2 dividend stocks I’d buy in January

I reckon National Express Group (LSE: NEX) is a sage stock to buy in the months ahead, and preferably before the release of next trading numbers (full-year details are scheduled for March 1).

The travel giant is still making roaring progress at home and over the sea and this was highlighted in December’s cheery update in which it advised that it had “continued to see a good trading performance across all of our divisions during October and November,” and that it was “encouraged by strong early Christmas trading in both our UK and Spanish coach businesses, with advanced sales higher than last year.”

Not content to rest on its laurels, National Express continues to build its presence in foreign climes to lasso this strong demand. Last month it boosted its position in the US by buying a school bus and coach operator in Cincinnati, while closer to home it also purchased a Madrid-based bus operator.

On the move

National Express’s brilliant progress in its fastest-growing territories may grab the headlines (the firm saw revenue growth in the States rev to 13.7% during July-September). But the company’s resilience at home, in difficult market conditions, also deserves plenty of accolades.

So City analysts are expecting further sustained earnings growth, of 6% in 2017 and 9% next year. And as a consequence the coach and bus operator is also expected to keep dividends moving higher.

Last year’s 12.28p per share reward is anticipated to rise to 13.5p in the present period, resulting in a 3.6% yield. And the 14.8p per share dividend forecast for 2018 nudges the yield to 3.9%.

And these projections are also pretty well protected, as dividend coverage stands at 2.1 times through to the close of next year.

National Express has seen its share price surge in recent months, although it still changes hands on a dirt-cheap forward P/E ratio of 13 times. I reckon the FTSE 250 firm is a great pick for both growth and income chasers right now.

Build a fortune

Nexus Infrastructure (LSE: NEXS) is another London share expected to dole out chunky dividends in the near-term and later.

Supported by a predicted 18% earnings improvement, the company — which supplies essential infrastructure services to the domestic housebuilding and commercial sectors — is expected to pay a 7.6p per share dividend in the year to September 2018.

This would mark a significant upgrade from the 5.8p payment expected for the last fiscal year, and yields a mighty 3.6%.

And just like National Express, Nexus can also be picked up for next-to-nothing right now, the AIM firm sporting a prospective P/E multiple of 9.8 times and a corresponding PEG readout of 0.5.

Now I’m not going to suggest that all is rosy in the British construction segment as Brexit fears rattle building activity. But I am confident that Nexus’s core operations surrounding the bright housebuilding segment should provide scope for solid earnings growth.

Besides this, a bulky £202.7m order book as of September (up 25% year-on-year) should soothe any fears surrounding future revenues.

I reckon Nexus is another great ‘all-rounder’ that could receive fresh share price fuel when full-year results are released on January 9.