEG ratio for this year stands at 0.1.

Hochschild’s shares have fallen sharply recently due to rain-affected mine stoppages, to 276p. While environmental issues like this remain a constant risk, I think recent weakness represents an attractive dip-buying opportunity.

Not only am I confident that gold and silver will continue appreciating, but the FTSE 250 firm has a string of exciting exploration opportunities (including at its flagship Inmaculada mine) that could deliver long-term growth.

Allianz Technology Trust

At 403.5p per share, the Allianz Technology Trust (LSE:ATT) trades at an 11% discount to its net asset value (NAV) per share. Its cheapness reflects the cyclical nature of its holdings and the risk of underperformance if the world economy splutters.

Crushing trade tariffs and an oil price shock are a couple of potential threats to global growth.

Yet Allianz’s investment trust — which covers sectors like chipmaking, telecoms and software development — also has substantial long-term growth potential I don’t think’s reflected at current prices. The 46 companies it holds provide a diversified way to capitalise on numerous digital opportunities like cloud and quantum computing, autonomous vehicles, cybersecurity and artificial intelligence (AI).

This mix has already delivered a huge average annual return of 13.5% over the last five years. Major holdings here include the so-called Magnificent Seven tech stocks (like Nvidia and Apple) with the exceptional of volatile Tesla.

The post 3 bargain growth stocks I think investors MUST consider right now! appeared first on The Motley Fool UK.

Serabi Gold

Gold prices have retreated from the record peaks of $3,500 per ounce punched in late April. Yet I’m confident the yellow metal — which was recently changing hands for around $3,310 — has significant scope to rebound.

In my view, this makes gold stock Serabi Gold (LSE:SRB) an attractive proposition to consider this month.

Owning gold shares exposes investors to the unpredictable business of metals mining. Setbacks can be common, which push up costs and impact production.

But it can also be a more lucrative way to profit from rising bullion prices. That’s because gold miners enjoy operating leverage: with many of their costs fixed, their profit margins can grow faster than the price of gold itself.

This is illustrated in Serabi’s strong earnings forecast for 2025 — City analysts forecast a 90% rise in annual profits.

Reflecting this impressive estimate, the miner’s forward price-to-earnings (P/E) ratio is just 2.9 times, while its corresponding P/E-to-growth (PEG) ratio is below 0.1.

Any reading below one suggests a share is undervalued.

These positive predictions also mean Serabi is tipped to start paying dividends to investors. And so the miner delivers a brilliant 6.3% prospective dividend yield.

There are no guarantees that gold will continue its multi-year bull run. But I’m confident that it can, based on increasingly erratic US economic and foreign policy, the likelihood of continued US dollar weakness, and the prospect of sustained interest rate cuts by central banks.

With all-in sustaining costs (AISC) of below $1,800 per ounce, Serabi has room to remain highly profitable in the current climate.

Ramsdens Holdings

Pawnbroker Ramsdens (LSE:RFX) is also benefitting from bullion’s continued bull run. Indeed, the small cap raised its profit guidance in early April thanks to “the continued high gold price, coupled with a 5% increase in the weight of gold purchased“.

The prospect of further gold strength is one of several reasons why I think Ramsdens should keep delivering impressive earnings growth. With the cost-of-living crisis enduring and the labour market weakening, demand for its financial services should remain buoyant.

City analysts share my bullish view on Ramsdens’ earnings. They think the pawnbroker will record a 14% bottom-line boost this financial year (to September 2025).

As a result, its shares trade on a forward P/E ratio of 9.7 times, while its corresponding PEG also comes in low at 0.7.

To add an extra sweetener for value investors, the dividend yield is a healthy 4.5%.

Conditions are clearly favourable for the company right now. Yet, I believe Ramsdens shares could also be a great investment to hold beyond the present, underpinned by its ongoing store expansion strategy. It opened seven new stores in financial 2024 alone to take the total to 169.

Unfavourable changes to credit services laws could impact profits later down the line. Near-term earnings could also be affected by a sharp improvement in economic conditions. But with no such obstacles currently on the horizon, I think the company’s a top stock to consider in June.

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Moreover, there’s often an assumption that smaller enterprises don’t have the financial clout to support rising payouts. While that may broadly be true and payouts aren’t guaranteed, there are some quality small-caps that offer potentially attractive income streams.

Here, I’ll highlight two of them that are worth considering.

Surging bullion prices

The first is Ramsdens (LSE: RFX), which has a market-cap of £76m. The firm operates 169 stores and specialises in pawnbroking loans, jewellery retail, foreign currency exchange, and the purchase of precious metals. 

The stock’s almost doubled in five years, and jumped nearly 10% on 8 April. This came after the firm raised its profit outlook for the full year, driven by the surging gold price.

Pre-tax profit’s expected to be at least £13m, higher than the £12m previously expected by analysts. In its last fiscal year (which ended in September), Ramsdens’ pre-tax profit was £11.4m on revenue of £95.6m.

Gross profit in its precious metals segment increased 50% year on year in H1. This was driven by the rising gold price, coupled with a 5% increase in the weight of gold purchased. To take advantage of this trend, the firm launched a dedicated gold-buying website last month. 

Meanwhile, gross profit at its pawnbroking and jewellery retail businesses increased by 10% and 15%, respectively. Foreign currency gross profit was flat though, partly because the Easter holiday period is later this year. But Ramsdens says its multi-currency card is performing well and an international money transfer service is now live. 

Risks here include a sharp decline in gold prices or a spike in inflation. While the latter might boost its pawnbroking and precious metals businesses, less disposable income could also impact demand for jewellery and holidays (currency exchange services).

Rising profits obviously bode well for dividends though. The dividend yield for the current year is a respectable 5.5%, with the payout comfortably covered 2.3 times by prospective earnings.

Finally, the valuation looks attractive. The forward price-to-earnings ratio is just 8, which isn’t high for a consistently profitable company with a strong balance sheet.

Building income through bricks

Next is Michelmersh Brick (LSE:MBH), a penny stock with an £89m market-cap. The company makes over 125m clay bricks and pavers each year. It also owns a number of premium brick brands, which tend to have higher margins.

At 95p, the share price is down 35% over the past four years, largely due to higher interest rates putting pressure on UK housebuilding. The risk here is that this weakness persists longer than expected.

Taking a longer view however, the brick maker’s prospects appear bright. The government had pledged to build 1.3m homes by 2029 to ease the chronic housing shortage, while the Office for National Statistics projects that net migration will average 340,000 a year from 2028.

These are very supportive trends for housebuilding (and therefore bricks). Michelmersh says that positive momentum in its order intake from 2024 continued into Q1 of this year, leaving it well positioned for a market recovery.

The well-supported forward dividend yield is around 5%.

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With this in mind, here are two great passive income stocks to consider today:

As you can see, the forward dividend yield on each of these shares comfortably beats the FTSE 100 average of 3.6%. Here’s why I think they could prove great ways to make a second income over the long term.

Ramsdens

Pawnbrokers like Ramsdens can see revenues sink during periods of economic strength. But a murky outlook for Britain’s economy suggests businesses like this could continue to thrive.

Revenues and pre-tax profits here soared 14% and 12%, respectively, in the 12 months to September 2024. The top and bottom lines were also boosted by the strong rise in gold prices that has continued in recent weeks.

This encouraged the company to raise the the total dividend in fiscal 2024 by 8% year on year.

Admittedly Ramsden’s history has been lumpy so far this decade, with payouts disrupted by the Covid-19 emergency. But they’ve been rising steadily since financial 2021, and I think the company looks in good shape to meet this year’s predicted cash rewards.

The forecast dividend is covered 2.3 times by expected earnings, providing a healthy margin for error. The company also benefits from a strong balance sheet, with net cash standing at £7.4m as of September.

Primary Health Properties

Real estate investment trusts (REITs) are required to pay out at least nine-tenths of profits from their rental operations in dividends each year. While this provides some peace of mind for investors, it doesn’t guarantee a large or growing dividend over time, as payouts are still sensitive to core performance.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

In this regard, Primary Health Properties is (in my opinion) one of the most secure REITs for dividend income. Indeed, annual payouts have risen every year for more than a quarter of a century.

This stability is thanks to the firm’s focus on the ultra-defensive healthcare market. Unlike REITs that operate in cyclical sectors, demand for the properties it lets out (like GP surgeries) remain unaffected by the broader economic landscape.

This isn’t to say that trading conditions will remain supportive looking ahead. For instance, changes to NHS budgets could impact future rents. But NHS reform that’s putting greater focus on good primary healthcare provides me with some reassurance.

I’m also confident earnings and dividends will rise as our ageing population drives demand for healthcare services.

In the meantime, a strong balance sheet provides solid foundations for Primary Health to keep raising dividends over the near term. The firm’s loan-to-value (LTV) of 48.1% in December remained comfortably within its target range of 40-50%.

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