Two Great Dividend Stocks You Should Buy Before May (Like This FTSE 100 Giant)
These companies have plenty of chance to deliver strong share price growth next month. Now’s a great time to go shopping, then.
Full-year numbers for Bloomsbury Publishing are scheduled for Tuesday, May 21, and if March’s trading update is anything to go by I’m expecting another cheery market reception.
The House of Harry (Potter) can still rely on the escapades of the boy wizard to keep earnings rising year after year and for cash flows to continue impressing. But Bloomsbury isn’t a one-trick pony and it has a broad range of global bestsellers to drive the top line across its fiction and non-fiction titles.
What really gets me excited, though, is the vast investment the small cap is devoting to its Academic and Professional division, an area which is ripe with potential and which the company declared put in another “strong performance” in the 12 months to February 2019.
It’s not a shock to find that City analysts are expecting profits growth at Bloomsbury to rev from low-single-digit percentages in fiscal 2019 to 14% in this year, then, and for dividends to keep rising through this period. Thus an 8.3p per share annual dividend is forecast for the present period, resulting in a chubby 3.7% yield.
The publishing colossus looks in great condition to make good on these forecasts as well. Not only are predicted rewards covered by anticipated profits by two times, bang on the widely-regarded security benchmark, but Bloomsbury’s position as a terrific cash creator — net cash leapt to £27m as of February from £16.9m six months earlier — also sets it in good stead to keep hiking shareholder payouts.
Another great income share to buy today is Reckitt Benckiser Group as I believe a set of strong trading first-quarter figures will be forthcoming on Thursday, May 2.
The household goods company saw its share price fall below £60 per share last week following news that charges of illegal marketing were being brought against its Indivior by the US, raising speculation that the Footsie firm could be facing hefty legal bills related to the heroin-treatment manufacturer which it spun off five years ago.
I would consider this to be a decent dip-buying opportunity for long-term investors, though, and particularly as those forthcoming trading details could well remind the market of its brilliant defensive qualities and the subsequent likelihood of solid and sustained earnings and dividend growth. It certainly did this when full-year results were unveiled back in February,
Now City analysts aren’t expecting earnings at Reckitt Benckiser to blow anyone away in the immediate future at least, a bottom-line increase of only 2% being predicted. What the calculator bashers do believe, though, is that provides the base for dividends to keep on improving as well — a total annual reward of 176.6p per share is estimates, a target which yields a decent-ish 3%. An added bonus: this projection is covered two times over by predicted earnings.
Clearly larger yields can be found, but the ubiquity of its beloved products means that Reckitt Benckiser can be relied on to keep increasing profits and thus bumping dividends higher year after year, too. And this makes it a great selection for income investors, in my opinion.