Retail companies are really out of fashion right now, but Dunelm isn’t a traditional retail business. Its unique offering has helped the company grab market share and outperform most of its peers for the past six years. And it doesn’t look as if this trend is going to come to an end any time soon. 

Beating expectations

Since 2013, Dunelm’s sales have grown at a compound annual rate of around 9%. This year, the company is on track to blast past this average. 

In the company’s last trading update before its fiscal full-year results, management revealed like-for-like sales rose 15.4% in the fiscal fourth quarter, with a 37% jump in online revenue.

Following this performance, Dunelm hiked its profit expectations for the full year. City analysts are now expecting the company to report earnings growth of 19% for fiscal 2019, making Dunelm one of a handful of retailers that are still seeing earnings and sales growth.

This performance is the primary reason why I am confident Dunelm could be a great addition to your portfolio today. 

Unique relationship

Another retailer that is also outperforming in a tough environment is JD Sports Fashion (LSE: JD). 

This multi-channel retailer of sports fashion is, according to current City targets, on track to report total sales of £5.8bn for its current financial year. If the company manages to hit this lofty target, it will have increased sales by 380% in six years. Over the same time frame, earnings per share have risen at a compound annual rate of 36%.

JD’s secret to success lies in its connections with suppliers. It has agreements with major sports fashion brands, which allow the company first dibs on any new styles. This means JD is usually the first port of call for the fashion-conscious. Further, the firm offers these products at attractive prices. 

As long as the business does not deviate from its formula for success, I think it is highly likely JD will continue to outperform competitors for the foreseeable future. A P/E of 18.7 makes this one of the more expensive retailers on the London market, but I think it is a price worth paying for this first-class business. 

Development pipeline

Moving away from the retail sector, I reckon student accommodation provider Unite Group (LSE: UTG) could be a stock worth buying in the current environment. 

As one of the largest student landlords in the country, Unite has unrivalled economies of scale in the accommodation business. It is also a pretty defensive business. Even if the global economy enters a depression tomorrow, students will still want to go to university, meaning Unite should be relatively unaffected. 

Unite’s pipeline of new developments and acquisitions promises plenty of growth in the years ahead. Last week the company announced that it had acquired a new 620-bed development site in Nottingham as part of its ongoing target to maintain a development pipeline of 2,000 beds a year. 

Based on the company’s development pipeline and existing properties, City analysts believe the firm has the potential to pay out 33p per share in dividends this year, giving a potential dividend yield of 3.2%. The City thinks the payout could rise a further 12% in 2020, offering a yield of 3.6%. 

The post Looking for stocks to buy? I like these 3 companies appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no 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.

Its data showed that while average rents in the UK have risen by 16% in just five years, rental costs in so-called gentrified areas — those that have undergone vast changes to attract a more prosperous clientele — have grown on average by a chubbier 21%.

It’s not a well-guarded secret that urban generation leads to higher rents. What is staggering, though, is the rate at which rents have grown in some of these areas (as the table below shows). In Manchester, for example, rental prices have ballooned by almost 40% during the past half decade.

Average Rent Change By City (2014-2019)

Source: Bunk

But before leaping into the buy-to-let market, it’s important to remember big rent increases don’t always translate into chunky returns for landlords. And certainly not at the present time taking into account a toxic cocktail of increasingly-large tax bills, rising operating costs, and an assortment of new regulatory and administrative fees.

Unite to win

A much better way to make your cash work for you is by investing in Unite Group (LSE: UTG), in my opinion. Student accommodation is big business and, just like we see in the broader rentals sector, there’s a severe shortage of available property which is supporting handsome rent growth for specialists in this area. To illustrate this point perfectly, the FTSE 250 business last week declared that European Public Real Estate Association (or EPRA) earnings leapt 16% in the first half of 2019 to £61.2m. And this encouraged it to raise the half-time dividend 8% to 10.25p per share.

Undergraduate and postgraduate numbers are swelling in the UK and there’s no reason, therefore, to expect Unite and its peers to stop delivering some delicious shareholder returns. City analysts certainly share my bullishness and reckon the firm’s record of double-digit annual earnings increases are here to stay for some time at least (rises of 14% and 10% are predicted for 2019 and 2020, respectively).

A millionaire maker?

Unite’s not content to rest on its laurels in the hunt for handsome profits growth, however. It supercharged its long-term earnings outlook with the £1.4bn takeover of rival Liberty Living in a move that’ll create an industry giant providing 75,000 beds the length and breadth of the country.

Over the past 12 months, total shareholder returns at Unite — that’s the value of dividend payments added to share price gains in the period — have clocked in at a very-handsome 25.7%. Should the company be able to replicate this performance, a £10,000 investment from you or I into a Stocks and Shares ISA today would generate a cool £1,219,104 in just 21 years. And I reckon the business has all the tools to indeed provide such scintillating shareholder returns.

The post Forget buy-to-let: I think this big-yielding property stock could net you a £1m ISA 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.

Faced with a rapid rise in tax bills, operating costs and a maze of regulations, buy-to-let investors are exiting the sector en masse, worsening the already chronic shortage of rental properties and thus driving rents skywards. And these rises are no more apparent than in the room rentals segment, as latest data from Ideal Flatmate shows.

Room rents leap 8%!

The online homeshare portal analysed 29,000 room listings in major UK cities and found that, on average, room rents jumped 8% in quarter two from the prior three-month period, to £577 per month.

University cities Oxford and Cambridge led the way with rises of 8% and 9%, respectively, in the last quarter, while rents also rose 8% in Liverpool. Things weren’t quite so rosy on the South Coast, though, and room rents dropped 13% in Bournemouth, making it the worst performing city in the second quarter, while Portsmouth rents sunk 10%.

Source: Ideal Flatmate

On a national basis, room rents have staged an impressive jump, I’m sure you’d agree. But Ideal Flatmate didn’t put the rise down to the aforementioned supply/demand gap in the rentals market. Instead, it blamed the introduction of the Tenant Fees Act in June and landlords’ subsequent attempts to claw back money by hiking rents, a development which perfectly reflects the tough conditions in which proprietors now find themselves operating.

So don’t get pulled in by rising rents, I say. Landlords are finding it increasingly hard to defend returns, and with government policy to increase the nation’s housing stock failing, it’s quite likely property owners will continue to bear the brunt of this.

A better property play

Why take the plunge in the increasingly hostile world of buy-to-let when there’s so many better ways to make big money from property?

Take Unite Group (LSE: UTG), for instance, the major provider of student accommodation. It’s also riding the wave of intense rent rises in university towns such as Oxford and Cambridge and, last week, declared that rental growth across its rooms had driven the value of its total property portfolio 1.3% higher during Q2, to £2.4bn.

Demand for student accommodation is going from strength to strength, and this was illustrated by application figures just released from university and college admissions service UCAS. The number of applicants for UK universities for this academic year have risen in both Britain and across the European Union, while those applying from outside Europe have surged 8% year-on-year to record levels.

It’s not a shock to see City analysts, then, predicting that Unite Group will keep doling out double-digit improvements in annual earnings — rises of 13% and 10% are predicted for 2019 and 2020, respectively. And this means investors can enjoy inflation-bashing dividend yields of around 3.5% through this period too.

So forget about buy-to-let, I say. This FTSE 250 stock is a much better way to play property markets, in my opinion.

The post Rents are booming for these buy-to-let investors! Time to jump in, or buy this property stock instead? 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.

Although ultra-low mortgage rates may make headline rental yields seem attractive, it’s worth remembering unexpected repair costs and void periods can quickly eat into these ‘profits’. And if house prices fall, then any gains from rental income may be offset by capital losses.

I think that better options are available in the stock market for investors who want exposure to UK property. Here, I want to look at two popular companies operating in this sector.

A 12% yield for savvy investors?

When FTSE 100 housebuilder Persimmon (LSE: PSN) hit the news due to a rash of customer complaints about poor build quality, my view was it might be safer for investors to focus on rival firms with five-star HBF ratings.

With the risk of a housing slowdown on the horizon, I still think it makes sense to focus on quality. But Persimmon is taking steps to improve the quality of its homes and position itself for a slower market. With a 12% dividend yield expected each year until 2021, I think it could be time to take a fresh look at this stock.

What’s changed?

Persimmon is slowing down the release of new property onto the market by not putting houses on sale until later in the construction process. This is expected to reduce build quality issues and keep sales stable if demand slows.

Early results are said to be positive. But this strategy isn’t without risk, in my view. As Persimmon’s build rate has remained fairly stable, inventories of unsold property were 19% higher at the end of June than they were one year earlier. If buyer demand slows, then future profits on this inventory could be lower than expected.

However, despite the stock’s 30% fall since June 2018, my research shows the PSN share price has outperformed most rivals over the last five years. The company’s cash position remains strong and the 12% yield looks safe for the next couple of years, at least. With the shares trading under 2,000p, I’d consider this as a possible buy.

Students power profits

An increasing number of builders are focusing on growing demand for build-to-rent property. FTSE 250 firm Unite Group (LSE: UTG) has taken this one step further by focusing its efforts on creating purpose-built accommodation for university students.

This strategy has been extremely successful and UTG stock has risen by 57% over the last two years, and by 137% over five years.

An update today confirmed the value of these properties is continuing to rise. Unite said the value of properties in its Unite UK Student Accommodation Fund (USAF) rose to £2,399m during the second quarter. On a like-for-like basis, that’s a 1.3% increase on the previous year.

My view

I think Unite looks like a good business. But returns on capital are only average, at about 6.5%. Given this, UTG stock looks expensive to me, on 26 times forecast earnings and at a 40% premium to book value. The dividend yield of 3.2% isn’t high enough to tempt me. I believe there will be better times to buy.

The post Forget buy-to-let! I’d rather buy this FTSE 100 12% dividend stock 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.

However, our bullish opinion of the sector has turned over in the past couple of years. Government has increasingly sought to punish landlords with higher costs and more regulation, efforts concocted to soothe the country’s homes crisis by reducing the number of properties being bought for buy-to-let purposes.

Labour pains

And the risks to participants in the rental market has risen a notch or two this week as the unrelenting Brexit problem weakened the Tory government again and raised the prospect of an imminent early election. Bookmakers have slashed the odds on a 2019 ballot box battle further and Ladbrokes for one is offering 6/4 on such an eventuality.

Why does this present further cause for landlords to worry? Well, it raises the possibility of Labour grabbing the keys to Downing Street and imposing even more painful legislation for the sector. Just last week, the party announced it would introduce indefinite tenancies should it win an election and sits alongside other potentially-crushing policies like rent caps and tighter standards for rental properties.

A better bet

I certainly wouldn’t get involved in buy-to-let in the current climate. Indeed, I’ve decided to use my extra capital to invest in the stock market instead, and I reckon you’d be better off following suit.

If you’re looking to get exposure to the property market, a better way to do so would be to buy shares in Unite Group (LSE: UTG).

The student accommodation provider saw pre-tax profit jump 7% in 2018 to £245.8m and there’s plenty of reasons to expect the bottom line to keep on swelling. Participation rates for the UK’s best universities remains strong, and Unite in particular is well placed to benefit from this — around nine-tenths of the company’s properties are located around the UK’s high- and mid-ranked universities. It’s also intending to focus all future expansion efforts on these popular institutions.

Unite is also benefitting from the country’s housing shortage, as the growing exodus of buy-to-let landlords amid a backcloth of increasing costs and regulatory loopholes boosts the company’s outlook still further.

Dividend darling

An important addendum for income hunters is that Unite Group is a particularly great stock for those looking for great dividend growth. Last year, the business hiked the full-year payout to 29p per share. With earnings expected to keep ripping higher — brokers are forecasting earnings rises of 12% and 9% in 2019 and 2020, respectively — dividends of 32.2p and 35.1p are projected for these years.

Consequently, the accommodation play sports chubby yields of 3.6% and 3.9% for this year and next. For those seeking big returns in the years ahead I reckon investing in this property stock is a much better place to deploy your investment cash than the buy-to-let sector.

The post Buy-to-let is becoming increasingly risky! I’d rather buy this FTSE 250 property stock 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.

If you’re clued up on this, and are looking for some last-minute buys to stash into your stocks portfolio, then I think you could do a lot worse than to buy into these FTSE 250 dividend heroes. Come take a look.

A defensive dynamo

Primary Health Properties (LSE: PHP) is a company in great shape to deliver strong profits, and thus dividend, growth in the near-term and beyond, I believe.

Why? As a major provider of healthcare facilities in the UK its services remain in high demand irrespective of the state of the economy. And because of the rapid ageing of the domestic population at the present juncture, City analysts are predicting handsome profits growth through the next couple of years at least. These bright forecasts mean that dividends are predicted to keep sweeping higher as well. A full-year reward of 5.6p is anticipated for fiscal 2019, a figure that yields a juicy 4.6%.

If you’re not convinced by Primary Health Properties’s investment case, though, a quick glance at its most recent financials might win you over. The business reported a 19% year-on-year improvement in EPRA earnings during 2018 which rose to £36.8m.

And following its planned all-share merger with MedicX — a move that will create an industry leviathan sporting 479 properties straddling the UK and the Republic of Ireland — the company will be even better placed to benefit from growing government investment in primary healthcare facilities.

A smart choice

Unite Group (LSE: UTG) is another FTSE 250 share that’s I’d very happily buy ahead of the forthcoming ISA deadline.

I can understand why the university accommodation provider might not be everyone’s cup of tea because of concerns over how Brexit will impact the flow of student numbers from abroad. The political hot potato that is immigration means that many big questions affecting the further education arena, like the future of the Erasmus cross-border study programme in the European Union, are still to be solved in the cauldron of Westminster.

I’m not too concerned, though. UK universities have been desirable places to study for centuries for students across the globe, and I cannot see how Britain’s status as one of the academic go-to destinations will either be compromised or dulled.

And nor can City analysts, certainly not in the medium term, who are expecting annual earnings at Unite to keep growing by double-digit percentages through the next couple of years at least. And with good reason. The business commented just this week: “Our strategy of aligning to the best universities and providing good-quality, value-for-money accommodation for resilient segments of the market reinforces our long-term confidence in the business.”

Reflecting its confidence, Unite hiked the full-year dividend 28% year-on-year to 29p per share, and the number crunchers are expecting another hefty upgrade in the current fiscal period to 33.4p. This projection yields a fat 3.7%, and I am confident that the firm can continue to offer up market-mashing dividends long into the future.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. 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.

On top of that, I’m worried that property prices have risen so far that they are much less affordable than they used to be a couple of decades ago. The affordability issue is a big one for me because it could mean that property prices are in for a decline, or perhaps a long period of stagnation so that affordability can catch up.

Big risks

Given the huge costs and inconvenience of getting into owning property for rental, I think the prospect of much-diminished overall returns is a big disincentive. I’m also concerned that those taking out a mortgage to go into buy-to-let now could end up in negative equity, with the value of the property slipping below the value of the mortgage. That would not be a happy situation to be in, and it would trap you in your investment unless you decide to take a loss on your investment – potentially a big one!

Just ask those who owned mortgaged property in the late 80s and through the 90s what the agony of negative equity feels like. Indeed, financial gearing because of a mortgage works to magnify gains as property prices rise, but it also multiplies losses if property prices fall. One question to ask is, are you sure you want a geared investment in anything? Borrowing money to invest increases your risk as well as your potential gains.

However, I do like the look of FTSE 250 company Unite Group (LSE: UTG), which owns and operates purpose-built and developed student accommodation in university towns and cities. The firm operates as a Real Estate Investment Trust (REIT), which means it will distribute at least 90% of its income to its investors. So REITs are a good way to tap into the earning potential of an underlying portfolio of property.

Ongoing potential to grow

Yet despite the focus on investor income, Unite’s share price has been performing very well too. It’s around 200% higher than it was five years ago, which reflects the firm’s ongoing expansion. If you’d invested five years ago, you’d be sitting on decent capital gains as well as a growing income from the dividend. And I think there’s potentially a lot more to come from the company.

Chief executive Richard Smith explained in today’s full-year report that the company’s strong financial performance is supported by the brand, the “sector-leading” operating platform, the quality of the portfolio of property, the “deep and valuable” university relationships the firm enjoys, and by sector fundamentals.

Unite posted a range of compelling figures today, but I think the fact that the directors pushed up the total dividend for the year by a whopping 28% speaks volumes about the firm’s performance. It seems to me that there is a high level of consistent demand for rented rooms in the university sector that could insulate the business to some extent from any future economic downturn. Meanwhile, the outlook is positive and the growth strategy is in full swing.

The post Forget buy-to-let! I’d consider this compelling property-backed share instead 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.

The student accommodation provider continues to thrive because of solid ‘digs’ demand from both domestic and foreign students. This was shown in trading commentary last month in which chief financial officer Joe Lister declared that “bookings for the 2019/20 academic year have started strongly with 67% of rooms already sold, with 57% guaranteed by nominations agreements at rental levels that are supportive of delivering rental growth in line with our target of 3.0-3.5%.”

The implications of Brexit on broader immigration is uncertain. But I’m not expecting it to have a devastating effect on student numbers from abroad, at least not in the short- to-medium-term. I think the FTSE 250 firm should still deliver strong shareholder returns for a little while longer at least. And a 3.7% forward dividend yield makes it look mighty attractive, too.

I own this!

So great is Britain’s need to build houses that I’d be happy to cling onto Ibstock (LSE: IBST) — a stock that I grabbed a slice of in the spring of 2017 — for at least another 10 years. I was tempted in by its big dividends and, as I type, the prospective yield stands at a titanic 6.1%.

Just how ineffective government housing policy has been to meet the accommodation of a growing population is no secret. Report after report reveals the scale of the problem and has led to the current Tory administration to pledge 300,000 new homes to be built per year by the middle of the next decade.

Ibstock’s bricks, then, look set to remain in strong demand. A mix of price improvements and rising volumes helped revenues rise 8% in 2018. And the opening of its Leicestershire mega-factory last July, a move that doubled production capacity, will put it in great shape to keep growing sales in the years ahead.

A Footsie favourite

GlaxoSmithKline (LSE: GSK) is another share I’d be happy to hold tightly onto for many years in the future. Indeed, given its position at the coalface of pharmaceutical innovation, it’s a share I can see delivering exceptional shareholder returns over the next 25 years, at least.

Medical care is one of things that we can simply not do without, obviously. Good health for us and our loved ones is the number-one priority, meaning that GlaxoSmithKline’s products keep flying off chemists’ shelves, irrespective of broader economic turmoil in certain regions. In fact, the FTSE 100 company’s global sales outlook is getting better and better as wealth levels in emerging markets rise.

The drugs giant saw constant-currency sales to developing regions rise 4% in 2018, it announced this week. I’m expecting its sales performance to pick up, too, following new chief executive Emma Walmsley’s vow to shake up GlaxoSmithKline’s strategy in exciting growth regions, such as Africa. I feel it’s a great blue-chip to pick up today, its appeal boosted by a giant forward dividend yield of 5.1%.

The post Three big-yielding dividend stocks I’d happily buy and hold for 5, 10 and 25 years appeared first on The Twelfth Magpie.

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Royston Wild owns shares of Ibstock. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. 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 company that’s benefited is FTSE 100 real estate investment trust Segro (LSE: SGRO), whose share price has doubled over the last five years.

In a trading update today, the company said that during the nine months to 30 September, it signed contracts for £52m of new rent. That’s 48% ahead of the £36.4m figure reported for the same period last year.

Looking ahead, the company has 891,000 square metres of property approved or under construction. Strong demand means that 71% of this has already been pre-leased.

Too hot to handle?

The logistics property sector is undeniably hot at the moment. One problem is that warehouses are often needed close to major cities, where land and property are in short supply. So when space does become available, it’s snapped up.

As investors, the question we need to ask is whether this situation can continue. I think it’s clear that this boom could still have further to run. But if people keep building, history suggests that at some point there will be too many warehouses. When that happens, the value of these properties will fall and vacancies will rise.

I prefer to invest in property stocks when they’re unloved and trading at a discount to book value. Segro doesn’t meet either of these requirements. Trading at 620p, the shares are priced at a small premium to their last-reported book value of 603p per share.

This strong valuation has pushed the stock’s 2018 forecast dividend yield down to just 2.9%. That’s below the 3% minimum I look for from big-cap stocks.

Although the firm’s finances still look healthy, I think the shares are starting to look quite expensive. I’d rate Segro as no more than a hold.

Studying for a profit

Another area of the property market enjoying strong demand is purpose-built university student accommodation. One of the big players in this sector is FTSE 250 firm Unite Group (LSE: UTG).

Like Segro, Unite’s share price has doubled over the last five years, as the company has reported consistent growth.

Last week, management reported that 98% of the group’s portfolio has been let for the current academic year, with rental growth on target at 3%-3.5%.

Unite’s focus is on “high and mid-ranked universities”, where demand should be most stable. To improve forward visibility on rent and occupancy, around 60% of its 50,000 bedrooms are now let under multi-year agreements with universities.

Should you buy Unite today?

The company plans to increase the size of its portfolio by a further 6,000 beds over the next three years. This seems reasonable to me, and I suspect student demand will remain strong. My only concern is that like Segro, Unite is starting to look expensive.

At the last-seen price of 842p, the shares trade at a 10% premium to their 761p book value. That’s not a problem if property prices keep rising, but it doesn’t provide any room for error if the market should slow, or profit margins fall.

For example, one potential risk is that Brexit could reduce demand from overseas students. Borrowing costs might also increase.

I like this business, but I don’t like the share price. For now, I’m going to leave Unite on my watch list and look for opportunities elsewhere.

The post Are you tempted by high-flying FTSE 100 REIT Segro? Here’s what you need to know 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.

Outstanding profits growth

In the article mentioned at the start of this piece, I specifically outlined the impressive progress that PageGroup is making in overseas territories. And I’m delighted to say in its core Europe, Middle East and Africa (EMEA) region — responsible for around 46% of group gross profits — the recruiter’s bottom line swelled by 20.9% at constant currencies in Q3.

Growth on a comparable basis in the Americas swelled by a jaw-dropping 30.1% year-on-year, while performance in its second-largest region of Asia Pacific couldn’t be described as sluggish either, profits here having jumped 27.7%. It even continues to perform resiliently at home despite continued uncertainty related to Brexit, and its UK division actually returned to growth during July-September with gross profits rising 0.8%.

And as a result of its all-round strength, PageGroup said that it expects operating profit for the full year “to be marginally ahead of consensus.”

While broker estimates have remained unchanged in the immediate aftermath of these fresh trading numbers, with earnings rises of 17% predicted for both 2018 and 2019, these forecasts are likely to receive a shot in the arm. PageGroup’s a hot buy right now and a low forward PEG reading bang on the bargain benchmark of 1 adds extra appeal.

5% dividend yields

It wouldn’t be a stretch to expect dividend predictions to be upgraded either, given the strength of PageGroup’s balance sheet (net cash, pre-dividends, bubbled to £122m as of September from £87m a year earlier). But at the moment the number crunchers are anticipating payouts of 26.3p and 29.2p per share for this year and next respectively, projections that still create monster yields of 4.8% and 5.4%.

Needless to say, I believe buying PageGroup is a better investment decision than sticking your money in a cash ISA given the paltry interest rates on offer from such products.

Another top FTSE 250 share that would be a better bet than a cash account is Unite Group (LSE: UTG), as Britain’s resilience as a go-to destination for students across the world makes the business a likely cert to deliver strong profits growth to shareholders too. Just last week the firm lauded the “continued strong demand for high quality student accommodation” here in the UK. 

Dividends have ballooned at Unite in recent years and, supported by predictions of profits growth of 15% and 13% in 2018 and 2019 respectively, City brokers expect payouts to keep climbing. The 28.6p per share payment predicted for this year would mark a significant upgrade from last year’s 22.7p, and it yields a chunky 3.3%. The dial moves to 3.9% for 2019 thanks to an expected 33.3p dividend too.

At current prices, Unite sports a prospective P/E ratio of 24.8 times. Toppy on paper, no doubt. But given the chances of strong and sustained profits, and thus dividend, growth, it’s still a terrific pick in my opinion.

The post Forget the cash ISA! These FTSE 250 dividend stocks will protect your savings much more effectively 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.