When looking for the best shares to buy now, I need to be clear about my criteria. I’m personally an investor who favours income, so I feel dividend stocks are my best way forward. With some attractive yields available from stocks in FTSE 250, here are two companies that I have my eye on for dividends.
A renewable energy share to buy now
The first company I like is Contour Global (LSE:GLO). The energy supplier sits in the FTSE 250. I think it’s a great share to buy now following the recent release of 2021 results. There was much to like in the report, with the business making a strong push towards renewable energy. Even though thermal energy is still the majority load for the business at 57%, renewable energy sourcing is now up to 29%. This should make it popular with ESG investors going forward.
In terms of financials, it has a policy of growing the dividend per share by 10% per annum. Given the current share price, this means the dividend yield sits at 7.28%. This is well above the FTSE 250 average, making it a top dividend share in my opinion.
Looking forward, I think the dividends should continue to grow due to profits heading higher. The raw 2021 figures are distorted by the acquisition of Western Generation in early 2021. However, adjusted revenue was still up 38% year-on-year. This allowed adjusted EBITDA to also jump by 17%.
I do think that there’s a risk due to the skyrocketing natural gas prices. Contour actually provides some energy to the wholesale market, so the concern is that some large corporate clients might default on their obligations due to the high prices.
An alternative banking option
Another option for reliable dividend income, in my opinion, is Close Brothers (LSE:CBG). The merchant bank doesn’t garner the same amount of attention as other UK-focused banks such as Lloyds Banking Group. However, it has a well-established reputation and offers a generous dividend yield of 5.47% at the moment. So when I compare it to the likes of Lloyds with a yield of 4.34%, I can see the appeal.
I think it’s a share to buy now due to the benefit that banks should enjoy in the coming year from higher interest rates. Rising rates allow the business to increase the margin made between charging for liabilities and paying out on assets.
Close Brothers only operates in certain areas of banking, but two of the main ones are deposit taking and provision of lending. Therefore, it should stand in a good position to perform well this year.
However, it does also operate in wealth management. This is becoming an increasingly competitive space, with other larger banks making this area a priority. Therefore, the risk is that Close Brothers loses market share in this area, which could also hinder deposit levels if the money gets moved elsewhere.
Overall, I think both dividend payers are worthy shares to buy now and I’m thinking of doing just that.