Stocks with dividend appeal are becoming more attractive to me as inflation rises, which is why I’m focusing on the investment potential of Barclays PLC (LON:BARC) (BARC.L), AstraZeneca plc (LON:AZN) (AZN.L), Unilever plc (LON:ULVR) (ULVR.L), Imperial Brands PLC (LON:IMB) (IMB.L) and Persimmon plc (LON:PSN) (PSN.L).
Barclays may not seem like a very appealing income stock at the moment. However, its dividend payments are forecast to double next year, and this puts the stock on a prospective dividend yield of 3%. With dividend headroom being high, the company could raise them at a fast pace beyond next year, and this may lead to Barclays becoming a more valuable income stock in the long run.
AstraZeneca is one of my top picks in the pharma sector. I feel its investment in its drugs pipeline could help it to deliver improving profitability as well as a higher dividend in future. AstraZeneca has a 4%+ dividend yield at the moment and its defensive profile could mean its dividend payments are relatively resilient. Therefore, I feel it could be a sound income investing buy for the long run.
Unilever is one of my top picks in the consumer goods sector. While it yields around 3% at the moment which is the same rate as inflation, its dividend payments are forecast to rise 10% next year. Beyond then, more dividend growth could be ahead as the company may benefit from rising demand for its products in the emerging world. Therefore, Unilever could offer income investing appeal.
Imperial Brands has experienced a difficult year so far. Its shares have been relatively unpopular among investors, with the wider tobacco industry also losing its shine in the eyes of some investors. However, with the company investing heavily in reduced risk products, I feel its growth outlook remains positive. With a 5%+ dividend yield, I think Imperial Brands has income potential.
Persimmon is one of my top picks in the housebuilding sector. The company’s dividend return plan works out as an annualised yield of around 4% at the moment. The resilience of the company’s payouts may be higher than the stock market is pricing in, with Persimmon having a large net cash position. It could therefore perform well in a variety of market conditions, which would be good news for long term investors.