On the hunt for scintillating dividend stocks that offer up great value, too? Then please step this way…
Headlam Group is a share whose giant dividend yields and low valuation makes it worthy of serious attention from stock hunters today.
Earnings at Europe’s largest floorcoverings distributor are expected to grow at a slower rate in 2018 thanks to trading difficulties in the UK, and a 2% rise is currently being forecasted by City analysts. Still, the strong performance of the company in Continental Europe — underpinned by robust economic conditions — is still helping to keep the top line moving higher.
A forward P/E ratio of 10.6 times is extremely undemanding given Headlam’s proven resilience in difficult domestic markets, not to mention the likelihood of improved earnings expansion beyond this year as margin-moving efforts ramp up. A 5% profits advance is forecast for 2019.
The chunky dividend yields at Headlam give another reason to invest today. Last year’s 24.8p per share payout is expected to rise to 26p in 2018 and to 27.4p in 2019, projections that yield 5.8% and 6.1% respectively.
N Brown Group
Now clothing retailer N Brown Group may not be for the faint of heart owing to the troubles washing over the UK retail sector right now. But in my opinion a forward P/E ratio of 6.2 times, well inside the bargain territory of 10 times or below, more than reflects these near-term troubles.
Indeed, I reckon this low valuation provides the perfect base upon which to latch onto N Brown’s compelling long-term growth strategy. The business is expected to flip from a 1% earnings reversal forecasted for the year to February 2019 with a 5% advance in fiscal 2020, and I can see earnings continuing to move higher as its transition to an online-only retailer gathers pace.
And in the meantime, its specialism — i.e. customers looking for so-called plus size garments — should help it to avoid the profits collapses of many high street operators as consumer spending in the UK slumps.
N Brown is expected by City brokers to keep the full-year dividend locked around 14.23p per share in fiscal 2019 before raising it to 14.4p next year. This means the company sports gigantic yields of 10.1% and 10.2% for these periods.
Now yields at Devro may be a little less tempting, standing at 4.7% for this year and 4.9% for 2019 (thanks to anticipated payouts of 8.9p and 9.3p for these years). But the prospect of strong and sustained dividend growth amid surging emerging market demand for its sausage casings still makes it an appetising income stock, in my opinion.
Indeed, the number crunchers are expecting earnings to tear 11% higher in 2018 and 15% in 2019 thanks to this improving overseas demand. And it isn’t difficult to see why the City is so optimistic as, earlier this month, Devro described “strong [volume] growth in Continental Europe, Russia and Latin America.”
Sales are likely to keep on heading northwards too as product development continues, plant improvements pay off and consumer spending power in its hot developing markets grows. These factors all make Devro a brilliant pick today, as does its low forward P/E multiple of 13.7 times.
View Original Post