Persimmon (H1 trading update)

Persimmon (LSE: PSN) is one of Britain’s biggest and most renowned housebuilders. It builds properties ranging from flats to large family homes located across the UK. The FTSE 100 firm is expected to provide a trading update for its most recent half-year performance ending June 2022 on Thursday 7 July.

Analysts in the UK don’t normally publish earnings previews for six-month periods, so it’s best to compare the firm’s upcoming 2022 first-half numbers to the ones from a year before. The H1 2022 figures can also be useful to determine whether it’ll outperform its FY21 numbers, or even beat analysts’ FY22 forecasts.

In this case, Persimmon is predicted to show slight growth in its numbers as housing supply continues to attempt to match high demand. If the housebuilder posts a better-than-forecasted number on Thursday with positive guidance, it could be on course to beat its financial year estimates.

Entain (H1 trading update)

Entain (LSE: ENT) is an international sports betting and gambling company. It owns brands such as Bwin, Coral, Ladbrokes, PartyPoker, and Sportingbet. Entain will provide a trading update for its most recent half-year performance ending June 2022 on Thursday 7 July.

Based on the earnings preview, Entain expects to have a much stronger second half to its financial year than its first. Nonetheless, a headline beat on its previous year’s H1 results could spell a positive outlook for the firm.

Vistry (H1 trading update)

Vistry (LSE: VTY) is another housebuilder that’s providing investors with a trading update. The Kings Hill-based firm will be updating shareholders on for its most recent half-year performance ending June 2022 on Thursday 7 July.

Just like its peer, Vistry is also expecting modest growth in its numbers. This is expected to come from rising house prices. The key metric to look out for will be its diluted earnings per share metric. A better than expected number could make analysts’ predictions of achieving a much higher EPS later this year possible.

The post Earnings preview: Persimmon, Entain, Vistry appeared first on The Twelfth Magpie.

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John Choong 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.

For companies other than those operating in the oil industry, sentiment has been extremely low in recent months. For example, the FTSE 350, which combines both the FTSE 100 and the FTSE 250, has dipped around 7% year-to-date and over 1% in the past year. But although my portfolio has felt the pain of this bear market, I’m continuing to buy stocks. I’m particularly favourable to dividend stocks right now, as they offer a strong source of passive income. With a healthy dividend yield, Vistry (LSE: VTY) is one of my personal favourites. 

What does the company do? 

Vistry is a housebuilder that was formed in 2019 from a merger between Bovis Homes and Galliford Try. As a builder, it has faced a turbulent past couple of years. Indeed, near the start of the pandemic, the company struggled with the Covid restrictions, as this caused sites to be shut down and estate agents to be closed. However, the firm has undergone a remarkable recovery since, driven by rising house prices. 

Indeed, in 2021, the group managed to report adjusted full-year profits before tax of £346m, up from £143.9 the year before. This was the result of rising house prices and an increase in house completions to over 6,500 from previous year figures of just 4,650. 

The group also noted strong demand during the first half of 2022, which should allow it to deliver full-year profits of around £415m. This demonstrates that the company is continuing to grow, despite the macroeconomic uncertainties. 

Reputation as a dividend stock 

Vistry’s excellent profits over the past year have allowed it to deliver excellent shareholder returns. For 2021, the company announced dividends equating to 60p per share. At the current Vistry share price, this equates to a yield of 7%. In comparison to other UK dividend stocks, this is very high. It has also implemented a share buyback programme of £35m. 

The dividend seems extremely sustainable as it’s covered twice by profits. This means that the firm has plenty of cash left over to reinvest, which can fuel further growth. With profits expected to rise this year, it also means that a dividend increase could be forthcoming. 

However, such a dividend rise isn’t guaranteed. For instance, due to rising inflation and interest rates, many believe that house prices are in line for a correction. Such a result would likely hurt Vistry’s future profits and restrict its ability to raise the dividend further. There’s even the potential that this could lead to a dividend cut, although this seems unlikely considering its current sustainability. 

What am I doing? 

Initially, I bought Vistry shares during the stock market crash of 2020. But after falling 30% in the last year, I believe that now is a great time for me to add more of this dividend stock to my portfolio. It currently trades at a price-to-earnings ratio of around 7 and at a 20% discount to its net asset value. This suggests to me that the recent sell-off has been overdone. 

The post A 7% yielding UK dividend stock I’m buying in the bear market appeared first on The Twelfth Magpie.

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Stuart Blair owns shares in Vistry. 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.

An energy company 

High energy and gas prices have been a severe issue for many households and companies over the past couple of months. But energy companies offer an exception, as they have, in fact, benefited. SSE (LSE: SSE) is a good example, especially after releasing an excellent set of results. 

For the year ending 31 March 2022, SSE managed to report adjusted profits before tax of over £1.5bn, 23% higher than the previous year. For the forthcoming year, the group also expects earnings to increase by another 25%.

These strong results have been accompanied by a strong dividend, which totals 85.7p per share. At the current SSE share price, this yields around 5%. Although this is not as large as other dividend stocks, this doesn’t bother me due to its sustainability. In fact, the total dividend totals less than £1bn, which is far less than the company’s current profits. 

There are some risks with SSE, however. For example, the government is planning on introducing a windfall tax for energy companies, which would likely hit the group’s profits. With a price-to-earnings ratio of around 17, SSE is also no bargain in comparison to some other energy stocks. For example, Shell has a P/E ratio of just 10. 

However, I still believe that SSE is a great buy. With the company heavily investing into renewable energy, I equally feel that it has a long-term future. This means that, for a great source of passive income, I may add some SSE shares to my portfolio. 

A housebuilding dividend stock 

Housebuilding companies have always offered strong dividends, yet after recent worries, they look more tempting than ever. For example, in the past year, Vistry (LSE: VTY) has sunk around 30%, yet the dividend has been raised in the same period. 

The firm’s results have also been very robust. For example, in 2021, the group managed to record adjusted profits before tax of £346m, up from £143.9m the year before. This was aided by strong demand for housing, which saw house prices rise. These strong profits also enabled the company to pay a total dividend per share of 60p, equating to a very healthy yield of nearly 7%. With a dividend cover of two, it is also extremely sustainable. 

The Vistry share price has still been struggling recently, however. Firstly, housebuilders have agreed to fix historic safety issues, and this is expected to cost around £3bn over the next 10 years. Vistry is likely to be affected by this. Further, house prices are widely expected to fall soon, especially considering the wider macroeconomic uncertainties. 

However, I already own Vistry shares, and I am tempted to add more of this dividend stock to my portfolio. With a price-to-earnings ratio of only eight, it looks overly cheap.

The post 2 quality UK dividend stocks to buy for passive income  appeared first on The Twelfth Magpie.

More reading

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

Stuart Blair owns shares in Vistry. 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.