Dividend Stocks to Buy in September: If you’re looking for top dividend stocks to add to your investment portfolio, you’re in the right place. Every month, our team of expert freelance writers shares their insights on dividend stocks that are worth considering. In this edition, we present our top picks for September, each offering enticing opportunities for income investors.
British American Tobacco (LSE: BATS)
A Consistent Dividend Performer
British American Tobacco, a global leader in tobacco product manufacturing and sales, stands out as a reliable dividend stock. Currently, it offers investors an impressive yield of nearly 9%, placing it among the top payers in the FTSE 100.
While high dividend yields may sometimes raise concerns about sustainability, British American Tobacco has a remarkable track record of annually increasing its dividend payments. Last year, it witnessed a 6% jump in dividends, and with strong cash flows, this upward trend is likely to continue.
Challenges and Opportunities
The primary challenge faced by the company is the declining popularity of smoking as the world moves toward a ‘smoke-free’ environment. However, despite this trend, the tobacco industry remains substantial. Furthermore, British American Tobacco’s market dominance provides it with strong pricing power and cost-passing capabilities. The company has also been diversifying into non-cigarette products, further solidifying its position.
While there may be challenges on the horizon, the company’s growing diversification and steady income make it an attractive choice for dividend investors.
Hargreaves Lansdown (LSE: HL)
A Surprising Dividend Pick
Hargreaves Lansdown, known as an investment management company and one of the UK’s largest fund supermarkets, has recently emerged as an unexpected dividend gem. Traditionally seen as a growth stock, it now presents itself as an income option.
Despite a bumpy ride in the stock market over the past few years, including a 65% drop in share price over five years and 13.38% in the last 12 months, Hargreaves Lansdown offers a forward-looking yield of around 6%. This attractive yield is supported by strong free cash flow and a robust trading performance.
Competitive Landscape
However, it’s important to note that the investment management sector is highly competitive, which introduces some risks for shareholders. The company may need to adjust profit margins to remain appealing to customers. Nevertheless, its valuation is currently lower than in 2019, making it an appealing option for income-focused investors.
Tritax Big Box (LSE: BBOX)
A Solid Choice for Dividend Hunters
Tritax Big Box, a real estate investment trust, is a compelling option for dividend hunters. With a current yield of 5.3% based on analyst projections, it offers a significantly higher income potential than an index-tracking fund.
Despite near-term economic uncertainties and potential interest rate hikes, Tritax Big Box’s long-term investment case remains robust. The company owns assets crucial for storing and delivering products in the era of online shopping.
Long-term Resilience
As online shopping continues to grow, the demand for storage facilities like those owned by Tritax is expected to remain strong. While short-term challenges may affect growth plans due to higher borrowing costs, the company’s strategic position in the market makes it an appealing dividend stock for the future.
Conclusion
In September, these dividend stocks present compelling opportunities for income-focused investors. British American Tobacco’s consistent dividend growth, Hargreaves Lansdown’s surprising yield, and Tritax Big Box’s resilience in the face of economic challenges make them stand out in today’s market.
Before making any investment decisions, it’s crucial to conduct thorough research and consider your individual financial circumstances. Investing always carries risks, so it’s advisable to seek independent financial advice when needed.
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Disclaimer: The information provided in this blog post is for informational purposes only and should not be considered as financial advice. Please consult with a qualified financial advisor before making any investment decisions.