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Highlights
- The volatility in the stock market has further escalated due to the ongoing Russia and Ukraine war.
- Dividend stocks may seem not attractive in short term but have the potential to generate a great return in the long term as it generates sizable passive income that can grow by reinvestment and protect against market volatility.
The volatility in the stock market has further escalated by the ongoing Russia and Ukraine war after two challenging years due to the pandemic. The stress is more due to the rising global inflation. Investors are trying to look for ways to make most of this situation. Some investors have shifted their investment to cash or gold, whereas some are holding off on making decisions on how to use their ISA allowance of £20,000 before the deadline of 5 April for the tax year 2021/2022.
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With the Bank of England prediction that UK inflation could hit over 7% in April, investment in stocks may be your only chance of keeping pace with the rising cost of living. You may consider investing in shares offering good dividends for the tax year 2021/2022 as the dividend allowance is set at £2,000, while you don’t have to pay tax on dividends from shares in an ISA. ISA stands for Individual Savings Accounts.
Dividend stocks may seem not attractive in short term but have the potential to generate great returns in the long term as it generates sizable passive income that can grow by reinvestment and offer protection against market volatility, thanks to compounding.
Let us look at five FTSE-listed stocks, including Ferrexpo Plc, Rio Tinto Plc, M&G Plc, Persimmon Plc, and CMC Markets Plc for ISA next fiscal, i.e., 2022-23.
Ferrexpo Plc (LON: FXPO)
The Swiss-based commodity trading and mining company’s current market cap stands at £1,097.78 million as of 1 April 2022. The company has recently announced the expansion of humanitarian funds to US$7.5 million to support local communities of Ukraine that are closed to its operations.
The miner is an FTSE 250 constituent, with earnings per share of 1.08. The company’s average dividend per share stands at 20.2% and its five-year average dividend yield stands at 4.9% as of 28 March 2022. However, the company’s share value has depreciated by -47.97% over the last one year and its year-to-date return stands at -34.90% as of 1 April 2022.
Ferrexpo Plc’s shares were trading at GBX194.30, up by 4.18%, at 4 PM (GMT), on 1 April 2022.
Also Read: Tesco, M&S, Next: Retail stocks you may consider despite fall in sales
Rio Tinto Plc (LON: RIO)
The world’s leading metals and mining business, Rio Tinto Plc’s, market cap stands at £75,964.81 million as of 1 April 2022. The company recently made a US$2.7 billion offer to acquire a 100% stake in Turquoise Hill Resources that controls Oyu Tolgoi, which is expected to be one of the largest copper mining operations in Mongolia. The company currently holds a 51% stake in Turquoise Hill.
The miner is an FTSE 100 constituent, with earnings per share of 13.03. The company’s average dividend per share stands at 9.7% and its five-year average dividend yield stands at 6.1% as of 28 March 2022. However, the company’s share value has appreciated by 11.94% over the last one year and its year-to-date return stands at 27.00% as of 1 April 2022.
Rio Tinto Plc’s shares were trading at GBX 6,212.00, up by 2.15%, at 4 PM (GMT), on 1 April 2022.
2022 Kalkine Media®
M&G Plc (LON:MNG)
Global investment manager M&G Plc’s current market cap stands at £5,747.46 million as of 1 April 2022. The company announced a share buyback programme to purchase ordinary shares of 5 pence each for up to a maximum consideration of £500,000,000.
The investment manager is an FTSE 100 constituent, with earnings per share of 0.44. The company’s average dividend per share stands at 8.2% and its five-year average dividend yield stands at 9.0% as of 28 March 2022. However, the company’s share value has appreciated by 6.32% over the last one year and its year-to-date return stands at 10.53% as of 1 April 2022.
M&G Plc’s shares were trading at GBX 220.70, down by 0.23%, at 4 PM (GMT), on 1 April 2022.
Persimmon Plc (LON: PSN)
British housebuilding company Persimmon Plc’s current market cap stands at £6,690.93 million as of 28 March 2022. The company has recently announced strong final results for FY2021 with increased revenue to £3.61 billion, up from 3.33 billion in FY2020. The housebuilder has built 14,551 new homes in FY2021, with an average selling price of £237,078.
The housebuilding company is an FTSE 100 constituent, with earnings per share of 2.00. The company’s average dividend per share stands at 11.2% and its five-year average dividend yield stands at 8.2% as of 28 March 2022. However, the company’s share value has depreciated by -26.80% over the last one year and its year-to-date return stands at -24.65% as of 1 April 2022.
M&G Plc’s shares were trading at GBX 2,152.00, up by 0.05%, at 4 PM (GMT), on 1 April 2022.
Also Read: Lloyds, HSBC, Standard Chartered: Stocks you may look at this week
CMC Markets Plc (LON:CMCX)
Financial services company CMC Markets Plc’s current market cap stands at £738.80 million as of 1 April 2022. The company offers online trading in shares, spread betting, contracts for difference and foreign exchange across world markets and has recently launch its share buyback programme of up to £30 million, in which the maximum aggregate number of shares that will be repurchased is 29,071,747 ordinary shares.
The financial services company is an FTSE 250 constituent, with earning per share of 0.62 The company’s average dividend per share stands at 8.9% and its five-year average dividend yield stands at 5.6% as of 28 March 2022. However, the company’s share value has depreciated by -47.72% over the last one year and its year-to-date return stands at -4.17% as of 1 April 2022.
CMC Markets Plc’s shares were trading at GBX 253.50, down by 0.39%, at 4.10 PM (GMT), on 1 April 2022.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
