Inflation is rising rapidly and affecting nearly every industry throughout Europe as supply chain issues and raw material prices start to hit companies’ costs. Consumer Price Index data for the UK (the standardised measure of consumer goods prices) rose to 7% annually for March. The cost of living has risen significantly whilst equity prices have fallen. The FTSE 100 is down by 0.19% year-to-date. Consequently, the vast majority of UK pensions and ISAs have lost value in real terms (accounting for inflation). When times are tough, traditional companies with robust business models tend to fair better than their growth counterparts. Therefore, in order to outperform inflation and a depressed market, I’m looking to consistent dividend stocks giving some cash back to shareholders.

A stable foundation

Despite how tight living costs get, people will always need shelter — it is a survival necessity. As a result of this, the property construction market tends to be relatively resilient is times of economic distress. However, I highly doubt everybody will be looking to splash on expensive new homes and lavish DIY projects in this moment of uncertainty. That is where Persimmon’s (LSE: PSN) market positioning may become a significant competitive advantage.

Persimmon is a property developer that primarily focuses on supplying housing at the lower end of the price spectrum. Demand within this segment of the construction market is extremely robust due to its priority over upper-end properties. In addition to this, with incomes falling, the addressable consumer market for Persimmon might actually rise as previously middle-income tenants look for cheaper homes.

Persimmon’s forecast dividend yield is currently 11.2%, with a 5.2% payment of 110p per share expected in June. Furthermore, as noted in its trading update released on 27 April, revenue is expected to grow by a comfortable 4-7% with no substantial impacts suffered from the crisis in Ukraine.

Consistency, consistency, and more consistency

When economic situations are very volatile and uncertain, reliability and stability are priceless. Taylor Wimpey (LSE: TW) has paid its dividend consistently for the past 11 years. Some of those years even included a special payment due to strong performance. Currently, its forecasted yield is sat at an impressive 7.8%.

Generally speaking, the business model that Taylor Wimpey utilises is very similar to that of Persimmon, disregarding a smaller set of operations in Spain. They both essentially share the affordable residential property construction market in the UK. The reason that I’m looking to buy in is largely due to the advantage of diversification in a risky market.

Taylor Wimpey has also forecasted strong full-year performance that is on track with targets. As well as its cash generation, the actual share price of Taylor Wimpey looks relatively cheap for the market and sectors it operates in. A forecasted price-to-earnings (P/E) ratio of six compared with a three-year average of 14 appears good value considering the promising trading update.

I’m going to just wait and read one more trading update reassuring my optimism about housebuilders before buying in. But if it turns out to be solid, I’m getting in before the market wakes up to this opportunity.

The post 2 FTSE 100 dividend stocks yielding 7% I’m looking at to aim for a million appeared first on The Twelfth Magpie.

More reading

• Down 65% with a 5.65% yield! Is this dividend share a once-in-a-decade buy? 
• This is the worst FTSE 100 share over 5 years. Should I sell it?
• Down 55% with an 11.75% yield – what on earth’s the matter with Taylor Wimpey shares? 
• Why is everyone buying Taylor Wimpey shares?
• Down 31% in 3 months with a 9.7% yield, are Taylor Wimpey shares too cheap to ignore?

Daniel Moore has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

An auction that I’m bidding on

As a relative newcomer to the FTSE 350, Auction Technology Group (LSE: ATG) hasn’t had the easiest inaugural term. It made its stock market debut in February 2021. Since then, it has proven to be a company that can either outperform or underperform significantly.

Auction Technology Group specialises in providing online auction facilities to a global audience in a variety of niches — for example, antiques, art and fashion, as well as industrial and commercial equipment. As you can imagine, Covid-19 really boosted turnover into overdrive as in-person events were significantly reduced.

Revenue grew by over 100% compared to approximately 10% the year prior, and results have been strong since. The main caveat was that despite rising sales, costs grew proportionately and they failed to turn a profit. This remains my primary concern, but forecasts predict positive net profit for 2022 and if management can deliver, I might just make a late bid to buy the shares.

Software and sustainability

Another technology company that caught my eye was Aveva Group (LSE: AVV). With sustainability a top priority for every firm looking to both please shareholders and boost long-term prospects, Aveva’s services certainly look optimal for improving efficiency. Oil giants such as BP will be required to improve their operating efficiency and optimise their flexibility when adapting to a world fuelled by alternative energy. Aveva helps them and its other clients do just that.

By providing innovative engineering software, Aveva can reduce system decision-making time across supply chains and improve functional performance. Teamed with revenue growth of 47.9% and a forecast price-to-earnings ratio of only 22.8, relative to its three-year average of 33, I’m giving this company a good look at over the next few months.

Cyber security

The Darktrace (LSE: DARK) share price has plummeted by 55% since its October 2021 highs, and the company now trades at a market capitalisation of only £3bn. As a slightly more risk-averse investor, I do find the valuation slightly intriguing. Despite the lack of earnings and perhaps expensive price of its shares, Darktrace possesses something that is relatively rare for UK-based investors: a chance to invest in a reasonably large firm at the absolute cutting edge of technological advancement.

Darktrace pioneered the integration of AI and cybersecurity, sustaining a competitive advantage over larger peers for quite some time. With renewed cyber security interest as a result of the invasion of Ukraine, I’m going to wait on the sidelines but look slightly closer for now.

Before investing in any of these companies I’m going to see if central banks can restrain inflationary pressures. If they do, I’m interested.

The post 3 of the best technology stocks to buy in April appeared first on The Twelfth Magpie.

More reading

• FTSE 250 stock CMC’s shares have rocketed 51%! What’s going on?
• Will I buy SpaceX at £100 a share in my SIPP?
• Aberdeen shares are back in the FTSE 100 — is this turnaround stock just getting started?
• Down 65% with a 5.65% yield! Is this dividend share a once-in-a-decade buy? 
• This is the worst FTSE 100 share over 5 years. Should I sell it?

Daniel Moore has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Success story

Prior to 2020, CMC had a very mediocre 2019. Turnover fell by 21.4% and pre-tax profit by 89.5% from £60.1m to just £6.3m. Things appeared to be on the decline for the business.

However, 2020 became, by a significant margin, their best year of trading to date. The combination of individuals’ cash sitting in essentially interest-free savings accounts, a lot of free time attributable to lockdowns and astonishing capital growth in technology companies fuelled a boom in retail trading globally. Pre-tax profit surged to £141.1m in the first half of its financial year to September 2020.

With skyrocketing fundamentals came incredible share price growth of more than 550% from April 2019 to April 2021. Things were certainly on the up. Consequently, the dividend paid to shareholders on 9 September 2021 of 21.43p per share was huge relative to the rest of the industry, at over 10%.

Growth becomes contraction

Due to the fact that CMC Market’s revenue is primarily derived from volatility within the financial markets, results fell slightly short in 2021, although they were still better than pre-pandemic levels.

The VIX (Volatility Index) cooled from a rating of 66 (very high) in March 2020 to just 20 at the beginning of 2021, indicating volume of trading within the financial markets was simmering down a notch compared with the pandemic-induced frenzy.

This direct correlation could be considered as an inherent risk of investing in a company like CMC, where returns will be influenced heavily by market conditions regardless of the firm’s individual successes. But in many ways, this can be said for the vast majority of listed organisations.

Looking to the future

Although CMC’s forecasted dividend payment has been reduced to just 3.50p, it has recently just launched a share buyback scheme of up to £30m. In addition to this the VIX index has risen over the past months to 32 due to the uncertainty regarding the global economic outcomes of Russia’s invasion of Ukraine. These events are unlikely to be a coincidence, and I suspect that CMC’s trading has been relatively strong as of late.

However, the retail investing landscape is not what it once was: inflation is biting the real disposable incomes of households that will surely be less willing to invest in a volatile market when they have large utility bills to pay.

For now, I’m going to sit on the fence regarding investment into CMC Markets, despite the lucrative operating margins and attractive dividend yields. I would think it wise to observe how the macroeconomic picture develops over the next month, particularly regarding the inflation metric determining real household income and just the general persistence of market volatility.

The post This FTSE 350 dividend stock is yielding 12%, but is it a buy? appeared first on The Twelfth Magpie.

More reading

• FTSE 250 stock CMC’s shares have rocketed 51%! What’s going on?
• CMC Markets: a FTSE dividend star worth considering for an ISA or SIPP?
• £1,000 buys 268 shares in this dirt-cheap dividend stock that’s on fire in 2026

Daniel Moore has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In the wake of the Russian invasion of Ukraine, national defence and security has become of utmost concern subsequent to a long period of neglection. Energy interdependence and cyber threats are of particular importance. A technology stock with good fundamentals, a diversified revenue model and significant exposure to the aforementioned sectors is NCC Group (LSE: NCC).

Energy and cyber security

NCC offers cyber solutions for potential risks relating to software and cloud computing, supply-chain risks and threat intelligence among many others. Its clientele includes Sennen, data operator for London Array (one of the world’s largest offshore windfarms), National Grid and NatWest. Considering energy security is now an extremely high priority for Western European nations, this is certainly a business that I would like to be in. Rishi Sunak’s Spring statement references a minimum increase of £1bn (3%) to defence spending this year and a focus on the mitigation of Russian exposure. I believe NCC is well positioned to gain more private and public business contracts should this be the case; however, there is a certain reliance on energy security being of huge importance in the future.

Consistency is key

Out of the entire FTSE 350 index, NCC has generated the most consecutive years of turnover growth at 17. Exacerbating the impressiveness of this statistic is the fact that NCC Group has the smallest market capitalisation out of the entirety of the constituents at just £581.8m. Even with macroeconomic periods of deterioration — such as 2008 and 2020 — and businesses being strapped for cash, NCC has still expanded operations, demonstrating that its services and products are of a high quality and are a necessity for corporate security.

The past performance is excellent; however, the market price of a security can be erased overnight if the future expectations are not robust. Unsurprisingly, NCC’s forecasts look brighter than ever with its annual turnover growth projected at 16% this year alongside cash flow growth of 23%. What makes the valuation even more appealing is the fact that NCC ranks first out of nine companies in the computer services subsector when analysing the companies’ PEG ratio, which is the price-to-earnings (P/E) ratio relative to earnings growth.

Directors want in

In financial markets, directors and executives of a company can sell shares for a variety of different reasons such as tax efficiency or additional income, but there tends to be only one incentive for them to buy shares in their company, and that is because they expect the price to rise meaningfully.

Back in January 2019, the directors at NCC bought approximately £185,000 of shares in the company at £1.30. Between then and September 2021, the share price rose 167%. Clearly, the directors know what they are doing regarding the performance of their own business.

Since then, the NCC share price has fallen by 43.4% with no tangible negative news or downturn in business. In October the directors executed over £40,000 in options and purchased over £50,000 in stock at £2.16 per share. Today’s price represents a 12% discount to that.

Assuming business carries on as normal with the rise in defence spending, NCC could have a great opportunity on its hands. Only time will tell if it can execute upon it. Personally, I’m holding off just for now to see how the situation in Ukraine develops and whether cyber and energy security remain topics of public interest.

The post A FTSE 350 technology stock that I think could soar in 2022! appeared first on The Twelfth Magpie.

More reading

• Analysts expect these growth stocks to soar 27% and 20% in value by next May!

Daniel Moore has no position in any of the shares mentioned. The Motley Fool UK has recommended NCC. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.