Two Cheap Dividend Shares That Could Surge Next Week (And One That Could Sink)
I’m expecting another set of strong results from GVC Holdings when first-quarter numbers are unpacked on Friday, April 5.
The rate at which the online gambling market is growing means that sales at the firm are swelling at a tremendous pace. In 2018 online net gaming revenues soared 19% and they continued to accelerate in the first weeks of 2019, up 22% in the first seven-and-a-bit weeks of the new year to February 24.
Tension over changing regulation in the UK that limits the stakes on fixed-rate betting machines has weighed on GVC’s share price over the past year — rules that will cut maximum bet sizes to £2 from £100 from next month — as have concerns over recent share sales by the chief executive and chairman.
I reckon, though, that upcoming trading statement will remind the market of its rising might and prompt fresh waves of buying, helped by its cheap rating, a forward P/E multiple of 9.2 times. What’s more, GVC’s gigantic 6.3% dividend yield will be bound to turn plenty of heads, too.
Sales Still Sinking
Conversely, I believe that Topps Tiles is severe danger of diving in the coming days. Half-year numbers are scheduled for Wednesday, April 3 and if January’s last update is anything to go by I am quite fearful — back then the home improvement retailer announced that like-for-like sales dropped 1.4% the first quarter amidst what it described as a “challenging market backdrop.”
Now City analysts are tipping the full-year dividend to finally be slashed for the 12 months to September 2019, to 3.3p per share following the firm’s decision to lock it at 3.4p for the past several years.
I fear, though, that a bigger reduction could be in the offing given Topps Tiles’s foggy profits outlook, even in spite recent efforts to slash debt levels. I don’t care about its low forward P/E ratio of 11.6 times nor its corresponding 4.4% dividend yield; I wouldn’t touch it with a bargepole right now.
More Brexit Stress Around The Corner?
Now Polymetal isn’t due to release any trading details in the week fast approaching, but I believe now could be a great time to pile into the commodities producer.
Why? Well primarily because of Brexit and the probability of more Parliamentary stalemate next week, something that could drive gold prices still higher.
Earlier today Theresa May’s Withdrawal Agreement hacked down by members of Parliament for the third time, and the next of the saga on Monday will see the House of Commons embark on a series of indicative votes try to forge an agreement on an orderly way for the country to exit to the European Union. An accord isn’t exactly in the bag, though, despite the increasingly-urgent situation: indeed, their failure to achieve a majority on any plan during a similar process last Wednesday doesn’t bode well for the next set of votes. All the while Britain is slipping closer to the trapdoor of Friday, April 12, the date on which the country will flop out of the European trading bloc under catastrophic ‘no deal’ conditions.
As I type Polymetal boasts a forward P/E ratio of just 9.9 times and carries a chunky 5% dividend yield, too. Irrespective of how the next stage of Brexit pans out I reckon the gold play is an excellent share to snap up today.