Despite the uncertainty created by Brexit — a particularly-troubling issue right now as the possibility of a no-deal withdrawal grows — I would still be happy to spend my last few pennies to secure shares in Springfield Properties (LSE: SPR).
Profits at the homebuilder may not be booming like they once were in the current climate, but due to the scale of Scotland’s homes shortage, I’m confident the bottom line can continue to grow and the company can continue to keep raising dividends as well.
Interim results released in January certainly encouraged me as Springfield announced that, as pre-tax profits more or less doubled to £6.1m in the six months to November, it was raising the half-time dividend 20% to 1.2p per share. News the business was carrying a “strong order book” into 2019 bolstered my bullishness still further.
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With Springfield supercharging build rates, the number crunchers expect the firm to keep growing dividends by double-digit percentages this year and next. And this means last year’s 3.7p per share total payout is tipped to rise to 4.5p this year, and to 5.5p in fiscal 2020, figures that yield a massive 4% and 4.8%, respectively.
The 5% yielder
If you’re hungry for yield then Tritax Big Box (LSE: BBOX) is another safe-as-houses selection to park your cash in.
The breakneck growth of e-commerce means that demand for its big box logistics facilities is going from strength to strength, as highlighted by full-year results earlier this month. Net asset value per share rose 7% year-on-year to 152.83p in 2018, while its portfolio value rose by almost a third to £3.42bn and contracted yearly rent rolls leapt 28% to £161.12m. And the firm remains committed to expanding to boost profits (it made eight acquisitions last year alone).
Tritax lifted the full-year dividend 5% last year to 6.7p per share, and it isn’t a surprise to the number crunchers estimating that the trading environment will facilitate more medium-term payout growth. A 6.9p dividend is predicted for this year, yielding an exceptional 4.8%. And the 7.2p reward anticipated for 2020 yields 5%.
Stunning 7.5% yields
For investors seeking truly-titanic dividend yields then Hastings Group (LSE: HSTG) is hard to look past.
The car insurance giant impressed the market again last month with its efforts to grab clients from its competitors, the number of live policies jumping 3% in 2018 to 2.71m in an increasingly-tough marketplace. This led to pre-tax profits also increasing 3% to £130.6m, and with free cash generation booming 42% year-on-year, Hastings raised its payout ratio target for 2019 and beyond to between 65% and 75%, up from a prior goal of 50% to 60%.
This policy change means that City brokers are minded to predict a 14.5p per share dividend at Hastings for 2019, up from 13.5p last year, and resulting in a giant 6.7% yield. And things get even better for 2020, the touted 16.1p dividend nudging the yield to 7.5%. I reckon the FTSE 250 firm is a top buy for income investors today.
