5 Tasty Smaller Cap Dividends: Ladbrokes PLC, Kier Group plc, KCOM Group PLC, Amlin plc And City of London Investment Group PLC

Could dividends from Ladbrokes PLC (LON: LAD), Kier Group plc (LON: KIE), KCOM Group PLC (LON: KCOM), Amlin plc (LON: AML) and City of London Investment Group PLC (LON: CLIG) boost your success?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Are you looking for exciting smaller-cap opportunities rather than boring old FTSE 100 companies? Here are five from the FTSE 250 and the FTSE Small Cap that are offering very attractive dividend yields, and which could suggest strong share price growth to come:

Ladbrokes

If you’re looking for a great potential dividend, look no further that the 7.2% forecast for Ladbrokes (LSE: LAD) after the shares fell 21% in the past year to 103p. With the the mooted 2015 payout not expected to be covered by earnings, there’s cause for caution, even if an 11% EPS rise expected for 2016 would improve things for that year’s predicted 7% yield. But it’s all down to the firm’s longer term potential, so how’s that looking?

Well, it looks uncertain right now after CEO Jim Mullen, in a Q1 update delivered today, said “I will complete my review of the wider business quickly and I will present some of the principal changes that I intend to make, in June, earlier than planned“, but that’s a dividend worth watching.

Kier

Shares of troubled construction company Kier Group (LSE: KIE) have recovered since the start of the year, but they’re still down 7% over 12 months to 1,633p. But we do have two years of dividend growth forecast, with yields of 4.7% and 5% forecast for this year and next.

The firm is building up some impressive projects, and has just been named the preferred bidder for a £170m regeneration development in the Ram Quarter, in Wandsworth, London, and I see no real risk to those attractive dividend prospects.

KCOM

Shares in KCOM Group (LSE: KCOM) have climbed 20% since January’s low, and we’re looking at forecast dividend yields of between 5.7% and 6.4% between now and March 2017, on a price of 94p. A recent pre-close statement told us that “trading remains in line with market expectations“, so I really don’t see any justification for KCOM’s low share price right now. Dividend cover is perhaps a bit thin at around 1.5 times, but the firm’s future in fibre broadband looks enviable.

Amlin

Are there any great undiscovered dividends to be had from insurance companies? The 6% yield forecast for Amlin (LSE: AML), on a share price of 468p, looks pretty tasty, and it should be covered around 1.4 times. The risk is that it that could be rebased in the same way as others in the sector, and with earnings expected to drop this year that can’t be discounted. But forecasts have been stable for some time, and we could be looking at a neglected bargain.

City of London

City of London Investment Group (LSE: CLIG) is up 36% over the past 12 months to 348p, but even after that we still have a forecast dividend yield of 6.9% for the year to June 2015, upped to 7.5% on 2016 forecasts. Cover would be stretched, so how’s the company doing? In its latest quarterly update, the company reported a 5% rise in funds under management, to $4.2bn, so there doesn’t seem to be any pressure on the dividend.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended KCOM Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

Is the S&P 500 going to 10,000 by 2030? This expert thinks so

One stock market strategist sees animal spirits taking hold and driving the S&P 500 index even higher by the end…

Read more »

Investing Articles

I’m expecting my Phoenix Group shares to give me a total return of 25% in 2025!

Phoenix Group shares have had a difficult few months but that doesn't worry Harvey Jones. He loves their 10%+ yield…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

14.5bn reasons why I think the Legal & General share price is at least 11% undervalued

According to our writer, the Legal & General share price doesn’t appear to reflect the underlying profitability of the business. 

Read more »