6% Dividend Yield! I will buy 1 UK share in my ISA for 2023 | Daily News Byte

6% Dividend Yield!  I will buy 1 UK share in my ISA for 2023

 | Daily News Byte


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This year, Santa delivered many UK stocks with strong underlying businesses and attractive dividend yields.

I don’t have any spare cash to invest right now, though Moneysupermarket.com (LSE: MONY) is at the top of my watchlist.

Possibility of dividend going forward

The comparison/finance website has fallen out of favor with investors over the past two-three years and the share price has been in retreat.

My guess is that the market no longer sees the business as a fast-growing proposition and has down-rated the valuation. But that’s fine with me because I think the company is getting stronger in the London market instead. So the business may be able to deliver ongoing modest, steady growth. And that can lead to a gradually increasing shareholder dividend flow.

Finally, the firm has well-established brands viz Moneysupermarket.com For comparison and Money Saving Expert For consumer finance. and directors calculate the company’s proprietary comparison techniques “Provide flexibility as well as high barriers to competitive entry”. It therefore suggests that competitors may find it difficult to gain market share from the business.

A multi-year financial and trading record looks supportive and indicates that the business has a strong position in the market. The company managed to continue paying dividends through the pandemic. And it was a severe test of the strength of any business with many failing and cutting off their payments.

But MoneySupermarket’s earnings and cash flow are holding up very well. And City analysts predict revenue, earnings and dividend growth ahead.

Trade ahead of expectations

The company made the announcement in its October third quarter trading update Growth ahead of expectations in the quarter” And directors raised their guidance for the year.

Chief executive Peter Duffy said the company’s brands could help consumers through the current cost-of-living crisis. But I think a lot of people like me use company comparison sites in good times and bad.

And as long as the fundamentals look good, investing in what we know can be a good idea. And I know what MoneySupermarket’s service can do for me as a customer. Meanwhile, it’s good to see a strong balance sheet and dividend yield running above 6%. I think it is attractive and could make a useful addition to my diversified long-term stock portfolio.

However, I could be wrong even though I see an attractive situation with MoneySupermarket now. All stocks have risks as well as positive potential. And businesses can face operational challenges at any time. For example, a firm’s proprietary comparison technologies may prove to be less protective than the company thinks.

However, I would be inclined to accept the risks and lock in that high yield by buying some shares now in my Stocks and Shares ISA.

We will know more about trading progress when the company reports its full-year results on 15 February 2023.

Post 6% Dividend Yield! I’ll buy 1 UK share in my ISA for 2023 appeared first on The Motley Fool UK.

Further reading

Please note that tax treatment depends on each client’s individual circumstances and may change in the future. The content in this article is provided for informational purposes only. It is not intended to be, nor does it constitute, tax advice of any kind. Readers are responsible for conducting their own due diligence and seeking professional advice before making any investment decisions.

Kevin Godbold has no position in any of the shares mentioned. Motley Fool UK recommends Moneysupermarket.com Group Plc. The views expressed on the companies mentioned in this article are those of the author 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.

Motley Fool UK 2022


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