Here’s a selection of top dividend stocks that I’m tempted to buy today. However, when investing, remember that your capital is at risk and past performance is no indication of future performance.
#1: Safe as houses
The cost of renting residential property in the UK continues to soar. According to the Office for National Statistics, tenant costs jumped 2% in the year to January. This was the fastest rate of growth for five years. It’s my opinion that rental levels will keep rising too given the worsening shortage of available properties.
I wouldn’t invest in buy-to-let to play this favourable market though. I’d invest in Residential Secure Income instead. Not only would this allow me to avoid the huge upfront costs and increasing regulatory burden that buy-to-let brings. This particular UK share also sports a huge 4.8% yield today. I’d buy it even though demand for rental properties could slip if homebuilding rates for buyers leap as planned.
#2: Ship-shape
The costs of Storm Eunice to Britain’s insurers threaten to be colossal. Record provisional gusts of 122 miles per hour have caused massive damage that could take a big bite out of profits at the likes of FTSE 100-quoted Admiral Group. But I still expect this particular income stock to pay big dividends this year (City estimates currently create a 5.8% yield).
Admiral has a rock-solid balance sheet that should help it withstand any significant cost hit and deliver more hefty shareholder payouts. Its Solvency II ratio sat at a mighty 209% as of June, latest financials showed. I think Admiral could be a great long-term buy too as it expands rapidly in overseas territories.
#3: A golden dividend stock to buy
Gold prices continue to be swept higher as concerns over the Ukraine crisis grow and inflation hits multi-decade highs in major economies. The precious metal rose to eight-month peaks above $1,900 per ounce late last week and it’s a whisker away from hitting fresh record highs. I’m thinking of buying gold producer Centamin to capitalise on the bright outlook for metal prices.
The downside to investing in gold shares is that mining is hugely-risky business. Production issues can hit revenues hard and long-term profits forecasts can go up in smoke if exploration work produces poor results. Still, I think this is a risk worth taking given Centamin’s strong operational record and the solid outlook for gold prices. This dividend stock carries a 5.1% yield right now.
#4: A great renewable energy stock
I’m also tempted to buy FTSE 100 energy producer SSE today, a stock that also yields 5.1%. As an income investor, I like this sort of dividend stock: the essential role of electricity production means that it can expect profits to remain robust in all weathers. This gives SSE the confidence to pay large dividends year after year.
I like SSE too because of its focus on renewable energy. Rising demand for low-carbon energy could make it a much better investment than energy producers that use fossil fuels. I’d buy SSE even though changing Ofgem regulations could hamper profits growth later down the line.