Many investors will be drawn to the ‘usual suspects’ for their dividend fix, namely FTSE 100 companies. However, I think looking further down the market spectrum can also be a good idea. Here are three less-well-known shares I’d be prepared to buy today.

Liontrust Asset Management

Like many other listed companies, fund manager Liontrust (LSE: LIO) hasn’t had the greatest of starts to 2022. Actually, that’s an understatement. Its share price has now tumbled 24% year-to-date, most likely due to concerns that profits will fall due to people pulling their money out of the market. 

That’s said, it’s still up 34% over the last 12 months. And, of course, the beauty of investing for dividends is that I can take such volatility in my stride so long as the passive income keeps rolling in. 

Importantly, Liontrust has consistently hiked its annual payout by a double-digit percentage for many years. Analysts have the company returning 64.1p per share in the current financial year. At today’s share price, that equates to a yield of 4%. It’s also sufficiently covered by profits, making a cut unlikely.

That said, investors need to be aware that the fund management industry is notoriously competitive and there’s always a risk Liontrust may need to cut fees to help retain clients.

Redde Northgate

Redde Northgate (LSE: REDD) provides “mobility solutions and automotive solutions” to businesses. It also strikes me as a great source of dividends.

The £1bn-cap company looks set to return 19.4p per share to holders in FY22, giving a chunky yield of 4.9%. This should help holders to keep up with rising costs. Like Liontrust, the payouts are safely covered by expected earnings. With the exception of 2020, Redde Northgate is also a regular dividend hiker. 

The shares aren’t exactly expensive either, changing hands for nine times forecast earnings. That’s despite the company’s value rising 45% over the last 12 months!

I suppose one thing to bear in mind here is that Redde Northgate may need to replenish its fleet of vehicles every now and then. That could end up reducing margins significantly, especially at today’s prices.  

Synthomer

Chemicals firm Synthomer (LSE: SYNT) is a final secret stock offering a tempting dividend yield. It’s a leading supplier of aqueous polymers that are used in things such as latex gloves.

Just like the aforementioned asset manager, Synthomer’s share price has been on a downer since the beginning of 2022. In the last 12 months, it’s fallen 22%. On a positive note, this does leave them looking cheap at just seven times expected earnings. 

Unfortunately, the dividend is expected to fall by 22% this year. However, I’m including it here for two simple reasons. First, the yield is still expected to be 5%, which is a far more passive income than I’d get from a cash savings account. Second, this payout looks thoroughly secure based on predicted profits. 

Similar to Redde Northgate, a risk with Synthomer is that supply chain hold-ups may impede growth. This may explain why the shares have been out of form recently.

Notwithstanding this, the vast majority of brokers covering the company remain positive. This suggests now might be as good a time as any for long-term investors like me to load up.

The post 3 secret inflation-busting dividend stocks to buy for passive income 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 Synthomer. 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.

Even though the stock has only added 4% since my last article, the underlying business has continued to push ahead. Numbers published today show revenue jumped by 32% to £24.9m for the six-month period ended 5 July. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 35% to £4.1m. 

A growth business 

Usually, I avoid using EBITDA figures for evaluating a business because they can be easily manipulated. In this case, however, I’m happy to bend the rules because Everman is still in its early stages of growth. The firm only has 2.5% of the UK cinema market (up from just under 2% in June 2017) and is aggressively chasing market share. One new venue was added during the six months to the beginning of July and management has committed to a further 15 new sites, almost doubling the current 22 venues in operation. Including the cost of opening new cinemas, Everyman’s profit for the period was just £768,000. 

Still, even after including opening expenses, the stock seems cheap after adjusting for growth. Analysts are forecasting earnings per share (EPS) growth of 163% for 2018. The stock is changing hands for 40 times forward earnings, but after factoring-in EPS growth, it has a PEG ratio of 0.9, indicating that the shares are undervalued based on the company’s growth potential. 

With this being the case, and considering the pipeline of opportunities still to come, I reckon Everyman is one of the best growth stocks out there.

Double your money 

Another growth champion is FTSE 250 speciality chemical enterprise Synthomer (LSE: SYNT). 

Over the past five years, Synthomer’s growth has blown the lights out. Net profit doubled between 2012 and 2017, while normalised EPS (before accounting adjustments) have jumped 150%. The stock has added around 140% over the same period. 

As the firm builds on its established business, the City is expecting more of the same for the next few years. EPS growth of 12% is pencilled in for 2018, and 10% for 2019. These figures put the stock on a forward P/E of 17. 

What I like about Synthomer is that it is a well-established business in a niche market — supplying aqueous polymers.  In my mind, this gives the firm a substantial competitive advantage that justifies a high earnings multiple. 

What’s more, it is a highly profitable, cash generative business. For the six months to the end of June, the firm booked a pre-tax profit margin of 10%. Synthomer reinvests the bulk of earnings back into the business and is always on the hunt for bolt-on acquisitions to help it break into new markets and reinforce its position in old ones, which should ensure that the group stays at the top of its game for many years to come. 

That’s why I believe this FTSE 250 growth stock is well worth your further research time.

The post Could this FTSE 250 growth stock double your money again? appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Synthomer. 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.