Dividend shares have been looking cheap, and I reckon September’s financial turmoil just made a load of them even cheaper. If we buy high-dividend shares when prices are low, we can lock in higher effective yields for the long term.
Here are three dividend-paying companies with news coming our way in October.
Housing cash
Housebuilders had been suffering as interest rates were rising. And now that it looks like the Bank of England could be forced into even bigger hikes by the slump in the pound, fears are growing further.
As the final week of September progressed, more and more mortgage lenders withdrew mortgage deals as costs became increasingly uncertain.
Against that background, Bellway will deliver full-year results on 18 October. Bellway shares have fallen 50% in value over the past 12 months.
The results will be pretty much out of date even before they’re posted. But I’ll be watching for any hints at how business has gone since year-end, and where the company thinks its outlook is going.
If it holds, the forecast dividend would yield 6.6% this year.
Fund management
The whole investment management business has slumped, with companies suffering cash outflows as investors seek safety elsewhere. Jupiter Fund Management (LSE: JUP) is among them, with a whopping 60% share price fall over the past 12 months.
Jupiter should be releasing a third-quarter trading update on 20 October, and I’ll be looking for anything that might affect the dividend.
For the first half, the company maintained its dividend of 7.9p per share, unchanged since the same period a year previously. At the time, Jupiter said it “remains a well-capitalised business with a strong balance sheet“.
If the board also maintains the final payout, we could see a whopping 18% full-year yield. But there’s big uncertainty there, considering the worsening economic outlook.
Oil dividends
Oil and gas shares have been among the best performers in 2022. BP shares are up 30% over the past 12 months, while Shell (LSE: SHEL) has climbed 40%.
We’ll have a Q3 update from Shell on 27 October. Oil is dropping a bit, to around $85 for a barrel of Brent Crude. But I still expect to see the cash flowing strongly.
Forecasts put this year’s dividend yield at 3.9%, which is not one of the biggest around. But it’s one of the few in the FTSE 100 that haven’t been boosted by falling share prices in 2022.
Analysts see the dividend holding steady over the next couple of years. But that depends a lot on where the oil price goes. Any further declines could put recent share price gains at risk.
Verdict
There are clearly risks with all of these, and they might not be my top picks in their individual industries. But they’re all in sectors that I think have solid long-term dividend potential.