The big question is whether you are taking on an acceptable level of risk, given the potential returns. I believe FTSE 100-listed Barratt Developments (LSE: BDEV) is tempting at today’s low price despite housing market worries. Another dirt-cheap housebuilder, FTSE 250-listed Crest Nicholson Holdings (LSE: CRST), looks somewhat riskier.

Barratt and Crest Nicholson are both falling today, following new Bank of England figures showing mortgage approvals have tumbled to a fresh low.

Analysts expected around 25,000 mortgage approvals for house purchases in May. Instead, there were just 9,273. That is a dreadful figure, if you are in the business of building new homes. No wonder these housebuilders have dirt-cheap share prices today.

However, I do not think it reflects the long-term story. Ultimately, we live on a crowded island, and demand for property dramatically outweighs supply. The housing market was bound to struggle in the wake of the pandemic, and that is exactly what we are seeing today.

Dirt-cheap FTSE share opportunities

You still cannot rule out a house price crash as people lose their jobs when furlough ends. Almost two million have taken mortgage payment holidays, showing how many are in difficulty. You should only buy today if you plan to hold for the long term. Minimum five years. Ideally, 10 or longer.

The Barratt share price trades at just 6.81 times earnings, while Crest Nicholson is yours for a dirt-cheap valuation of 5.64 times earnings.

Of the two, I would favour FTSE 100 stalwart Barratt. Balance sheet strength is vital, and the £5bn group boasts around £430m in cash. It can also call on £700m worth of undrawn credit. That should keep operations ticking over until people start buying houses in greater numbers.

Crest Nicholson should also have the liquidity to survive challenging market conditions. This includes a £250m revolving credit facility expiring June 2024, £100m of senior loan notes, and a further £300m through the CCFF commercial paper programme, undrawn at present.

Investors are wary, though. Over the last month, Crest Nicholson is down 18%, while the Barratt share price has held steady.

Always understand the risks

Last week, Crest Nicholson reported that revenues slid 52.2% to £240m, in the six months to 30 April. Adjusted pre-tax profit fell 93% to £4.5m. Home completions fell by a third and the average open market selling price was down 16.7% to £344,000.

Barratt and Crest Nicholson both dropped their dividends in March, to preserve cash and protect balance sheets. That also explains why they are dirt-cheap FTSE bargains.

I think this is a good time for brave investors to take a few risks, provided they plan to buy and hold for the long-term. I’m talking five years or longer. On those terms, Barrett offers an acceptable level of risk. Crest Nicholson looks a bit more edgy, but some of you might think it is a risk worth taking.

The post Stock market crash bargain alert! I’d buy these dirt-cheap FTSE 100 shares ahead of the recovery 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 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.

But retail isn’t dead, it’s just, well, if not resting, going through a transformation. And what’s going to emerge will surely be very different from the old “traipsing round the shops” model of old.

I reckon N Brown, owner of a number of brands including JD Williams, Jacamo and Simply Be which cater for plus-size customers, is ahead of the curve (pun intended).

The past few years have seen the company ditch its old mail-order business and move entirely to online shopping. Judging by the success of companies like Boohoo.com and the struggles faced by the high-street stores of Marks & Spencer, that’s surely the way to go.

N Brown does actually own 20 bricks-&-mortar stores, but in its last full year they only contributed 2% of group revenue (and lost money). The company is currently considering closing these stores — an obvious good move, in my view.

I reckon weak sentiment has pushed the shares too far down now, and with earnings expected to start rising slowly again, we’re looking at P/E multiples of under eight. Oh, and forecast dividend yields of almost 8% too.

The dividend might perhaps come under pressure, but analysts are actually predicting a modest rise by 2020. I think N Brown is a risk worth taking.

Safe as the proverbial?

Confidence in housebuilders is also starting to falter, though few have seen their shares suffer as badly as Crest Nicholson Holdings (LSE: CRST). From a high of 638p in May 2017, we’ve seen a 35% fall.

That’s partly due to fears that the housing market is slowing down, though I can only see that as a relatively short-term thing — surely an overall flat market for even 20 years would still see housebuilders making attractive profits.

The effect was compounded by first-half results, which showed a 2% decline in earnings per share, and that’s got to have driven away lots of growth investors now that the rampant recovery phase of the industry is coming to an end.

Reality

But here’s the thing… Housebuilders do not need rising house prices in order to make profits. When house prices cool, land prices also cool, and profit margins don’t need to suffer too much.

In fact, that was behind my bullishness on housebuilders back in the early 2000s. House prices were stagnating, and investors deserted housebuilders in their masses. But those canny companies had plenty of cash and were buying up building land at knock-down prices — and for me, that was a sure-fire sign of the boom that was to come.

Let’s get back to Crest Nicholson and its share price valuation. EPS is expected to drop 2% this year, but pick up 8% in 2019.  And dividends are expected to yield around the 8% level this year and next, which is a yield almost to die for. The shares are on a forward P/E of an incomprehensibly low 6.5.

The housebuilding sector is volatile, but I see that as irrationally down to short-term investors. Those of us who know better can do well from our long-term view.

The post 2 FTSE 250 7%+ high yielders that could help you retire rich appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended boohoo.com. 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.

And with the FTSE 250 constructor, like many of its London-quoted peers, having seen its share price dive in 2018 (and touch 16-month troughs just this week) I reckon now is a great time for dip buyers to grab a slice of the action.

Yields rising to 9%

Share pickers have been put off the housebuilders of late after a slew of industry data underlined the moderation in home price growth that really kicked off last year.

Declining property values are no great surprise given the chronic political and economic uncertainty that has put the rampant homes demand of yesteryear to the sword. But on the brighter side, homes demand remains broadly stable and the Bank of England announced last month that mortgage approvals recovered from the three-year troughs plumbed at the turn of the year to record the biggest month-on-month increase since April 2015 in February.

Ultra-attractive interest rates and the government’s Help To Buy scheme are helping to keep homes demand afloat, if nothing else. For the likes of Crest Nicholson, meanwhile, a lack of available properties entering the market is propelling demand for new-build homes ever higher and keeping revenues on a skywards trajectory.

City analysts are predicting that earnings at Crest Nicholson will continue to grow at a much shallower rate compared to the double-digit rises seen before the EU Referendum as slower demand and heavier costs across the construction industry weigh. Advances of 6% and 13% are forecast for the years to October 2018 and 2019 respectively.

Still, these robust figures are enough to underpin predictions of further dividend growth. And so the payout of 33p per share of fiscal 2017 is expected to rise to 35.7p this year and to 40.3p in the following period, resulting in large yields of 8% and 8.9% respectively.

And a mega-low forward P/E ratio of 6 times seals Crest Nicholson’s appealing investment case, in my opinion.

More gigantic yields

I feel those on the lookout for dirt-cheap dividend stocks also need to give Headlam Group (LSE: HEAD) a close look today.

Supported by an expected 6% earnings rise in 2018, the floor coverings giant is expected to raise the dividend to 27.1p per share from 24.8p last year, thus creating a mammoth 6.4% yield.

Moreover, the 4% profits advance forecast for next year leads to predictions of a 28.4p dividend, which in turn nudges the yield to 6.7%.

Despite its bright earnings outlook however, Headlam can be picked up on a forward P/E ratio of just 9.6 times. This is much too cheap given the waves it continues to make across Europe.

The small-cap saw like-for-like revenues in Europe rise 4.2% last year, speeding up from the 3.1% advance reported in 2016. And Headlam is still active on the M&A stage to continue grabbing custom on foreign shores, the business having made three acquisitions last year and more recently Netherlands-based Dersimo earlier in March. There’s plenty for growth and income seekers to get stuck into here.

The post One 8% yield and one 6% yield I’d buy and hold forever 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.

I am a shareholder in two of the UK’s largest housebuilders, my stakes in Barratt Developments and Taylor Wimpey underlining my faith in the strength of the housing market.

I last snapped up shares in the businesses almost exactly a year after 2016’s historic Brexit vote as predictions of a painful collapse in British property prices failed to materialise. I was always sceptical over such a scenario actually occurring given the scale of the supply/demand imbalance in the homes market, but the robustness of market conditions (as illustrated by the relentless flow of good trading updates from across the industry) did take me a little by surprise.

In this environment Crest Nicholson’s (LSE: CRST) share price advanced 20% during the course of 2017, although the northwards path was far from smooth. Despite these heady gains, I believe the Surrey business remains an overlooked gem that should provide brilliant returns now and in the years to come.

Sales surging

Affirming the bright outlook for Crest Nicholson and its peers, chief executive Stephen Stone commented back in November that “the new-build housing market continues to be robust and Crest Nicholson remains well positioned to grow volumes and deliver the homes that the UK needs.”

Stone noted that the business “carries positive momentum into 2018,” the FTSE 250 firm recording a 13.6% uptick in forward sales as of the end of October, at £391.4m, with favourable lending conditions helping to drive demand for the company’s new-builds.

So City analysts are predicting that earnings at Crest Nicholson will pick up steam in the years ahead. A projected 5% rise in the year to October 2017 is expected to rev to 11% and 15% in fiscal 2018 and 2019 respectively. Therefore dividends are anticipated to keep heading through the roof as well.

The Square Mile says that the estimated 33.2p per share dividend for last year will move to 36.7p in fiscal 2018 and to 42.2p next year, meaning that the business carries mighty yields of 7.1% and 8.1% for these respective periods.

Given its bright earnings and dividend prospects, not to mention its eye-popping value — the construction colossus sports a forward P/E multiple of just 7.2 times — I reckon Crest Nicholson is a terrific buy today.

Dividends rising again

Begbies Traynor Group (LSE: BEG) is another share that could thrive in 2018 and beyond as the impact of a slowing domestic economy could potentially drive plenty of businesses into insolvency.

While this is not a cheery thought, it does at least provide share pickers with a compelling investment opportunity. Indeed, earnings at the AIM-listed business are expected to jump 10% and 11% in the years to April 2018 and 2019 respectively in this environment.

These rosy predictions are expected to drive Begbies Traynor’s dividends skywards again as well, following many years of payout stagnation. The enduring 2.2p per share reward is predicted to finally rise to 2.4p this year, resulting in a chunky 3.3% yield. And this moves to 3.5% for next year thanks to a predicted 2.5p payment.

The business hiked the interim dividend by 17% last month in the first rise since 2011 on the back of its solid profit outlook and impressive cash generation. In my opinion Begbies Traynor is an interesting share selection worthy of attention despite its  slightly toppy forward P/E ratio of 19.9 times.

The post 2 monster dividend stocks I’d buy for 2018 appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Royston Wild owns shares in Barratt Developments and Taylor Wimpey. 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.

So far, the City’s analysts have not lowered their consensus forecast for the dividend, and if the mooted payments of more than 31.5p pencilled in for this year and next actually come to pass, we’ll be looking at yields of around 6.6% on the current 471p share price.

The 27% crash in the share price since 20 September has also dropped Capita’s prospective P/E multiples for the next two years to under 10 — and if the market has over-reacted to the firm’s troubles, then the shares could well be oversold and good value now.

More bad news to come?

I’m tempted by that thought myself, but I’m held back by my recollection of thinking something similar about Carillion after its big shock in July, only to see yet another profit warning sending the shares plunging further this month.

But back to that dividend. Part of Capita’s recovery strategy, necessitated by a big fall-off in significant contract wins and a drop in its bid pipeline, is to engage in a cost-cutting programme to try to support profits. And a company doing that, to me, should not be paying out high dividends.

I think those who believe this is just a very short blip and that recovery will be rapid could be disappointed, and I really can see a high chance of a dividend cut.

Bigger and more reliable

I’m more firmly drawn to a dividend yield that is both bigger than Capita’s and, in my opinion, a safer bet. I reckon I’m seeing that from Crest Nicholson Holdings (LSE: CRST) with its currently forecast yield of 7% for the year to October 2018, and what I see as a strong future for the UK’s housing sector.

I actually think the entire housebuilding sector is paying very attractive dividends which I think will be sustainable in the long term, but Crest Nicholson’s has been one of the most stunningly progressive of the past few years.

In 2013, the company paid out 6.5p per share, more than doubling that the next year to 14.3p, and then building it as high as 27.6p in 2016 (and that was covered 2.25 times by earnings). Two more years of predicted rises would take the annual payment to around 37.2p by 2018, for a 5.7-fold multiplication in just five years.

Growth too

The share price has almost doubled over the same period, to 509p. On top of that obvious benefit, what it also means is that if you’d bought shares five years ago at around 255p, you’d be set to enjoy an effective yield on your purchase price of nearly 15% in 2018 if forecasts are accurate.

The company has already committed to 2 times cover for the 2017 year just ended, though we are seeing a reduction in cover — in 2015 it came in at 2.5 times. The future rate of dividend growth has to fall off as the firm reaches a sustainable cover level, but I’d be happy for it to just keep ahead of inflation over the long term — and I can see it remaining significantly better than that for some time yet.

The post Why I’d buy this 7% dividend yield instead of Capita plc appeared first on The Twelfth Magpie.

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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
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Alan Oscroft 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.

VP (LSE: VP) extended its recent upward charge on Tuesday thanks to the release of terrific first-half trading numbers. The small-cap was last up 4% on the day, meaning that its market value has swelled 17% during the past fortnight alone.

VP, which provides a variety of rental equipment in the UK and abroad, advised that revenues charged 12% higher between April and September, to £136m. This saw profit before tax and amortisation improve 13% year-on-year, to £21.2m.

While the Brexit question continues to hang heavily on the construction sector, the Harrogate-based company has managed to keep on delivering brilliant sales growth.  Indeed, chairman Jeremy Pilkington commented today: “The UK market remains strong, and whilst there is some uncertainty around the implications that Brexit will have on the UK, the day-to-day demand continues to be highly positive.”

Meanwhile, rising business at VP’s overseas operations are helping to soothe the fears surrounding Britain’s EU withdrawal, Pilkington adding: “There is also an improving trend for our international division in the second half of the year.”

Dividends jump again

The bright first-half result prompted VP to hike the interim dividend 13% to 6.8p per share, and this bodes well for broker projections of electric dividend growth this year and next. The full-year payment of 22p per share in the year to March 2017 is expected to rise to 24.7p this year and 27.8p in the next period, meaning it sports decent yields of 2.7% and 3.1% for these years.

VP has a proud record of delivering hot earnings growth and City analysts do not expect this trend to cease just yet. A 12% advance is expected this year, and profits growth is predicted to speed up in fiscal 2019 — a 16% rise is predicted.

And these forecasts make the company brilliant value. Not only does a forward P/E ratio of 11.6  times clock in well below the widely-accepted value watermark of 15 times, but a corresponding PEG readout of 1 confirm’s VPs’ position as bona-fide bargain.

Build a fortune

The bright long-term outlook for Britain’s homebuilders convinces me that Crest Nicholson (LSE: CRST) is another undervalued stock that could make you rich.

Investors will be keenly looking for clues for a boost to UK housebuilding in Wednesday’s budget, particularly after communities secretary Sajid David fired the gun last month by proclaiming that Britain needs to build around 300,000 new houses every year to meet surging demand.

Regardless of what Chancellor Hammond decides to pull out of his red box tomorrow, I am convinced that the many regulatory, financial and practical obstacles hampering any ambitious building drive mean that the likes of Crest Nicholson should continue to reap the benefits of high property values and thus deliver brilliant profits growth for many years yet.

City analysts are expecting an earnings rise of 11% in the year to October 2018 alone, a figure that leaves the business dealing on a bargain-basement forward P/E ratio of 7.8 times.

What’s more, Crest Nicholson is a particularly-enticing pick for those on the lookout for barnstorming dividend yields. A projected reward of 33.3p per share for fiscal 2017 is anticipated to jump to 37.2p in the current year, resulting in a mountainous yield of 7.2%.

The post 2 growth and income bargains that could help you retire with a million appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

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.

There are many different ways to invest in the property sector, but developers such as Crest Nicholson (LSE: CRST) seem to offer the best returns.

Profits surging

Over the past four years, Crest’s profits have ballooned as the company has reaped the rewards of rising home prices. For the fiscal year ending 31 October 2013, the company reported revenues of £525m and a pre-tax profit of £81m. For the fiscal year ending 31 October, analysts have pencilled-in a pre-tax profit for the group of £213m on revenues of just under £1.1bn.

For four years, the company has returned a significant amount of its profits to shareholders every year, after reinvesting in the new development opportunities. Since going public at the beginning of 2013, Crest has returned 68.1p to investors via dividends (102p if you count fiscal 2017’s distribution). This works out at about 26% of the company’s initial IPO price (or 38% if you count the 2017 payout). As long as the UK housing market remains buoyant, analysts expect this trend to continue.

Following an estimated dividend yield of 6.3% for fiscal 2017, analysts have pencilled-in a yield of 7.1% for 2018 off the back of a 12% increase in the payout. At the time of writing this hefty yield also looks cheap as shares in the developer currently trade at a forward P/E of 8.1, falling to 7.3 for 2018.

8% yield

Galliford Try (LSE: GFRD) is another super-cheap property income champion. Like Crest, over the past five years its profits and revenues have risen sharply with pre-tax profits rising from £63m to £135m between fiscal year-end 30 June 2012 and 30 June 2016. And once again like Crest, the company has returned a huge amount of its income to shareholders during this period. Dividends paid out amount to 270p since 2012, equating to just under 60% of earnings per share over the same period.

As profits continue to roll in, analysts believe the company will continue on its income course. A dividend yield of 8.1% is expected for 2017 followed by 8.6% for 2018. Next year, City analysts expect the company’s earnings per share to hit 169p, indicating that the shares currently trade at a forward P/E of 6.9, which is astoundingly cheap.

Industry troubles?

Of course, the success of these two developers depends on the state of the UK housing market. If home prices fall significantly, profits will take a hit and dividend payouts may be lower than expected. However, both developers have relatively strong balance sheets and are unlikely to go under if the market slows.

So, it’s certainly worth keeping an eye on these income champions.

The post Two 6%+ dividends currently on my watchlist appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Rupert Hargreaves has no position in any 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.

Solid housing

No search for bargain dividends would be complete without a housebuilding share, and I’m looking at Crest Nicholson Holdings (LSE: CRST). Brexit fears have gripped the whole sector, but I see that as seriously overdone at a time when we’re reminded almost daily of the housing shortage the country faces.

Crest Nicholson completed 5% more homes in 2016, hiking pre-tax profit by 27%. The firm moved into a net cash position and lifted its dividend by 40% to 27.6p, and told us it’s “on target to deliver £1.4bn sales and 4,000 homes by 2019“.

With, in the words of chief executive Stephen Stone, “strong demand for new homes, a benign land market and government policies to improve access to housing,” I don’t see any real risk to the company’s dividend prospects over the next few years.

With the shares down at 551p and on a forward P/E of only 8.2, locking in predicted dividend yields of 6.4% and 7.1% for this year and next could be a very smart move.

Retail recovery?

Shares in direct home shopping retailer N Brown Group (LSE: BWNG) have been through a torrid few years, and with them depressed as low as 205p we’re looking at forward P/E multiples of only around nine.

The dividend is expected to fall a little for the year just ended, but it should still yield around 6%. And if the mooted return to modest earnings growth comes off in 2019, the City suggests it will rise as high as 6.8%. Cover by earnings looks reasonable at around 1.times, so is there any reason for optimism?

Full-year results to February 2017 are due on 27 April, and the firm’s recent Q3 update suggested its “strategic transformation” is on track. Overall revenue was up 4.1% with “77% of new customer demand generated online,” and the firm saw its Power Brands doing well and enjoying a good Christmas.

Although the company is in a bit of a transition phase right now with all the attendant uncertainty, I can see N Brown’s performance improving nicely over the next few years as it increasingly moves its customer base to its internet offerings. I reckon we’re seeing an overlooked dividend bargain here.

Moneylending

If you’re uncomfortable making profit by lending money to poor people in developing countries, you might want to look away from International Personal Finance (LSE: IPF).

But there’s no doubt it’s bringing in cash and paying big dividends. The firm, which lends mostly in eastern Europe and Mexico, reported a fall in profits in 2016, but that was largely expected and reflected a number of issues — including reduced home credit profit, investment in IPF Digital, foreign exchange movements, regulatory changes in Poland, and other things.

The dividend was maintained at a well-covered 12.4p per share, and though it’s predicted to drop a little this year to 12.2p, with the shares on a very low P/E of 5.6 we’re looking at a yield of 6.6% — set to improve to a P/E of only 5 on 2018 forecasts, with the yield climbing to 6.9%.

While I wouldn’t invest for personal reasons, I see a strong likelihood of an upwards re-rating if we see the expected turnaround starting to materialise in 2018. And those dividend yields do look attractive.

The post 3 FTSE 250 dividend stocks at super low prices appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Cars and holidays

In its most recent update, the FTSE 250 retail giant said the public was spending less on clothing and more on cars and holidays, as it reported lower sales and shrinking margins in the third quarter of its financial year. The disappointing update came against a backdrop of rising new car sales in the UK, with new car registrations up again so far this year, after a record-breaking year in 2015. Furthermore, holidaymakers contributed to a strong season for Debenhams’ swimwear and luggage offerings, but other seasonal clothing sales had been poor, especially within womenswear.

Our friends in the Square Mile expect a 3% dip in profits for the full year, and a further 5% slide for fiscal 2017. On that basis it could be argued that the market’s low rating of the shares at just eight times earnings could be justified. But despite the lower earnings projections, the company is expected to hike its dividend this year to 3.47p per share, with a further increment to 3.51p next year, offering higher yields of 6.3% and 6.4% until FY2018. I think now could be a good time for income seekers to take advantage of this year’s share price weakness and grab a bite of that juicy dividend.

Rising dividends

Upmarket residential housebuilder Crest Nicholson (LSE: CRST) has enjoyed strong growth since it rejoined the London Stock Exchange back in February 2013. In the three years since, revenues have risen steadily from £526m to £805m, with pre-tax profits almost doubling to £154m. Investors who bought a slice of the company at its IPO price of 220p will have enjoyed watching the value of their stake almost triple to 604p just prior to the EU referendum. But of course all good things must come to an end, and Crest Nicholson tumbled to 335p within a fortnight of the historic vote as investors got caught-up in the panic and uncertainty.

The Surrey-based firm has lost a quarter of its value over the past year, leaving the shares looking undervalued at just seven times forecast earnings. But for me the healthy dividends remain the star attraction, with the battered share price sending the yield towards an incredible 7%. Shareholder payouts should continue to rise with ample dividend coverage even after analysts’ post-Brexit earnings downgrades. For me, Crest Nicholson remains a buy for both its long-term recovery potential and progressive dividend.

The post Can you ignore these 6% dividend yields? appeared first on The Twelfth Magpie.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Indeed, Santander’s stock price hurtled back to levels not seen since February following last week’s shock Brexit vote, a fall that came as little surprise — the UK is now Santander’s largest single market.

Meanwhile, Britain’s self-implemented ejection is also casting doubt over the health of the rest of Europe, territories to which Santander also has significant exposure.

And the bad news just keeps on coming for Santander. Yesterday the bank failed US capital stress tests for the second time, the Federal Reserve warnings of “broad and substantial weaknesses” in its capital planning.

With the bank also facing massive upheaval in Latin America, I believe Santander’s previous pledge of a 20-euro-cents-per-share dividend for 2016 could come under significant pressure. And consequently a 5.8% yield isn’t enough to tempt me.

Bargain beauty?

Shares in the travel sector have also come under severe pressure as the impact of Brexit on holiday-related spending comes under the spotlight.

International Consolidated Airlines (LSE: IAG) for one is still dealing at a 30% discount to last Thursday’s close.

The company warned on Friday that “following the outcome of the referendum, and given current market volatility, while IAG continues to expect a significant increase in operating profit this year, it no longer expects to generate an absolute operating profit increase similar to 2015.”

Still, I reckon selling activity could be vastly overdone.

Sure, an EU exit could make a significant dent in holiday demand looking ahead, particularly if travellers switch airlines to conserve cash and postpone long-haul holidays in favour of trips to the continent. This could have significant ramifications for British Airways in particular.

But IAG’s exposure to the fast-growing budget market, through Vueling and its recent purchase of Aer Lingus, should help take the edge off of such a scenario. And transatlantic travel is likely to remain robust as the weakened pound encourages overseas travellers.

Warnings of lower-than-previously-expected profit growth could weigh on IAG’s dividends in the near term, naturally. But I believe broker forecasts of a 27.3 euro cents per share payout for 2016, yielding a handsome 6.2%, is still an attractive proposition.

Build a fortune

The entire housebuilding sector also remains under the cosh as the possibility of higher mortgage payments and diving home prices has weighed.

But I believe the likes of Crest Nicholson (LSE: CRST) remain lucrative long-term stock candidates. After all, Britain’s housing shortage isn’t going to go away in a hurry despite government pledges to boost construction activity.

Against this backcloth, Crest Nicholson is expected to pay a 27.6p per share dividend in 2016. And a subsequent yield of 8% merits serious attention, in my opinion.

The post Will Brexit batter dividends at Banco Santander SA, International Consolidated Airlns Grp SA and Crest Nicholson Holdings plc? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.