Penny stocks have a reputation for being very risky investments. While some companies go on to thrive (like ASOS), many others go nowhere. Some go bust. 

This isn’t to say there aren’t a few winners out there, particularly after the year we’ve had on the markets. Here are three one-time penny stocks now requiring me to dig a bit deeper in my pockets.

Trading “materially ahead”

Market minnow Epwin (LSE: EPWN) manufacturers extrusions, moldings and fabricated low-maintenance building products. That may sound deadly dull, but I don’t think those buying the stock a year ago will be complaining. The share price has climbed nearly 70% since then. 

Back in July’s trading update, the company said revenue over the first half of 2021 had been 69% up on 2020. That’s not altogether surprising considering how bad things were last year. However, the £157.8m logged was also 13% ahead of 2019’s figure. Accordingly, management now expects full-year adjusted pre-tax profit to be “materially ahead” of previous expectations. 

However, there are still risks ahead. Supply chain issues and inflation are impacting a lot of businesses right now and Epwin’s no exception. So far, it’s been able to navigate these headwinds, but things could get worse before they get better.

Then again, the shares are still trading at a reasonable valuation price of 17 times forecast earnings for me to consider buying now. A 2.9% dividend yield easily covered by profit is another positive for me. 

Robust demand 

SigmaRoc (LSE: SRC) is another former penny stock whose shares are now trading (just) over a pound. Like Epwin, the construction materials company has clearly benefited from the revival in property over the last year. Its share price is up almost 140% since August 2020. 

Bar a prolonged market stumble, I can see this momentum continuing. Back in May, the company announced that trading had been “ahead of internal expectations“, thanks to strong private-sector demand and some large-scale infrastructure projects commencing. Since management will always be closer to the business than analysts, I take this as a buy indicator when looking for stocks for my own portfolio.

SigmaRoc has also been on an acquisition spree, buying three businesses in Belgium. More recently, it’s announced a reverse takeover of limestone developer Nordkalk for approximately €470 million. 

Half-year numbers are due on 6 September. In the meantime, the shares trade on a valuation of 19 times forecast earnings. One potential downside however, is the lack of dividends. 

Former penny stock

A final former penny stock worth mentioning is Sirius Real Estate (LSE: SRE). The company is a leading owner and operator of offices, business parks and industrial complexes in Germany.  The FTSE 250 member has also proven itself to be a great investment. The shares are up 63% over the last year. 

Of all three one-time penny stocks mentioned, SRE is probably the one I’d prioritise buying due to its arguably more diversified earnings stream. That said, it’s also the most richly valued, potentially making it riskier. A valuation of 24 times forecast earnings suggests quite a lot of good news might be priced in.

Having said this, I do wonder if there could be more upside ahead as people gradually return to their offices. Sirius seems confident, having recently snapped up four business park assets and one land parcel for around €85m. The shares also yield 2.9% this year, according to analyst projections. 

The post 3 former penny stocks now trading for over a pound! appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended ASOS. 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.

Oversold and unloved

Buying good quality companies after they’re demoted to the FTSE 250 can be a profitable strategy. This move tends to result in a lot of forced selling by FTSE 100 tracker funds and other institutional investors that are only allowed to own FTSE 100 stocks.

As a result, the stock can become oversold, leaving the share price artificially depressed and poised for a strong recovery. 

Are bigger problems ahead?

For a cyclical sector such as airlines, peaks and troughs in profits (and share prices) are to be expected. Right now, most airlines are struggling with a sharp rise in fuel costs due to higher oil prices.

In addition to this, I think there’s also some risk of excess capacity on some European short-haul routes after years of continued expansion. This could keep fares low despite rising costs.

The City has certainly turned cautious on easyJet. Brokers’ consensus forecasts for profits in 2019 and 2020 have been cut by about 20% over the last three months.

Buy now or wait?

Although easyJet is facing tougher trading conditions, I don’t see any reason to think that the business has any fundamental problems.

What’s not yet clear to me is how much worse market conditions are likely to become. Is the current share price a world-class buying opportunity? I’m not sure it is.

The firm’s dividend policy suggests a dividend cut is likely this year and the shares are still trading on nearly 10 times forecast earnings. I plan to watch and wait a little longer before taking another look at easyJet shares.

An overlooked opportunity?

One company I’ve admired for a while is German commercial property group Sirius Real Estate (LSE: SRE). This £650m company owns and operates business parks across Germany. Its approach is to buy, improve and sometimes sell property in order to realise capital gains as well as rental income.

It’s a strategy that’s worked well in recent years. Figures released today show that the firm’s net asset value rose by 12.6% to €0.71 per share last year. Strong growth in Sirius’s rent roll meant that funds from operations — a proxy for cash generation — rose by 26% to €48.4m.

Shareholders will receive a dividend of 3.36 eurocents per share for 2018/19 — a 6.3% increase on the previous year.

A change of focus?

Chief executive Andrew Coombs expects to continue delivering growth thanks to recent acquisitions and a new joint venture with insurance giant AXA.

However, one thing that caught my eye about today’s figures was Mr Coombs’ comment that having hit £1bn in assets, the company would now focus its efforts on cash generation.

Is this a subtle message that market conditions might be changing in Germany? I’m not sure.

However, with the shares offering a forecast yield of 5.3% for 2019/20, I see this stock as a good way of diversifying away from UK property. I’d be happy to buy and hold these shares, topping up during any future market downturns.

The post Dividend stocks: Two 5%+ yielders that I’m considering right now appeared first on The Twelfth Magpie.

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Roland Head 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 company owns, develops and operates branded business parks providing conventional space and flexible workspace in Germany, which attracts some big-name tenants such as Porsche AG, Land Berlin (a government agency) and FOM (an educational body).

Clear operational and strategic progress

Since I last wrote about the firm in November, the share price has risen around 9%. However, I think the dividend yield remains attractive at close to 4.6%, and I’m encouraged by today’s trading update because it sets out the clear operational and strategic progress achieved over the company’s trading year, which finished on 31 March.

During the 12-month period, organic growth from the existing portfolio of property came in stronger than the directors previously expected. On top of that, the company made “good progress” with acquisitions, disposals and movement towards a “substantial” joint venture with AXA IM – Real Assets. 

Demand from tenants has been “high” and this combined with the firm’s asset management programme to deliver a like-for-like increase in annualised rental income of around 6.2%. I like the way Sirius has raised almost €26m by selling three “non-core” assets in Bremen, meaning that the firm has withdrawn completely from the market in that area. There were other minor disposals in the period too, and the firm can reinvest the spare funds into property investments with a higher potential return. I reckon such flexibility and diversity is often limited if you own physical property in a buy-to-let arrangement yourself.

Driving future growth

Looking forward, I reckon there is plenty happening in the business that looks set to drive further total returns for the firm’s shareholders. The directors expect the joint venture to complete at the end of June. The process involves Sirius selling 65% of its interests in “five Group subsidiary companies” to AXA IM – Real Assets, which will deliver an “implied” property purchase price of €168m. The most recent book value of the assets was around €141m, suggesting an uplift in value for Sirius. The directors come across as very bullish on the deal, saying in the update that the JV looks set to provide “significant firepower” to make further acquisitions. On top of that, there will be an attractive income stream generated for Sirius because the firm will continue to manage the assets. 

The JV will help Sirius expand its horizons because it will enable the company’s participation in “much larger assets and portfolios” with a “wider range” of return profiles and development opportunities than previously.

I’ve been watching Sirius for a while and continue to be impressed by the way the firm is driving its operations forward. I’m tempted to pick up a few of the company’s shares to see what happens from where we are now. We can find out more with the full-year results release due on 3 June.

The post Forget buy-to-let! I’d buy shares in this growing property company appeared first on The Twelfth Magpie.

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Kevin Godbold has no position in any share 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.

Property-backed investments

Instead, if you like the idea of engaging in a property-backed investment, there are several shares listed on the London stock exchange that could give you exposure to the property market without all the inconvenience of actually buying and owning property. One example is Sirius Real Estate (LSE: SRE), which invests in, develops and operates branded business parks providing conventional space and flexible workspace in Germany.

The firm’s half-year report today revealed that rental and other income from investment properties rose almost 17% in the first half of the trading year “despite the impact of three large expected move outs.” I reckon the ups and downs of property ownership affect all property firms, but imagine the impact it would have if you lost your single tenant from your one buy-to-let property. By investing in a larger property company such as Sirius, you are able to spread your risk over many underlying properties.

Sirius is trading well and the total annualised rent roll increased almost 18% to €82m and profit before tax shot up 43% year-on-year. There was a valuation gain on the firm’s properties net of capital expenditure and lease-incentive adjustments of a little over €56m in the period, and adjusted net asset value per share moved up 7.3%, to 70.52 euro cents. The total book value of the assets rose to almost €1,049m, so Sirius operates a comfortably large enterprise.

Growth and income

The firm made two property acquisitions in the first half of the trading year, spending almost €30m, “followed shortly after the period end by the acquisition of an asset for €9.6m and notarisation of an asset for €25.7m.” But as well as buying, the firm has been selling and completed the disposal of its non-core assets during the period to raise a little over €19m. The firm plans to spend the money on further acquisitions and said in the report that it has “significant” resources to acquire more properties in the second half.

Chief executive Andrew Coombs said: “Occupier demand for industrial assets and secondary offices in Germany has never been greater,” which bodes well for the company’s expansion programme. Meanwhile, at today’s share price close to 61p, the forward dividend yield for the trading year to March 2020 sits at just over 5%, which strikes me as decent income to collect while we are waiting for growth. The shares are up around 150% since January 2014 and now trade on a price-to-tangible-book-value of around 1.09, which seems undemanding. I think the stock is attractive, and owning it would be a lot less complicated than buy-to-let!

The post Forget buy-to-let, I’d buy shares in this property company instead appeared first on The Twelfth Magpie.

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Kevin Godbold 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.

Predictable earnings 

Self-storage firm Safestore (LSE: SAFE) has been a stonking investment for those who’ve bought and held on over the last few years. Our growing need for places to house our possessions has seen the shares climb 285% in value since September 2013. 

There could be more to come. Highlights from the mid-cap’s Q3 update earlier this month included a 10.3% rise in group revenue and 5.6% rise in like-for-like revenue, both at constant exchange rates. Performance in the UK and in Paris was described as “strong” with Alligator — the company’s 12-store recent acquisition — trading in line with expectations. 

And Brexit? CEO Frederic Vecchioli certainly doesn’t appear concerned, having stated that the company’s business model should allow it to “withstand any macroeconomic uncertainty that may arise over the coming months“.

On almost 20 times earnings, Safestore isn’t cheap, but this may still be a reasonable price to pay based on its growth strategy and all-round stability. It’s also not as expensive as main rival Big Yellow. 

The company is forecast to return 17.1p per share in the next financial year (beginning November), which translates to a decent 3.2% yield at the current share price.

Robust model

When it comes to searching for robust business models, waste manager Biffa (LSE: BIFF) also fits the bill nicely. 

This month’s update from the firm was appropriately predictable. Trading in the first half of the financial year (six months to 28 September) had been in line with management expectations, with its Industrial & Commercial division continuing to generate “good organic and acquisitive revenue growth“. 

Elsewhere, trading at its Resource Recovery & Treatment and Energy Divisions was adequate, although the bin-collecting Municipal division continues to be impacted “by cost inflation and local government spending cuts“.

Trading on 13 times forecast earnings, Biffa still looks fair value in my opinion. There’s a 2.7% dividend yield for this year with an 8% hike to the total payout predicted for 2019/20, all easily covered by profits. 

German strength

The last pick would be Sirius Real Estate (LSE: SRE) which operates business parks in Germany. That might not be enough quicken your pulse, but it’s fair to say that recent trading has been anything but dull. 

Earlier this month, the company announced news of three new lettings to a German sports car manufacturer, a division of the Berlin government and a global humanitarian charity (Care International). A “significant renewal” by existing tenant Daimler AG (owner of Mercedes-Benz) is also on the cards, with the latter looking to secure 40,000 sqm of space for an extra five years.

On a forecast price-to-earnings ratio (P/E) of a little under 18 for the current year, Sirius is — like Safestore — a little expensive. That said, this moves down to 15 in 2019/20 should analyst estimates on growth prove correct. Having now entered into exclusivity to buy another €60m of assets (following the €40m already spent), I wouldn’t bet against profits continuing to rise.

A chunky 5% dividend yield at the current share price is the icing on the cake.  

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Paul Summers 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.

Including a 10.4p per share payout that will be received in early July, investors who bought the shares four years ago will have received about half of their original investment back in cash. That’s an unusual situation which suggests investors are unsure how sustainable the firm’s profits will be.

Although I agree that a house price slump is inevitable at some point, the market appears to remain fairly stable at the moment. If this situation continues, Taylor Wimpey’s forecast dividend yield of 8% could attract buyers to the stock as the year continues. I believe the shares could end the year ahead of the FTSE 100.

Cash + earnings upgrades

Unlike some rivals, the firm still has positive earnings momentum. Earnings per share are expected to rise by about 5% this year, and by a similar amount in 2019.

Although these forecasts could yet be cut, the group reported net cash of £511m at the end of 2017. Management expects to finish this year with a similar cash balance, despite £500m of planned dividend payouts.

Poor weather hit its performance at the start of this year, but trading remains solid. At the end of April, the firm reported forward orders of £2,155m and average orders per outlet of 0.85 per week for the year to date. The equivalent figures last year were £2,210m and 0.93.

The stock’s forecast yield of 8% looks well supported to me, as long as costs remain under control. I’d remain a buyer of Taylor Wimpey at current levels, but for investors looking for outright growth, I do have an alternative suggestion.

An income-growth buy?

Shares of German commercial property group Sirius Real Estate (LSE: SRE) rose by around 3% in early trade this morning after the firm said pre-tax profit rose by 17% to €89.6m last year. This figure was boosted by some significant gains, thanks to the revaluation of some properties and the sale of a number of assets.

However, the underlying performance of its business parks portfolio also improved. Like-for-like annualised rental income rose by 6.2%, while occupancy levels rose from 79.8% to 82.5%. Total annualised rental income lifted 12% to €79.5m, thanks to a number of acquisitions.

These figures suggest to me that demand for Sirius’s flexible workspace developments remains strong. And today’s news confirms my view that the company could be positioned for another step forward in growth.

Recycle and repeat

According to today’s results, Sirius completed an “intensive period of asset acquisition and recycling” last year. What this means is that the group sold three mature assets for a total of €103m and purchased 13 new assets for €163.7m.

The new properties have average occupancy of just 58%, compared to 90% occupancy for the ones which were sold. Management hopes that by investing in these under-utilised properties, the firm will be able to generate increased rental income and capital gains from improved valuations.

The shares now trade at around 1.2 times book value and offer a 4% yield. Given the group’s track record of creating value for shareholders, I believe this stock remains a buy at current levels.

The post Why I think the Taylor Wimpey share price could beat the FTSE 100 this year appeared first on The Twelfth Magpie.

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Roland Head owns shares of Sirius Real Estate Ltd. 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.

However, with the bank now having a relatively high dividend yield as well as a new strategy, it could prove to be a strong performer. As such, buying it now could be a sound move from an income perspective.

Changing business

HSBC is in the process of making major changes to its business model. As well as a new management team, it is currently seeking to capitalise on the changing growth outlook for various parts of the world economy. For example, it is focusing to a much greater extent on the Asian economy, where demand for its services is increasing at a faster pace relative to other regions. This is likely to act as a positive catalyst on its growth rate and could help it to overcome what continue to be relatively high costs compared to a number of its sector peers.

Although progress is being made in making the company more efficient, there is still a long way to go. However, with positive earnings growth forecast in each of the next two years, its financial outlook appears to be increasingly positive.

Income prospects

Increasing profitability should help to create a more sustainable dividend. With shareholder payouts expected to be covered 1.4 times by profit in the next financial year, there seems to be scope for them to rise after a number of years of stagnation. This could help to improve the appeal of the company from an income perspective, and may create additional demand from investors who remain concerned about global inflationary pressures.

Therefore, while still an improving business, HSBC appears to be an enticing income option within the FTSE 100. Its dividend yield of 5.6% suggests that it not only has a high income return, but also offers an attractive valuation at the present time.

Promising outlook

Also offering impressive dividend potential is Sirius Real Estate (LSE: SRE), an operator of branded business parks providing flexible workspace in Germany. The company released a trading update on Monday which showed that it has experienced strong tenant demand during the year to 31 March. Alongside specific asset management initiatives, this has generated an encouraging increase in organic rental growth from its business parks.

With the company’s like-for-like (LFL) annualised rental income increasing by over 5%, the business seems to be enjoying robust trading conditions. It is forecast to post a rise in earnings of 12% this year, followed by further growth of 26% next year. This puts it on a price-to-earnings growth (PEG) ratio of 1.7, which suggests that it has high capital growth potential.

A rising bottom line also means that Sirius Real Estate could boost its dividend payments. Since it already yields nearly 5%, it could become a rather attractive income stock in the long term.

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Peter Stephens owns shares of HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. 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 two companies I’m looking at today both have quite simple businesses. Both have also attracted the eye of fund manager Neil Woodford. Should we follow his lead?

Adding value for shareholders

Property group Sirius Real Estate (LSE: SRE) owns and operates branded business parks in Germany. These contain a mix of conventional office space — for larger companies — and shared office space, of the kind that’s popular with small firms and start-ups.

In my view, the company’s main appeal is its ability to add value to the properties it buys. Sirius doesn’t just buy buildings and then sit back and collect the rent. It finds properties that are under-occupied and improves them, hoping to increase their occupancy, rental yield and market value.

Today’s half-year results show how this can work. During the six months to 30 September, Sirius sold sites worth €103m. These had an average occupancy of 90%. During the same period, the group purchased or committed to buy €166.7m of new property, with an average occupancy of just 58%.

Pre-tax profit for the period rose by 44.5% to €54.7m. The book value of the group’s property portfolio rose by 4.1% to €857.4m, while the interim dividend will be lifted by 12.2% to 1.56 euro cents per share.

Sirius stock has risen by 23% so far this year. It now trades at around 1.1 times its book value of c.57p per share. However, the stock still offers a forecast dividend yield of 4.3% and remains a buy, in my view.

Put the kettle on

Strix Group (LSE: KETL) claims to be the world’s largest manufacturer of kettle safety controls, with a global market share of around 40%. According to the firm, around 70% of kettles in the UK have Strix safety controls.

This company only listed on the AIM market in August, so it doesn’t have much of a track record as a public company. But I think it might be worth considering.

My first thought about Strix was that its business could be vulnerable to low-cost competition. But its products are safety critical and are regulated in many western markets. I’d expect this to provide some kind of defensive moat. Switching to a cheaper alternative might not be worth the risk, for manufacturers.

Too soon to buy?

Strix shares currently trade on a 2017 forecast P/E of 12.5. Earnings per share are expected to increase by about 10% to 12.4p in 2018, giving a P/E of 11.4. Analysts expect the group to pay out 7p per share in dividends next year, giving a prospective yield of 4.9%.

The firm’s historic accounts suggest to me that cash generation should be strong, providing solid backing for the planned dividend policy.

My only concern is that the group’s finances were heavily reorganised as part of its flotation. These changes appear to have left the group with £60m of debt and a weaker balance sheet. I’d want to see a post-IPO set of accounts before considering an investment, so I’m going to keep this stock on my watch list for now.

The post 2 Neil Woodford dividend stocks that could help you make a million appeared first on The Twelfth Magpie.

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Roland Head owns shares of Sirius Real Estate. 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.

A successful period

Reporting on Monday was branded business park operator in Germany Sirius Real Estate (LSE: SRE). The company announced a successful six-month period to 30 September, which saw continued investment in its asset base as well as the raising of equity capital to support further acquisitions.

Lettings activity during the period was driven by strong occupational demand from the German SME market for both conventional and flexible workspace. This allowed the company to deliver a like-for-like annualised rental increase of 2%. A major capex programme was a key contributor to this increase, with sub-optimal space being transformed into either prime lettable space or one of the company’s premium Smartspace products.

The company was also able to secure rate increases through active asset management. For example, its like-for-like average rate per square metre increased from €5.11 to €5.17. Its in-house lead generation helped to attract new tenants, which means it does not depend on external brokers.

With Sirius Real Estate forecast to post a rise in its bottom line of 14% next year, it trades on a price-to-earnings growth (PEG) ratio of just 1. This suggests it has capital growth appeal, while its dividend yield of 4.5% is also impressive compared to a number of its peers. Since its dividend is covered 1.4 times by profit, there could be significant growth ahead for the company’s investors.

Dividend growth

Also offering a high chance of dividend growth over the medium term is plumbing and heating products distributor Ferguson (LSE: FERG). The company, formerly called Wolseley, has a strong track record of increasing dividends on a per share basis. They have risen from 66p per share in 2017 to 110p per share in 2017. That works out as an annualised growth rate of 13.6%, which is clearly well ahead of inflation.

Despite such a rapid growth in dividends during the last four years, Ferguson’s shareholder payouts are still covered 2.6 times by profit. When combined with the prospect of earnings growth of 9% next year, this means that dividends could move higher at a rapid rate over the medium term. Certainly, the stock may have a dividend yield of just 2.1% at the present time. However, over a multi-year time period its income return and capital growth potential could be relatively high.

The post 2 dividend growth stocks for the long term appeared first on The Twelfth Magpie.

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Peter Stephens 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.

One of the great things about being a British investor is the wide variety of foreign listings the London Stock Exchange attracts due to its reputation, high liquidity and the UK’s law code. While many of these foreign listings are of multinational behemoths, a few of the smaller ones such as German Sirius Real Estate (LSE: SRE) and Brazilian maritime services firm Ocean Wilsons (LSE: OCN) are eyecatching income options in this low-yield world.

Teutonic stability 

Sirius announced full-year results this morning and rewarded shareholders with a 32% year-on-year (y/y) increase to its dividend so that the shares now yield a hearty 4.3%. This increase was more than matched by rising profits and earnings per share of 4.25 cents nicely cover the dividend payout of 2.92 cents per share.

The company’s stellar forward momentum has been driven by very impressive domestic economic growth that has steadily increased demand for the business parks Sirius purchases, invests in and flips for a profit when mature.

In the year to March the group notched up a 23% y/y rise in total income to €68.8m due to acquisitions and a very healthy 5.1% increase in like-for-like rental income. Management has also continued to actively manage the portfolio and made €153.2m in purchases during or shortly after the year-end period and disposed of €110.4m worth of properties.

As the German economy picks up steam the group is benefitting not only from rising rents, but also steadily appreciating property values. Last year saw an 8.5% like-for-like rise in the valuation of already-owned properties and a full 11.2% uplift in the value of recently acquired properties. Together this gave the company’s portfolio a year-end book value of €823m and kept its gross loan-to-value ratio a decent 42.3%.

The downside for would-be investors is that Sirius’s well-run business model and the healthy German economy have sent the company’s shares on a stellar run so that they now trade hands at a full 16 times forward earnings. This is simply too lofty a valuation for a real estate company to make me comfortable enough to purchase shares.

A tad too risky?

On the other side of the world, investment holding firm Ocean Wilsons provides shareholders with a very nice 4.8% dividend yield that last year was covered two times by earnings. The company’s main asset is a large stake in the similarly named business that engages in maritime services in Brazil.

That business is a well-run one and last year coped well with lower shipping volumes into and out of Brazil due to the poor macroeconomic environment. During the period the company’s profits rose from $29.3m to $80.7m, but this was down almost entirely to the appreciation of the Brazilian Real. But management being able to maintain operating margins shows the underlying business is sound.

However, Ocean Wilsons is still a tad too risky as an income share for me to commit money to it. This is down to the high volatility of the Brazilian economy, the Real depreciated a full 20% y/y in Q1 alone, and the fact the company also owns an investment portfolio worth some $253.2m. This diversified structure and reliance on the health of a highly corrupt, politically unstable developing country leads me to look elsewhere for my income shares.

The post 2 Brexit-beating high-yield foreign dividend stocks to consider today appeared first on The Twelfth Magpie.

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Ian Pierce 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.