I’m looking for the best dividend shares to help me build a growing passive income. Here are two I’m hoping to add to my Stocks and Shares ISA in the coming weeks.
Spire Healthcare
Private hospital operator Spire Healthcare (LSE:SPI) is thriving as NHS waiting lists remain cripplingly high. Most recent financials showed revenues soar 13.1% and operating profit increase 24.2% during the first half of 2023.
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Demand for private healthcare is surging in the UK as people turn to medical insurance and pay for their own treatments. Furthermore, revenues are increasing as these businesses step in to help reduce the NHS backlog. NHS-related turnover at Spire rose by almost a fifth between January and June.
Latest data showed there were 7.6m Britons on NHS waiting lists as of February. This will take years to decline given the state of the UK’s public finances which, in turn, provides private healthcare groups like this with excellent earnings visibility.
One fly in the ointment is the prospect that high labour costs could keep a lid on Spire’s margins. But encouragingly the company is enacting efficiency measures (like improving procurement and reorganising its hospitals into hubs) to offset these pressures.
City analysts expect the FTSE 250 company’s dividends to surge 40% year on year in 2024. While this results in a modest 1.2% dividend yield, the prospect of strong and sustained payout growth makes it a top stock to buy, in my opinion.
It’s why I already own Spire Healthcare shares in my ISA.
Halma
I’m also hoping to open a position in Halma (LSE:HLMA) at the next opportunity. The safety products manufacturer is a true Dividend Aristocrat, having raised the annual payout by at least 5% for 44 straight years.
And City brokers expect this proud record to carry on. Dividend growth of 7% and 9% is forecast for the financial years to March 2024 and 2025 respectively. Consequently, Halma shares carry yields of 1.1% and 1.2% for these fiscal periods.
As well as being a brilliant dividend growth stock, the business is also one of the FTSE 100‘s greatest growth shares. It has delivered record sales and profits for 20 consecutive years.
This is thanks to its outstanding ability of identifying takeover targets, seamlessly integrating them into the wider group, and supercharging their efficiency. Acquisitions can throw up unexpected problems like disappointing sales and higher-than-expected costs. But Halma’s strong track record is encouraging.
Today, Halma owns a portfolio of around 50 companies located in 20 different countries. This is an attractive quality as it provides profits with extra stability. In other words, trouble for one or two businesses doesn’t derail results at group level.
I also like the company because its focus on safety, healthcare and the environment provides opportunities for excellent long term growth. This is thanks to phenomena like increasing regulation, rising healthcare demand, and the fight against climate change.
Like Spire, I’ll be looking to buy Halma shares when I next have cash to invest.
