2 dividend growth stocks (including a cheap penny stock) to buy!

I’m searching for the best dividend growth stocks to buy as inflation soars. Here are two such UK shares on my radar that I’d buy today.

A penny stock on my radar

Pub chains like Marston’s (LSE: MARS) face some significant near-term dangers as beer prices jump. They have a tough choice to make: pass these costs onto the consumer and risk a revenues slump, or absorb the cost themselves at the expense of margins.

Marston’s is directly impacted by rising brewing costs too through its stake in the Carlsberg Marston’s Brewing Company joint venture.

Today, sector industrialist and entrepreneur Lord Bilimoria (founder of Cobra Beer, which Marston’s sells) told the BBC that the industry is facing a “vicious cycle” of rising costs and that price rises “were a necessity”. The problem is one that the pub industry (and its investors) cannot ignore.

However, I think these could be baked into the ultra-cheap Marston’s share price. Today the business trades bang on the bargain-basement P/E ratio watermark of 10 times.

As a long-term investor, I’m pretty tempted to pick up the publican at these levels. People are spending a greater proportion of their incomes on eating and drinking out in a trend that stretches back years. And thanks to its 1,500-odd pubs that span the UK, Marston’s has a chance to really capitalise on this opportunity.

Marston’s was forced to stop paying dividends following the outbreak of Covid-19. But shareholder payouts are predicted to leap as the world seems to be emerging from the pandemic. A payout of 0.7p per share is forecast by City analysts for this financial year to September 2022. And rewards are predicted to treble to 2.1p in financial 2023. This powers the yield from 0.9% today to a healthy 2.6% for next year.

Wind in its sails

Shipping giant Clarkson (LSE: CKN) is also expected to lift dividends at a robust rate. What’s more, at 2.8% for 2022, it still comfortably beats the broader FTSE 250 average of 2.1%.

There aren’t enough ships to meet the demands of the recovering global economy. And Clarkson, a major provider of shipbroking and maritime financial services, is one company that’s reaping the rewards. Booming shipping rates are expected to last too, as economic conditions steadily improve and subdued vessel building in recent years impacts the market.

Of course, Clarkson’s profits would take an almighty whack if the economic rebound runs out of steam. A worsening Covid-19 crisis, for instance, or severe central bank action to curb soaring inflation are a couple of dangers to the company’s bottom line.

But, right now, it’s full steam ahead for the shipping colossus. Indeed, Clarkson upgraded its 2021 profits expectations again last month, thanks to robust trading in December.

Against this backdrop, I think Clarkson’s dividends could grow rapidly for years to come. City analysts are tipping a full-year dividend of 89p per share for 2022, up 5.8% from last year’s levels. Payments are forecast to leap 7.1% to 95.3p in 2023 too.