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Posted by - Latinos MediaSyndication -
on - April 16, 2023 -
Filed in - Financial -
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I’m searching for the best UK dividend stocks to buy for my portfolio this week. Here are two near the top of my shopping list.
GraingerResidential landlord Grainger (LSE:GRI) doesn’t have the biggest dividend yield out there. In fact for the current fiscal year the figure sits at a decent, if unspectacular, 2.5%.
Yet I believe the FTSE 250 firm is still a great stock to buy for passive income. This is because it has a strong record of growing annual dividends, excluding a temporary reversal during the pandemic. Improving market conditions suggest it should keep increasing shareholder rewards for a long time, too.
The average rent for a newly-let home hit £1,236 per month last month, estate agent Hamptons says. This was up 10.8% year on year and the second-fastest rise in a decade.
As the UK’s largest-listed landlord, Grainger is reaping the fruits of this favourable landscape. Its portfolio of around 10,000 homes enjoyed like-for-like rental growth of 6.1% during the four months to January, latest financials showed.
And the firm is expanding its estate rapidly to fully capitalise on the high-rent environment. It has a pipeline of around 7,000 new homes.
As a growing population drives demand northwards, and weak housebuilding rates and the ongoing exodus of buy-to-let investors hampers supply, I expect profits to continue growing strongly. I’d buy it even though persistently high build cost inflation could damage profits.
CentaminInvesting in gold stocks such as Centamin (LSE:CEY) poses a very different set of risks to share pickers.
When prices of the metal they produce dive, profits at these businesses tend to fall off a cliff. What’s more, a variety of operational problems at the exploration, development, and production stages can emerge at any time to push costs up and destroy revenues forecasts.
Yet despite these dangers I think Centamin remains an attractive buy. I believe its low valuation — as reflected in a price-to-earnings (P/E) ratio of eight times for 2023 — more than reflects these risks. It also carries a meaty 6.2% forward dividend yield.
But why buy the gold stock today, you may ask. I think investing in these sorts of mining shares is a good idea at any time as insurance for when things get tough. Such crises can suddenly happen at any moment, after all.
That said, I believe opening a position today might be especially wise as gold metal prices move close to new record highs.
Having built a base around $2,050 per ounce, further heady gains could be around the corner. Ongoing worries over the global economy, speculation of central bank rate cuts, a weak US dollar, and a tense geopolitical backdrop could all fuel extra demand for the safe-haven asset.
I think Centamin could be a good way for me to exploit this theme, too. It is ramping up production at its flagship Sukari mine in Egypt. And it owns several exciting exploration assets in other parts of Africa.
The post 2 dividend stocks I might buy to boost my passive income! appeared first on The Motley Fool UK.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.