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2 last-minute dividend dynamos to add to your ISA

2 last-minute dividend dynamos to add to your ISA
Published by
Motley Fool

3m read

20 March 8.21am

Hargreaves Lansdown is not responsible for this article's content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest. Article originally published by Motley Fool.

The yawning gap between housing supply and homebuyer demand convinces me that housing industry giant Barratt Developments should remain an exceptional income stock long into the future.

Much has been made of the possible impact of Brexit on house-buyer appetite since June’s referendum, with many still predicting that fears of moderating economic growth would yank house prices sharply lower.

However, these predictions have not yet come true. One reason for this is that lending criteria from British banks has remained supportive enough to ensure demand continues to outstrip the number of properties coming onto the market, whether generated by new-build projects or listed from existing homeowners.

Barratt itself noted last month that sales of its own homesteads continue to leap higher. Total forward sales, including joint ventures, stood at a record £3.01bn as of February 19, the builder advised. And net private reservations per active outlet clocked in at 0.77 per week during July-September, up from 0.76 a year earlier.

Barratt Developments plc

Sell: 600.50 | Buy: 601.00 positive 11.00 (1.86%)
Graph

Prices delayed by at least 15 minutes.

The City certainly foresees no imminent collapse in the UK housing market, and thus expect earnings at Barratt to keep moving higher. Growth of 1% and 2% is forecast for the periods to June 2017 and 2018 respectively.

This is something of a comedown from the double-digit rises of recent years. Still, this is not expected to take the shine off Barratt’s reputation as a provider of market-beating dividends, with the company expected to pay dividends of 37.6p per share this year and 38.1p in fiscal 2018.

These figures yield 6.9% and 7%, obliterating the FTSE 100 forward average of 3.5%.

Tasty rewards

Pub operator Marston’s has also defied predictions of a sharp cool-down in revenues as Brexit becomes a reality.

Marstons plc

Sell: 108.40 | Buy: 108.60 positive 0.90 (0.84%)
Graph

Prices delayed by at least 15 minutes.

Instead, Britons continue to spend plenty on eating out and socialising, and latest data from the Office for National Statistics showed households spent £45 or more on restaurants and hotels per week during the 12 months to March 2016. This is the first time it had breached this level for five years.

And footfall at Marston’s continues to benefit from this trend. The company saw total like-for-like sales at its Destination and Premium sites rising 1.5% during the 16 weeks to January 21, with underlying Christmas sales rising for the fifth successive year in spite of tough comparatives.

So, supported by predictions of a modest 1% earnings uptick in the period to September 2017, City analysts expect it to raise the dividend to 7.5p per share, a projection that yields an excellent 5.6%.

And the good news does not stop there, an anticipated 7. 9p reward in fiscal 2018 driving the yield to a lip-smacking 5.9%.

As the pub expansion programme over at Marston’s clicks through the gears - the firm plans to 25 new pub-restaurants and lodges in 2017 alone, taking its total within a whisker of 1,600 - I expect dividends to get ever-chunkier in the years ahead.

This article was written by Royston Wild from The Motley Fool UK and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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  • 20 March 8.21am
  • 3m read

  • AAA

Article originally published by Motley Fool. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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