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Just released: the 3 best dividend-focused stocks to buy right now [PREMIUM PICKS]

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Our monthly Ice Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Ice recommendations, to help Fools build out their portfolios.

“Best Buys Now” Pick #1:

B&M European Value Retail (LSE:BME)

  • B&M’s latest trading update showed increasingly value-conscious shoppers are flocking to the discounter, with its UK like-for-like sales up 6.5% year on year over the Christmas quarter and total revenue up 12.3%. 
  • Price hikes to counteract inflationary pressures will account for a good deal of that growth, but it was good to see management also note an increase in gross margins, which suggests good news further down the income statement given B&M’s traditionally tight controls over operating costs. 
  • It’s tough to predict how consumer spending will hold up in the quarters ahead, but B&M’s focus on providing value for money that has served it well in previous economic downturns should provide some solace to investors in these turbulent times. 
  • The company’s trailing 16.5p ordinary dividend equates to a hearty 3.7% yield at present. But add in the additional 20p per share special payout due in February and that yield jumps to 8.1%. Now, investors shouldn’t count on special dividends continuing to be an annual occurrence, but B&M’s board remains committed to returning excess cash to shareholders when they deem leverage has fallen too low.

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