In two recent pieces in the Stockopedia Academy, I suggested some simple StockRank-based screening approaches to find good quality dividend growth and high-yield stocks.
In this piece, I’m going to take a look at some examples of shares from these screens that I think could be interesting opportunities today. I’ve selected 10 in total – five for high yield and five for dividend growth.
As always, these are only my thoughts, not recommendations. Please DYOR and form your own views before making any investment decisions.
5 dividend growth stocks
Here’s a quick reminder of the screening criteria I used to help create a shortlist of dividend growth stocks for further research. You can see (and copy) the screen here.
TI Fluid Systems (LON:TIFS) - yield 4.1%
This British engineering group has a long and illustrious track record in the automotive industry. It’s a leading manufacturer of thermal management and fluid-handling systems for cars, notably fuel systems.
However, TI suffered a spell in private equity ownership from 2015-2017 and has struggled since its return to the UK market – not helped buy a notable debt burden.
The business has also been forced to face up to the need to diversify its product range, in order to reduce its historic dependence on fossil-fuel powered cars. Fuel systems generated about half the group’s profits last year.
This turnaround is still underway, but I’m encouraged by progress – 43% of new order bookings related to electric vehicles last year.
From a dividend perspective, last year’s strong cash generation supported debt repayments and a useful 6.8p per share payout, giving a 4% yield.
The shares remain modestly valued on a forward P/E of 6. If the company can deliver on its plans, I think there could be an attractive dividend growth opportunity here.
Ultimate Products (LON:ULTP) - yield 4.2%
This housewares group – whose brands include Beldray and Salter – floated on the London market at around the same time as TI Fluid Systems. It also suffered a post-IPO slump but has since been a much more successful investment.
One reason for this might be the presence of owner management in…
