Premium content from Motley Fool Share Advisor UK
Our monthly Ice Best Buys Now are designed to highlight our teamâs three favourite, most timely Buys from our growing list of income-focused Ice recommendations, to help Fools build out their portfolios.
âBest Buys Nowâ Pick #1:
B&M European Value Retail (LSE: BME)
B&M continues to go from strength to strength in the quarter just ended. After falling in Q1 as the business lapped a tough comparative period revenue growth rebounded strongly to 6.3% in Q2.
That brought total H1 revenue growth up to a respectable 1.8%. While super-charged pandemic era profitability is ending, the business also remains hugely profitable for a retailer. Operating profits of £249m during the six months to 24 September represent an impressive margin of 10.8%.
In a competitive, generally low margin sector that level of profitability points to how adept management have been at maximising same store sales growth and keeping a tight lid on costs.
To date this industry-leading profitability has created a virtuous circle as higher profits allow for re-investment in further price competitiveness that leads to even more sales growth from cost-conscious customers.
Importantly as an Ice share, B&M provides an attractive level of income with the 2.6% yielding ordinary payout supplemented by semi-regular special dividends. With leverage already low going into the crucial a golden Quarter and management hinting that cash flow should be strong again, we expect another special dividend to be announced early next year.
B&M isnât dirt-cheap at about 16x trailing earnings. But with great growth prospects and huge cash flow that is being both re-invested to generate more growth and returned to investors, we think itâs worth taking a closer look at in December.
âBest Buys Nowâ Pick #2:
Redacted
Want All 3 âBest Buys Nowâ Picks? Enter Your Email Address!
I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.
The post Just released: our 3 best dividend-focused stocks to buy in December [PREMIUM PICKS] appeared first on The Motley Fool UK.
Should you invest £1,000 in B&M right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if B&M made the list?
See the 6 stocks
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
If I could buy just one FTSE stock right now, it would be this high flyer!
Are these 2 FTSE 100 companies recession-resistant?
3 growth stocks I’d buy to try and build wealth in a tough 2024!
2 FTSE 100 shares I’d buy in 2024 to hold for 10 years!
The Motley Fool UK has recommended B&M European Value Retail. Ian Pierce owns shares of B&M European Value Retail.
