Every month, we ask our freelance writers to share their top ideas for dividend stocks to buy with you — here’s what they said for November!
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Coca-Cola HBC
What it does: Coca-Cola HBC is a beverages company that bottles and sells Coca-Cola products.
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By Edward Sheldon, CFA. Coca-Cola HBC (LSE: CCH) is a dividend stock with a lot of appeal, to my mind.
For a start, it has a decent yield. At present, the forward-looking yield here is around 4% – above the market average.
Secondly, the company has an excellent dividend growth track record. Since it came to the market in 2013, it has increased its payout every year.
Third, the dividend stock’s price-to-earnings (P/E) ratio is quite low at around 12. That is significantly lower than the P/E ratio of its big brother, Coca-Cola Co (approx. 20).
Now, one risk to consider is the future impact of weight-loss drugs such as Wegovy. Concerns over these drugs – and their ability to reduce the desire to consume snack foods – have hit food and drink stocks recently.
I’m not overly concerned about this risk, however. Going forward, I reckon Coke, and other Coca-Cola products such as Sprite, Fanta, and Schweppes Indian Tonic Water, are likely to continue being consumed in vast quantities.
Edward Sheldon owns shares in Coca-Cola Co.
Legal & General
What it does: Legal & General is one of the UK’s largest financial and insurance firms with a focus on four main areas.
By Charlie Keough. As one of the highest payers in the FTSE 100, my selection for November is Legal & General (LSE: LGEN).
Currently yielding over 9.5%, this sees it sit in fourth spot for the index’s largest returners. And while dividends are never guaranteed, with it covered nearly two times by earnings I’m relatively confident of a payout.
What’s more, the company introduced a cumulative dividend plan back in 2020. As part of this, its on track to deliver between £5.6bn-£5.9bn of dividends by next year.
There are other reasons I’m a fan of the dividend stock, including its strong brand recognition.
The business hasn’t come unscathed from the issues we’ve witnessed in the financial sector. And its assets under management have taken a hit. Moreover, with its CEO stepping down, there’s always the risk this could lead to uncertainty.
However, with a stable and high dividend yield, I think Legal & General could be a smart long-term buy.
Charlie Keough owns shares in Legal & General.
Somero Enterprises
What it does: World-leading laser-guided concrete screed machine manufacturer primarily serving the US construction industry.
By Zaven Boyrazian. The construction industry is notoriously cyclical. But throughout history, its long-term demand has never vanished. And that’s not a trend likely to change anytime soon, in my mind. That’s why Somero Enterprises (LSE:SOM) is looking increasingly tempting once more.
The firm designs and manufactures concrete-laying screed machines. It’s not a fancy company by any mile. But these machines are able to produce top-notch results with far smaller construction crews, making them a customer favourite.
The stock has tumbled over 25% in the last 12 months on shrinking sales. But this seems to be just the natural industry cycle.
With interest rates on the rise, construction projects are being delayed. This is hardly the first time external factors have hampered Somero’s performance, and it likely won’t be the last.
However, with a cash-rich, debt-free balance sheet, the firm appears well-positioned to weather the storm. And thanks to the aggressive investment of the US government into infrastructure, Somero stock should have no trouble returning to dividend growth as the cycle ramps back up.
Zaven Boyrazian owns shares in Somero Enterprises.
The PRS REIT
What it does: The PRS REIT acquires and leases houses across the UK. Its portfolio consists of just over 5,000 properties.
By Stephen Wright. With the UK housing market under pressure, now looks to me like a good time to buy shares in The PRS REIT (LSE:PRSR). Essentially, the business is a buy-to-let property company.
Obviously, the value of the company’s assets has been falling over the last 12 months as house prices slip. And the company’s share price is down by around 18% as a result.
I don’t think this will last long, though. According to the latest report from the Office for National Statistices, construction output in the UK is falling, meaning fewer houses are getting built.
Furthermore, the underlying business looks good to me. Around 97% of the company’s properties are occupied and 99% of contracted rent gets paid on time.
The biggest risk is the company’s debt pile, which is significant. But I think there’s an unusual opportunity in the UK property market right now and this is the dividend stock I’d buy to take advantage.
Stephen Wright does not own shares in The PRS REIT.
