We asked our freelance writers to share the highest dividend-paying stocks they would buy in April. Here is what they chose:
Royston Wild: Redrow
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The ultra-low valuations of London-listed homebuilders, however, seem at odds with the resilience of the industry. The past does not guarantee that housing demand will remain strong as interest rates rise. Yet I think that risk is more than priced into the stock price of most homebuilding stocks.
I believe the FTSE 250 is quoted red row (LSE:RDW) is one of those brilliant dividend-paying stocks. Today the company – which updated its medium-term earnings forecast in February – is trading futures PER ratio of only 5.6 times. It also offers a significant 6% yield at recent prices.
Royston Wild does not own shares in Redrow.
Stephane Wright: BP 8% Cumulative 1st preference
I’m taking a slightly different theme with my top UK dividend stocks for April. the BP 8% Cumulative 1st preference (LSE: BP.A) actions catch my attention. Preferred stocks work slightly differently than common stocks, but Warren Buffett is a big fan of them. And I think this one might be a winner.
The shares pay a fixed dividend of 8p/share. It is important to note that the company must pay the full dividends to its preferred stockholders before it can pay dividends to its common stockholders. For an investor looking for income, I think the added protection of preferred dividends might be welcome.
Stephen Wright does not own shares in BP Cumulative 1st Preference 8%.
Roland Head: Synthomere
FTSE 250 Chemical Group Synthomere (LSE: SYNT) caught my eye recently. I think it could be an attractive dividend investment at current levels.
Synthomer benefited from a boom in demand for latex gloves during the pandemic, but is now returning to a more sustainable and diverse product sales mix.
Although I see some risk associated with management changes and the integration of a recent acquisition, I think the fundamentals look solid.
Synthomer offers a forecast dividend yield of 5.5% for 2022. I think it should generate steady growth over the medium term.
Roland Head does not hold shares in Synthomer.
Paul SummersTaylor Wimpey
My highest dividend stock for April is Taylor Wimpey (LSE: TW). Currently, the homebuilder is down to return 7.5% in cash in FY22. This makes it one of the most productive stocks on the FTSE 100.
Of course, the potential for oscillation in the currently booming UK property market cannot be ignored. With a valuation of only seven times expected earnings, however, I would say the market has already priced that in. The revenue stream is also likely to be covered almost twice by the expected profits. Staying diverse is vital but I would be happy to buy today.
Paul Summers has no position in Taylor Wimpey.
Andrew Mackie: BP
My exceptional dividend action for April is BP (LSE: BP). While its 4.3% yield is certainly not the most generous, that figure masks the true magnitude of shareholder returns.
Buybacks of $4.15 billion have already been announced from excess cash flow in 2021. Additionally, the company has pledged to return 60% of annual cash flow through buybacks. He estimates that if oil averages $80, it will equate to $7 billion. Although the forced sale of Rosneft will probably have an impact on this figure.
It also has the ability to increase the dividend by 4% per year, at an average oil price of $60. Today Oil is above $100 and I expect it to stay high for some time to come.
Andrew Mackie owns shares of BP.
Harshil Patel: Imperial Marks
My highest dividend stock for April is Imperial Marks (LSE:IMB). This well-established consumer brand offers a hefty dividend yield of over 8%. This beats the average FTSE 100 return of 3.5%.
It also has an impressive dividend track record, having consistently paid income to shareholders for more than 25 years.
Imperial is in the early stages of a multi-year transformation plan. Business transformations always involve risk. That said, it can afford some margin for error, as this dividend-paying stock trades on a price-earnings ratio of just 6x. Looks super cheap to me.
Harshil Patel does not own shares of Imperial Tobacco.
Alan Oscroft: Direct Line Insurance Group
Direct Line Insurance Group (LSE: DLG) is my April pick among income stocks. The insurance industry could be risky as we face rampant inflation and a possible recession. But I find Direct Line’s 8.2% return forecast tempting.
I fear that the dividend is probably barely covered by earnings. But there seems to be money to pay for it. In March, the insurer announced a share buyback worth up to £100m, to reduce its share capital.
This has an added benefit in that it should help boost earnings per share and support future dividends.
Alan Oscroft does not hold any position within the Direct Line Insurance Group.