- Inflation levels declined last month, but the rising cost of living continues to be relentless.
- In such a situation, dividend stocks could be good investment options.
Inflation in the UK has registered the sharpest decline in the past 16 months, hitting 10.7% in November from 11.1% in October. The latest numbers on inflation from the Office for National Statistics came on Wednesday and indicated that the momentum behind the soaring prices of groceries and fuel might be easing.
The decline was bigger than what was expected by analysts. However, the rise in the cost of living continues to be relentless. While the inflation levels eased last month, it is important to note that the prices it still rising, albeit a litter slower than before. Many look at the latest inflation figures as a sign that it has peaked.
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In the year to November, food and drink prices jumped 16.4%. Particularly, dairy and egg prices have witnessed a sharp jump. There are projections that food prices will continue upward in the run-up to Christmas owing to the more expensive imports caused by the growing packaging and transportation costs.
Despite the decline in inflation, there are wide expectations that the Bank of England will go for another hike in interest rates to control inflation and eventually bring it under its 2% target. Economists believe that inflation will stay in double digits into next year.
In the wake of this news, let's look at some London-listed companies that have offered good dividends to shareholders.
Persimmon (LON: PSN)
The British housebuilding company is a constituent of the FTSE 100 index and has a market cap of £4,013.90 million as of 15 December 2022. Its stock price has slumped by more than 55% in the past year, and the EPS is at 2.47. The stock has yielded a dividend of 18.7% (LTM). Shares of the company traded at GBX 1,245.00, down 0.96% as of 8:12 am GMT on Thursday.
Synthomer Plc (LON: SYNT)
The FTSE 250 constituent is in the business of chemicals. With a market cap of £634.18 million, the stock has yielded a dividend of 15.7% (LTM). Its EPS stands at 0.48 as of 15 December 2022, while the one-year return is -66.36%. SYNT shares were trading 1.99% lower at GBX 133.00 as of 8:16 am GMT on Thursday.
Pollen Street Plc (LON: POLN)
The alternative investment management firm belongs to the FTSE All-Share index. It presently holds a market cap of £340.31 million, and the dividend yield stands at 15.1% (LTM). The stock has given shareholders a negative return of -43.58% over the past year. As of 8:20 am GMT, the stock price stood at 530.00.
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.