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While growth investing can have its perks, finding high-quality dividend stocks can also be exciting. Earning income from just holding stocks can help me achieve more financial stability. I’ve found two interesting companies that I’m starting a monthly investment in, so let’s dive deeper.
first of all Basic resources (LSE:BSE) paid a total dividend of $0.04 for the year ending June 2022. At current levels, that’s dividend yield 19.3%. From my research on the stock market, this is one of the highest returns I have come across.
However, it is important to note that the dividend policy may be changed in the future.
The African mineral sands company posted a profit of $279.1 million in the year ended June. In addition, the average selling price increased by 33%.
The business has strong free cash flow of $59.4 million and a cash balance of $55.4 million. This indicates that the company is in good shape to face any future challenges or expansion.
It should be noted, however, that any search operation carries the risk of obtaining smaller volumes than initial estimates.
However, Base Resources said last year that its production had improved markedly. The production volumes of rutile, ilmenite and zircon increased by 26%, 42% and 57%, respectively. As a potential shareholder, he promises stable growth in the mining industry.
secondly, Severfield (LSE:SFR) paid a total dividend of 3.1p for the year ending March 2022. This currently equates to a dividend yield of 5.46%. Although it is not as high as the income of basic resources, it is still competitive.
For the 12 months to 26 March, the structural steel firm reported a 11.09% rise in revenue to £403.6m. In addition, underlying operating profit was £26.9m from £25.5m in the previous year.
Despite this, the operating margin fell to 5.7%. This reflects the difficult working conditions at present, with wages and expenses inflation revelry
On the other hand, earnings per share (EPS) rose from 6.4p to 7.2p, underscoring the fact that Severfield is delivering for its shareholders year after year.
In addition, the company’s total dividend payout of 3.1p represents a 7% increase on the previous year.
Looking ahead, as a potential investor I am confident that the business will likely continue to perform at a high level. It has a £486m backlog of prospective orders, which includes future work on the new Everton Football Club stadium.
Overall, both of these companies appear to be in strong positions and improving results. There are, of course, problems. However, I think the business can overcome this in the long run. To this end, I will be investing £200 per month in these firms to make a profit.