2 dividend stocks that I think might be November no-brainers

With Coca-Cola trading at pandemic multiples and Primary Health Properties offering a 7% yield, could November be a good time to buy dividend stocks?

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Buying dividend stocks is a great way of earning passive income. And I think there are some exceptionally good opportunities for investors at the moment.

I have two stocks on my radar for November. One is a US drinks company that almost never trades at a discount and the other is a UK real estate investment trust that I think looks like a bargain.

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Should you invest £1,000 in Primary Health Properties right now?

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Coca-Cola

Top of my list is Coca-Cola (NYSE:KO). The stock is one of the best-known businesses in the world and a large part of Warren Buffett’s investment portfolio at Berkshire Hathaway

The company’s strengths are well-known. Demand for its products tends to be stable even in an economic downturn and its strong brands give it an edge over competitors when it comes to margins.

These are important advantages that set Coca-Cola apart from its rivals. But the company has had these features for a long time, so why is the stock only making it to my buying list now?

The simple answer is that the stock has been prohibitively expensive before. But I think that’s changed recently.

At its Covid lows, Coca-Cola shares traded at a price-to-earnings (P/E) ratio of around 22. After a 10% decline this year, though, the stock now trades at a P/E ratio of 21. 

I think 2020 was a rare opportunity to buy the stock at an attractive price. Having missed it back then, I’m seriously considering whether I can afford to let the opportunity pass by again.

No stock is without risk and Coca-Cola shareholders will want to be cautious of inflation as a threat to margins. But I think this is a quality company at an unusually attractive price.

Primary Health Properties

In the UK, I have Primary Health Properties (LSE:PHP) on my list of shares to consider buying. I bought the stock last month and I’m expecting to do so again in November. 

Straight away, the 7% dividend looks attractive. But investors should be careful — a high yield can often be a sign that the market thinks the business is in trouble. 

The value of the company’s assets might be falling and there’s a risk that interest rates being held at 15-year highs might cause this trend to continue. But I see this as a minor concern. 

In terms of passive income, I’m not looking for the business to sell off buildings. Instead, I’m looking for it to lease them to tenants and collect rent.

Primary Health Properties seems to be doing well in this regard. Occupancy rates are high, rents are increasing, and the risk of defaults seems to be low with the most of the rent funded by governments.

The Bank of England’s decision to keep rates steady is causing the price of shares in real estate investment trusts to rise at the moment. But they’re still well short of where they were in January.

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That’s why I’m looking to take the opportunity with Primary Health Properties shares this month. I’m not sure how much longer the stock is going to be cheap.

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Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Stephen Wright has positions in Berkshire Hathaway and Primary Health Properties Plc. The Motley Fool UK has recommended Primary Health Properties Plc. 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.

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