Bovis Homes Group

At the start of the year, I noted that many housebuilders were trading at rock bottom valuations while offering outsized yields. One was Bovis Homes Group (LSE: BVS), which was just starting to recover as sector sentiment picked up.

I wrote at the time that this was due to the “general feeling that the likelihood of a cliff-edge, no-deal Brexit is beginning to fade”. I was a bit presumptuous there, the Brexit cliff edge looked perilously close in October, before Boris Johnson surprised everyone by striking his revised deal with the EU.

What happens to the Bovis share price now very much depends on next week’s general election result. The housebuilding sector is particularly exposed to Brexit uncertainty, as we saw when it collapsed in June 2016.

It would be nice to sort out Brexit one way or another, so we focus on the fundamentals of companies like Bovis, because they look pretty solid, with low interest rates and the property shortage driving demand. September’s interims saw profits before tax up 20% to a record £72.4m, net cash climbed to £102.4m and the interim dividend rose 8% to 20.5p a share.

The forward yield is now a thumping 8.7%, and management is progressive, as we saw in September. The valuation still looks tempting at 11.1 times earnings. City analysts expect earnings to rise 8% next year, and another 9% in 2021.

The Bovis share price is up 22% since I tipped it, so I’ll call that a win (in the interests of honesty, housebuilder Persimmon, which I tipped in the same article, rose a less impressive 6.5%). If we manage to sort out Brexit, things could improve further. Or did I say that in January?

Dechra Pharmaceuticals

At the start of the year, international veterinary pharmaceutical operator Dechra Pharmaceuticals (LSE: DPH) was recovering from a setback, triggered by a management warning that a major US supplier was targeting its patch in the UK and mainland Europe.

The threat of increased competition hammered the share price, even as the £2.82bn company posted 21% earnings growth. I nonetheless backed Dechra to succeed, highlighting its regular double-digit earnings growth and progressive dividend policy, although I expressed concern at its high forecast valuation of 26.3 times earnings.

It is more even more expensive today, trading at 31.5 times forecast earnings. The main reason for that is a lickety-split performance, with the Dechra share price up 18% since I tipped it.

September’s preliminaries were promising, with revenue up 17.5% to £481.8m, underlying operating profit rising 27.3% to £127.4m, and a whacking 23.9% increase in the full-year dividend to 31.6p (although it still only yields 1.2%).

After three years of double-digit earnings growth (51%, 19%, 17%) Dechra seems to be heading for a slowdown, but next year’s forecast of 8% is hardly disastrous. I’m pleased I tipped it in January (I tipped Hikma Pharmaceuticals in the same article, which did even better, growing 21%). But given today’s lofty valuation, Dechra looks more like a hold than a buy today.

The post I tipped these 2 FTSE 250 stocks to outperform in 2019. Next year looks promising too appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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.

London-centric specialists like The Berkeley Group is a little less attractive right now because of the weaker property market in the capital versus the rest of the country, trouble that City analysts expect to create some earnings turbulence in the medium term.

But I’m convinced that the likes of Berkeley remain exceptional long-term bets in spite of this trouble — London has been a top global destination for centuries and is unlikely to lose its crown any time soon, partly due to the historic homes shortage that has long plagued the city.

A national treasure

But if you’re looking to avoid any sort of profits hiccups, and thus any disruption to possible dividend growth in the near term or beyond, then you might want to look at builders with a more diversified geographic footprint. Like Bovis Homes Group (LSE: BVS), for example.

Sales at the company continue to spike in spite of Brexit wreaking havoc in the UK. It doesn’t matter that existing homeowners are holding back on listing their properties until the outlook becomes clearer: a plethora of lip-smacking mortgage products, strong employment levels, and a structural lack of housing, means that the market has remained remarkably resilient.

And this was laid bare by fresh Halifax housing market data showing property prices up 5.2% in the three months to May, representing the highest rate of annual growth since January 2017.

The electric home price growth of yesteryear may be at an end, but broadly speaking, home values keep on rising. Which begs the question: if the market can remain upright at a time when economic and political uncertainty is at unprecedented levels (at least in peace time), then what exactly can blow it over?

This underlines why I believe Bovis is a safe pair of hands in which to invest.

10%+ dividend yields!

In this climate it’s not a surprise that Bovis tried to snap up the Linden Homes division of Galliford Try early last month, a move that would have bolstered its presence all over the UK still further. Okay, the proposal may have ultimately faltered, but given the robustness of the market and the vast amounts of cash the FTSE 250 firm chucks out, it’s a good bet to expect more developments on the M&A front sooner rather than later.

The broker community certainly expects Bovis to keep thriving in spite of Brexit uncertainty. In fact, they expect annual profits expansion at the builder to pick up from mid-single-digit percentages in 2019 to double-digits in 2020, projections that lay the groundwork for predictions of more dividend growth as well.

Current forecasts suggest that dividends of 102.2p per share are predicted for this year and 105.6p for 2020, up from 102p last year. And this means that dividends for this year and next sit at a show-stopping 10% and 10.4% respectively. If you’re seeking the guarantee of big dividends now and in the future I think it’s hard to look past Bovis. Therefore it’s a white-hot buy in my book.

The post Dividend alert! A 10%-yielding dividend stock I think is as ‘safe as houses’ appeared first on The Twelfth Magpie.

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• How could ‘Prime Minister’ Andy Burnham boost these FTSE 100 and FTSE 250 shares?
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• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Royston Wild 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.

Hochschild Mining (LSE: HOC) is one company that has seen its share price retreat in response to this fall, a drop that’s been driven primarily by a pick-up in the US dollar (a development which of course makes the greenback-denominated commodity more expensive to buy).

But as I’ve explained before, there remains plenty of geopolitical and macroeconomic uncertainty out there that could play havoc with risk appetite and supercharge gold demand again. It’s the reason why UBS for one is predicting bullion prices will charge through the $1,400 per ounce milestone within the next 12 months.

Current forecasts suggest Hochschild will deliver earnings rises of 63% and 36% in 2019 and 2020, respectively, figures which leave it dealing on a forward PEG reading of just 0.5 (comfortably below the accepted bargain watermark of 1). Such a low valuation makes the digger a brilliant buy today, and particularly given the prospect of a fresh metal price surge.

10%-plus dividend yields

A dirt-cheap price also makes Bovis Homes (LSE: BVS) a great buy today. Right now it carries a prospective P/E multiple below the widely-regarded bargain benchmark of 10 times, at 9.2 times.

The housebuilder has seen its share price retrace 16% from the 2019 peaks hit in early March, reflecting growing market fears over the Brexit process and how this will impact property prices in the near term and beyond. Yet all the evidence from Bovis and its peers suggest the market remains as robust as ever.

Just last week, chief executive of the FTSE  250 firm Greg Fitzgerald lauded “[the] strong period of trading” since the start of the year, a timeframe in which the average private sales rate per site boomed 17% year-on-year to 0.61 and the company continued to report a “strong forward sales position.”

It’s no wonder that City analysts expect the firm to keep increasing profits through the next couple of years at least, helped by Bovis’s drive to boost build rates and the steps it’s taking to reduce margins too.

A final sweetener. Right now the company sports gigantic dividend yields of 10.3% and 10.7% for 2019 and 2020, respectively.

Value + dividends

Bakkavor Group’s (LSE: BAKK) share price may have remained unmoved since I last covered it at the end of April, but trading at the firm has been solid enough despite the persistence of poor shopper confidence and inflationary stresses in the UK.

News last week that the fresh food producer’s trading has been in line with expectations since the start of the year may not be enough to merit fireworks. But it’s further sign the company is still showing green shoots of recovery.

City analysts still expect the business to recover from an earnings dip this year by bouncing back into growth in 2020, reflecting the huge investment Bakkavor’s making in bright international marketplaces (US and China) and the massive investment it’s making elsewhere to improve its food ranges. Just this month, it purchased Blueberry Foods to bolster its desserts portfolio.

As I type, Bakkavor trades on a forward P/E ratio of 8.9 times and carries big dividend yields of 4.6% for this year, and 5% for next year too. These factors make it worthy of serious attention, in my opinion.

The post Is now the time to buy these FTSE 250 stocks (like this 10%-plus yielder)? appeared first on The Twelfth Magpie.

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• Down 81% in 2 years, is this beaten-down FTSE 250 stock now in bargain territory?
• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Royston Wild 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.

I’ve long celebrated Polymetal International (LSE: POLY) as a great share to buy on the robust outlook for gold prices, a situation created by low interest rates and intense geopolitical and macroeconomic uncertainty.

There’s a growing pile of evidence that backs up these robust price forecasts for 2019 and beyond. Strong gold demand from institutional investors is something I’ve touched upon in depth before, but latest data from the World Gold Council (WGC) shows just how strong metal off-take from other sources is as well.

Gold demand bubbles higher

According to the organisation, central banks bought 145.5 tonnes of gold in the three months to March for the purposes of “diversification and a desire for safe, liquid assets.” This was also the highest level of first-quarter buying from such institutions for six years.

But demand for the metal as a pure rush-to-safety asset wasn’t the whole story behind strong gold demand in quarter one. Indeed, the WGC also noted that global jewellery sales rose in the period because of resplendent Indian buying, supported by a weaker rupee and the onset of the traditional wedding season. In fact, gold jewellery sales in the country were 5% higher year-on-year at 125.4 tonnes.

Today looks as good a time as any to get exposure to gold, then, although theoretically it’s always a good idea to have exposure to gold in your investment portfolio as a lifeboat in troubled times when your other holdings could take an almighty smack.

I would argue that the best way to go about this is by holding gold stocks that pay a dividend, rather than the physical metal itself which, well, doesn’t. And what a great company Polymetal is in this respect, the digger sporting giant yields of 5.4% and 5.8% for 2019 and 2020 respectively.

Throw a dirt-cheap valuation into the mix — the FTSE 250 firm trades on a P/E ratio of 9.3 times right now — and I reckon it’s a brilliant income share to load up on right now.

Yields north of 9%

Bovis Homes Group (LSE: BVS) is another big dividend payer I’ve tipped before, in this case on the back of strong homes demand from first-time buyers and a shocking shortage of affordable housing in the UK.

And fresh data from Nationwide this week has reinforced my bullish take on the business. According to the building society, mortgage demand from first-time buyers continued to climb in April, with loans creeping even closer towards levels seen just prior to the financial crisis a decade ago. 

It’s not a shock, then, that City analysts are expecting Bovis’s earnings, like those over at Polymetal, to keep growing through to the end of next year at least. Consequently dividends are expected to keep rising at the builder, too, resulting in monster yields of 9.3% for 2019 and 9.6% for next year.

I’d also be happy to hold this share indefinitely given the many years it will take the government to solve the homes supply problem. I reckon Bovis has all the tools to pay exceptional returns and, given that it trades on a low forward P/E multiple of 10.3 times right now, consider it to be one of the best bargains on the FTSE 250.  

The post Dividend alert! A 5% and a 9% yielder that I’d buy today and hold forever appeared first on The Twelfth Magpie.

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• Down 81% in 2 years, is this beaten-down FTSE 250 stock now in bargain territory?
• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Royston Wild 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.

It was simply too much bother.

Let it go

Building a 25% deposit, applying for a mortgage, searching for properties, paying for a survey and legal fees, and doing the place up always seemed such a faff. And then you had the effort of finding tenants, and making sure they paid the rent and didn’t trash your property.

I think it was the underlying fear of having a tenant from hell that ultimately deterred me. But as you can see, there are other challenges too.

It is so much easier to invest in stocks and shares. Especially since the Treasury’s combined tax attack, with that 3% stamp duty surcharge, reduced wear and tear allowances, and the gradual phasing out of higher rate tax relief. If you invest inside a Stocks and Shares ISA allowance, you don’t have to worry about any of that. All your gains are free of income tax and capital growth, for life.

Property investment

You can still get exposure to the domestic property market and a combination of income and capital growth, by investing in the shares of UK housebuilders such as FTSE 100-listed Barratt Developments (LSE: BDEV) and FTSE 250 stock Bovis Home Group (LSE: BVS).

You can buy and sell their shares in seconds, making them vastly easier to invest in than buy-to-let, although admittedly they are not without risk, as Brexit continues to cast a shadow over the housing market.

Brexit, bah!

Both builders are solid businesses and have seen their share prices rise by around 20% over the past six months. One reason for the recovery is that investors and house buyers appear to have decided they can’t spend the rest of their lives worrying about the next twists and turns in our EU exit, and have decided to carry on regardless.

The UK property market has been surprisingly resilient throughout all the wrangling, although there are signs London is finally feeling the impact with prices down 3.8% in the last year.

Bargain stocks

This uncertainty is reflected in the two companies’ valuations, as both are now available at a discount. Barratt currently trades at just 8.6 times forward earnings, while Bovis is only slightly more expensive at 9.1 times. This is well below the 15 times generally seen as fair value. The sector took the result of the EU referendum harder than most, but there has been no meltdown.

Barratt now offers a seriously generous income yield of 7.5%, covered 1.5 times by earnings. The company’s balance sheet boasts net cash of £387m and the payout looks solid for now. The Bovis yield is even more dizzying at a forecast 9.2%, although cover is thinner at 1.1. Net cash is around £127m. Both stocks look set to post modest but steady earnings growth over the next few years.

There are threats, naturally. House prices could fall, the Help to Buy scheme will be scaled back in 2021 so only first-time buyers will be eligible, and it will end altogether in 2023. I’d still buy these two stocks over a buy-to-let, though.

The post Why I’d buy these 2 high income stocks over a buy-to-let property appeared first on The Twelfth Magpie.

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• £1,000 buys 380 shares in this 5.4% yielding passive income stock

Harvey Jones 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.

The good news, though, is that this nosedive to three-month lows provides a great opportunity for dip buyers to nip in and grab a bargain — right now the FTSE 250 firm trades on a dirt-cheap forward P/E ratio of 12.4 times and it carries a gigantic 6.1% corresponding dividend yield too.

Look, the recruitment provider isn’t totally immune to the slowing German economy or tough construction markets in Australasia, and net fees growth dropped to 6% in the quarter ending March from 9% in the prior three months.

But there was still plenty to celebrate in the release last week. Net fee growth was still impressive considering the tough comparatives of a year earlier, and there was stunning progress in some of its other territories (including record quarterly results in eight of its markets).

A final shot: these Q3 results provided an extra nugget for income seekers to celebrate. Hays’ position as a cracking cash creator is well known and net cash swelled to £30m as of June, up from £5m a few months earlier and giving that little more beef to its progressive dividend policy.

Dividends still travelling higher

National  Express Group (LSE: NEX) is another dividend share I’ve long championed because of the booming profits it’s generating in foreign climes, progress which is due in no small part to its great track record of acquisitions.

So news that the transport operator was at it again this month by acquiring a majority stake in US-based employee shuttle company WeDriveU was fresh cause for celebration. The business serves some of Silicon Valley’s biggest companies and provides some excellent growth opportunities across the rest of North America.

City analysts certainly don’t expect National Express’s recent history of earnings growth to cease any time soon, and so dividends are anticipated to continue storming higher as well. For 2019, this results in a chunky 4% yield.

9% dividend yields!

If you’re looking for truly heart-stopping yields, though, you might want to check out Bovis Homes Group (LSE: BVS).

The size of the UK housing market’s supply and demand gap means that sales of new-builds should keep on tearing higher long into the future. The construction colossus is taking steps to boost its position in the social housing segment too, and this month entered a joint venture with Riverside to build a massive new development near Wellingborough, Northamptonshire, which will consist of more than 3,600 homes.

A bright profits outlook and the ability to also throw out shedloads of cash means that the homebuilder is dedicated to continuing to supply shareholders with special dividends, and this means that for 2019 the yield sits at a gargantuan 9.1%. At these levels I reckon Bovis is hard to overlook.

The post 3 FTSE 250 dividend kings I’d buy today and never sell appeared first on The Twelfth Magpie.

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• How could ‘Prime Minister’ Andy Burnham boost these FTSE 100 and FTSE 250 shares?
• Down 81% in 2 years, is this beaten-down FTSE 250 stock now in bargain territory?
• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Royston Wild 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.

Risky business

Investing in the retail sector is incredibly risky business at the moment, and with this in mind I think that Card Factory (LSE: CARD) is a share best avoided at the current time.

Latest financials showed that not even budget operators like this firm, which sells greetings cards, gifts and party-related paraphernalia, are immune to the mounting pressure on consumer spending power. Like-for-like sales at the business dropped 0.1% in the 12 months to January, swinging from the 2.9% rise printed in the previous year, and as a consequence, underlying pre-tax profit reversed 7.3% to £74.6m.

But Card Factory’s sales were also struck by “poor high street footfall,” a phenomenon which threatens to worsen as shoppers continue to swap bricks and mortar stores for shopping online.

Dividends in trouble?

In a reflection of these tough conditions, the FTSE 250 retailer elected to keep the full-year dividend on hold at 9.3p per share for fiscal 2019. And while it supplemented this reward with another special dividend, the tasty 5p per share bonus for last year shrank markedly from the 15p payout delivered in the prior period.

So what are City analysts forecasting for the current year? They’re anticipating another special dividend, albeit at a reduced rate again, and as such, a 13.8p per share total dividend is tipped. Consequently investors can dial into a chunky 7.1% yield.

In my opinion, though, this prediction looks a bit too good to be true — it is covered just 1.3 times by estimated earnings, some way below the widely-regarded security watermark of 2 times.

While Card Factory’s low net debt-to-underlying EBITDA remains low at around 1.6 times, and could give it the flexibility to keep paying special dividends this year, signs that the business faces prolonged strain at the checkout beyond the medium term could well cause it to wind in its ultra-generous payout policy sooner rather than later. And the stream of scary retail surveys in recent months makes this a very real possibility, in my opinion.

This 9%-yielder is a better selection

Rather than splashing the cash on that risk-heavy stock, I’d prefer to buy into Bovis Homes Group (LSE: BVS).

Dividend coverage for 2019 sits at 1.1 times, but in all other respects it appears to be a superior dividend stock to Card Factory. Like its FTSE 250 compatriot, it is also minded to dole out special payments, and right now City analysts are predicting a 102.2p per share reward. This projection yields a stonking 9.1%, soaring above that of the bedraggled retailer.

Bovis Homes certainly appears to have the financial strength to meet this estimate, the housebuilder having £126.8m of net cash on the books. And the condition of the housing market, with the chronic homes shortage that will take many years to solve, suggests that profits should keep rising in the near term and beyond, providing the base for those dividends to keep rising long into the future too. If you’re looking to load up on white-hot income shares I believe that this construction star is worthy of some serious attention.

The post Dividend investing! Should I buy or avoid these 7% and 9% dividend yields? appeared first on The Twelfth Magpie.

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• What could an Andy Burnham government mean for these FTSE 250 stocks?
• How could ‘Prime Minister’ Andy Burnham boost these FTSE 100 and FTSE 250 shares?
• Down 81% in 2 years, is this beaten-down FTSE 250 stock now in bargain territory?
• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of Card Factory. 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.

I can see better opportunities elsewhere in the FTSE 250. Today I want to look at another 9% dividend stock that I rate much more highly.

Bovis is bouncing back

FTSE 250 housebuilder Bovis Homes Group (LSE: BVS) has delivered a textbook recovery over the last couple of years. Since taking charge in April 2017, chief executive Greg Fitzgerald has lifted pre-tax profit from £114m to £168m.

Mr Fitzgerald has also fixed the company’s reputation for sloppy finishing. Bovis’s HBF customer satisfaction rating has risen from two stars in 2017 to four stars for 2018. Despite this investment in quality, operating profit margins have risen from 12.5% in 2017 to 16.4% in 2018.

Further gains are expected in 2019, and Mr Fitzgerald expects the group’s strong cash generation to continue. For shareholders, this is expected to result in a total dividend of 102.2p per share for 2019, giving a yield of 9.5%. A similar payout is expected in 2020.

Too good to last?

I don’t expect Bovis to be able to sustain such generous special dividends forever. But with earnings expected to rise by 6% this year and by 10% in 2020, I expect the dividend yield to remain above 5% unless market conditions get much worse.

Housing always carries some cyclical risk. But I see Bovis as attractively priced and operating well. I’d buy.

Profit from the silver pound?

Building retirement homes for wealthy retirees should be a profitable business. At least, that’s probably what investors thought when they bought shares in McCarthy & Stone (LSE: MCS) shortly after its 2015 flotation.

Unfortunately, things haven’t turned out that way. The shares now trade about 40% below their IPO price and the dividend hasn’t risen since 2017. Worse still, figures released today show that the group’s adjusted operating profit margin of 7.6% is less than half the 16% figure being achieved by Bovis Homes.

Are things getting better?

Today’s half-year results are a mixed bag, in my view.

The good news is that completions rose by 11% to 845 units during the first half of the year, while the average selling price climbed 7% to £319k. These gains lifted half-year revenue by 17% to £280.5m and boosted underlying operating profit from £14.5m to £21.3m.

On the other hand, the group admits that it’s having to use “discounts and incentives, particularly part-exchange”, due to challenging conditions in the wider housing market.

What could go wrong?

On average, the company says that £27.2m was tied up in part-exchange properties during the first half of the year. This figure is expected to rise to 10% of net assets — or about £74m — during the second half, according to today’s results.

In my view, that’s too much. The figure for Bovis was just 1.6% of net assets at the end of 2018. Although McCarthy shares now trade in line with their tangible net asset value of 126p, I’d want a discount before I’d take on this level of risk.

With the stock yielding just 4.2% and profit margins under pressure, I see better value elsewhere. I’d avoid.

The post Forget the Royal Mail share price. I’d buy this FTSE 250 9% yielder today appeared first on The Twelfth Magpie.

More reading

• Could Andy Burnham boost this beaten-up FTSE 250 stock that’s crashed 80% in 20 months?
• What could an Andy Burnham government mean for these FTSE 250 stocks?
• How could ‘Prime Minister’ Andy Burnham boost these FTSE 100 and FTSE 250 shares?
• Down 81% in 2 years, is this beaten-down FTSE 250 stock now in bargain territory?
• Having fallen up to 60.9%! Are these dirt cheap bargain UK shares to buy?

Roland Head owns shares of Bovis Homes Group and Royal Mail. 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.

The ubiquity of streaming services like Netflix and Amazon Prime isn’t taking bites out of cinema audiences as was once predicted. It’s not that take-up of these services isn’t still growing at a rate of knots; it’s that the experience of watching movies at the local picturehouse is a completely unique, and ultimately timeless, one. This is evident in recent Comscore data which showed takings at the global box office soared to a record $41.7bn in 2018.

Film star

As the world’s second-largest cinema chain, Cineworld is well placed to capture brilliant sales growth now and in the years ahead, I believe. And what’s more, the FTSE 250 firm is expanding rapidly to meet the soaring demand of film lovers in all its territories — in 2018 alone it opened 13 new cinemas, six apiece in the US and UK, and one in Romania.

City brokers believe conditions are ripe for the cinema chain to keep delivering annual earnings increases for the foreseeable future, and I can’t disagree, particularly as crowd-pleasing blockbuster movies, the lifeblood of Cineworld’s packed foyers, are growing more and more popular.

It may interest you to know that Disney saw films released under its own name, as well as those of its other production arms like Marvel Studios and LucasFilm, grossing an eye-popping $7.33bn around the world in 2018. This is only a fraction off the all-time high of $7.61bn that the so-called House of Mouse printed two years earlier.

One more dividend winner

Despite its bright long-term growth outlook, however, Cineworld can be picked up for almost next to nothing right now, as illustrated by its forward P/E multiple of just 11.6 times. Throw a jumbo dividend yield of 4.6% into the equation and I reckon it’s a brilliant stock to buy and own today.

Whilst you’re here, I’d like to point out Bovis Homes Group (LSE: BVS), another dividend favourite from the FTSE 250 I believe is trading far too cheaply at current prices. The housebuilder carries a prospective P/E ratio of 10.5 times, but its low valuation is not the real showstopper: that accolade goes to the forward yield of 9.1% that it currently offers up.

Quite simply, I think Bovis is too good to pass up now, and I’d happily snap it up had I not already got significant exposure to the housing sector through Barratt and Taylor Wimpey. Bovis’s pre-tax profits of £168.1m in 2018 sailed past expectations and were up 47.4% year-on-year. Because of the gigantic — and still growing — homes shortage in the UK, I am confident that profits can continue heading skywards for many years into the future.

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A forward P/E ratio below the bargain-basement threshold of 10 times and a staggering prospective dividend yield north of 6%? For glass-half-full individuals who are not so fearful over the consequences of Brexit in the near term and beyond, there’s plenty to get your teeth into.

I am concerned about the fate of Lloyds and UK GDP data released today showed why why, the Office for National Statistics reporting a 1.4% rise in economic output in 2018 — the worst result for six years — and output in December actually falling 0.4%. For a bank whose bottom line is chiefly reliant upon a strong British economy, signs of such negative momentum in the run-up to Brexit makes for yet more chilling reading.

Build a fortune

So I would argue: why take a chance with Lloyds when you can get great value as well as bigger dividend yields with Bovis Homes Group (LSE: BVS)?

On the face of it, this FTSE 250 firm faces the same problems as Lloyds, i.e. UK-focused operations and thus a dependence upon a resilient economy to drive profits. However, I am confident that the country’s massive homes shortfall should still help Bovis’s profits to thrive, even if tough economic conditions have brought the curtain down on the stratospheric home price growth of yesteryear.

The positive trading updates that continue to pour in from the housebuilding sector pay testament to this. Bovis itself declared in January that it enjoyed “[a] record year of profits slightly ahead of market consensus” and that signs so far in 2019 are “encouraging.” What’s more, it said that forward sales remained at a robust 2,681 units last year versus 2,656 in the prior period, and that in 2018 it witnessed “a significant step-up in operating margin.” It is a particularly encouraging development that should support profits even in the event of a slowdown in new-build demand.

All of this results in City analysts predicting another year of profits growth in 2019, this time to the tune of 4%. Not spectacular, but remember this: that consensus reading results in a rock-bottom forward P/E multiple of 9.9 times. It means that Bovis is expected to keep doling out the special dividends as well, creating a monster dividend yield of 9.8%, which blows Lloyds’s 2019 reading clean out of the water

Salute this dividend star

One doesn’t have to look outside the FTSE 100 to find bigger yielders than Lloyds, though. Admiral Group (LSE: ADM) sports a forward yield of 6.5% and, like the banking giant, is also pretty reasonably priced thanks, as indicated by its prospective P/E rating of 15.4 times.

I’d prefer to buy the car insurance colossus, though. It’s expected to report a 7% profits rise in 2019 compared with Lloyds’ predictions of no growth at all. It’s not difficult to imagine earnings at Admiral continuing to soar either as customer numbers across its product lines boom (up 17% in the first half of 2018 to 5.1m), thanks in no small part to its ability to grab market share. With its operations in mainland Europe also going from strength to strength, I fully expect the business to keep delivering knockout shareholder returns well beyond the near term.

The post 2 top dividend stocks that pay you more than Lloyds Banking Group does appeared first on The Twelfth Magpie.

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Royston Wild 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.