Dunelm (LON: DNLM) & Tullow Oil (LON: TLW): 2 FTSE mid-cap shares to buy

Highlights

• Homewares giant Dunelm reported strong FY 2021 results and announced an ordinary dividend of 35 pence and a special dividend of 65 pence per share.
• Dunelm’s total sales swelled by 26.3 per cent to £1,336.2 million in FY 2021 from the previous year.
• Tullow Oil is set to report its FY 2021 results next week on 15 September.

Midcap stocks have always attracted investors with the features like good growth prospects, market share and opportunities to increase profit. These stocks are equally beneficial for portfolio diversification.

Here we are discussing two FTSE 250 listed stocks, which is the mid-cap index on the London Stock Exchange (LSE), Dunelm Group PLC (LON: DNLM) and Tullow Oil PLC (UK) (LON: TLW). Let us take an in-depth look at these stocks and see if it’s the right time to buy them:

1. Dunelm Group PLC (LON: DNLM)

Dunelm Group is a UK based homewares company. It reported its FY 2021 final results today, with total sales jumping by 26.3 per cent to £1,336.2 million in FY 2021, from £1,057.9 million in FY 2020 despite store closures due to strong sales growth is driven by digital sales.

The group declared an ordinary dividend of 35 pence per share due to confidence in its growth. It also declared a special dividend of 65 pence per share as the company had not paid out dividends in FY 2020 due to the pandemic, bringing the total FY 2021 dividend to 100 pence per share.

The group’s shares surged following the news, making it the highest riser on the FTSE 250 index in today’s trading session.

(Image Source: Refinitiv)

Dunelm’s shares were trading at GBX 1,423.00, up sharply by 10.65 per cent on 8 September 2021 at 11:02 AM GMT+1, while the FTSE 250 index was trading at 23,980.67, down by 0.49 per cent.

The company’s market cap is £2.606 billion, and it has given a year-to-date return of 17.07 per cent as of 8 September.

2. Tullow Oil PLC (UK) (LON: TLW)

Tullow Oil is an Africa, and South America focused independent oil and gas company. Tullow is scheduled to report its interim FY 2021 results on 15 September.

The company forecasted its FY 2021 capex guidance to be around US$ 250 million and full year oil production guidance of 59 kbopd in its most recent trading statement and operational update.

(Image Source: Refinitiv)

Tullow’s shares were trading at GBX 42.10, down by 0.43 per cent on 8 September 2021 at 09:56 AM GMT+1, while the fossil fuel sectoral index was trading at 5,082.56, down by 1.14 per cent.

The company’s market cap is £604.59 million and has a one-year return of 110.69 per cent as of 8 September.

Bottom Line

The UK retail sector is heading towards recovery as the economy has rebounded following a tough 2020 amidst store closures. Dunelm’s pivot towards click and collect offers using its digital channel helped push its FY 2021 results significantly. Income investors can consider investing in DNLM due to its dividend policy.

Tullow’s FY 2021 production guidance and over 100 per cent in 1-year returns indicates an optimistic outlook ahead of its results next week.

Investors can consider TLW if they are looking to bolster their mid cap exposure. Investors should also keep an eye on OPEC production output decisions due to ongoing global supply shortage impacting oil prices.