If I had spare cash to invest, I’d buy the following three dividend shares to hold through December and beyond.
Consistent cash flow
With its share price near 200p, Moneysupermarket.com (LSE: MONY) has a forward-looking dividend yield of just over 6% for 2023.
I think that’s attractive because the price comparison website operator has a multi-year record of consistent cash flow and shareholder payments. The compound annual growth rate of the dividend is running at around 3.5%.
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In October’s third-quarter trading update, Moneysupermarket reported “Growth in the quarter ahead of expectations.” Revenue increased by 15% over three months and by 6% for the nine-month period. And, looking ahead, the directors expect full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) to be “towards the upper end of market expectations”.
Chief executive Peter Duffy said there are early signs of improving trends in the Insurance market. And, in the firm’s Money division, “More consumers are finding attractive products to switch to”. He reckons the firm’s “strong brands” will help to support consumers during the current economic hardships.
It’s possible that Moneysupermarket’s revenue could dip if the general economic slowdown gains traction. But I’d shoulder the risks and buy this stock for dividend income today.
Rising dividends
The shares of Spectra Systems (LSE: SPSY) are near 160p. And the forward-looking dividend yield is just above 6% for 2023.
Spectra describes itself as a leader in machine-readable, high-speed banknote authentication, brand protection technologies, and gaming security software. And the firm’s activities have generated a multi-year record of strong cash flow and rising shareholder dividends.
In September’s half-year results report, the company posted a 15% increase in revenue compared to the figure 12 months earlier. And cash generated from operations increased by more than 50%.
Looking ahead, chief executive Nabil Lawandy said Spectra will likely “meet market expectations for the full year”. City analysts have pencilled in single-digit-percentage increases for earnings and the dividend for this year and in 2023.
Spectra is a tiny listed business with a market capitalisation of just under £68m. There’s some risk in that situation. But the balance sheet is strong. And I’d buy the stock for income.
A privileged position
Near 1,028p, the National Grid (LSE: NG) share price throws up a forward-looking dividend yield of just over 5.5% And that’s for the trading year to March 2024.
The company’s privileged position at the heart of the UK’s electricity transmission and distribution infrastructure leads to consistent cash flows. And there’s a sizeable energy business in the US as well.
Both the dividend and operational cash flow show a multi-year rising trend. And that’s attractive to me. However, the business faces heavy regulation and must constantly reinvest a lot of money to maintain and upgrade its networks.
There’s a lot of debt on the balance sheet, but I reckon the consistent trading and financial record helps to justify that. Nevertheless, future regulatory demands could inhibit the company’s ability to keep its dividend growing.
On 10 November, the company delivered a strong set of half-year figures and a bullish outlook statement. I’d embrace the risks and hold this stock for the long term.
