I’m searching for the best low-cost UK dividend shares to buy today. Here are two on my watchlist.
Hochschild Mining
Having exposure to precious metals can be a great wealth preserver. Prices of these safe-haven commodities tend to rise during economic downturns. This in turn can help offset falls across the rest of an investor’s portfolio.
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But I’m not interested in buying physical metal. Nor am I attracted by the idea of buying a financial device like an exchange-traded fund (ETF) that tracks commodity prices. Neither of these investments provide income.
I’d much rather buy shares in Hochschild Mining (LSE:HOC). This way I can expect to receive a dividend on top of capitalising on increases in metal prices. In fact the dividend yield here sits at a healthy 3.1% for 2023.
I think now is an especially good time to buy the gold and silver produce. Prices of the metals it produces across The Americas have recently soared. Gold has moved back above $2,000 per ounce while silver has breached the important $25 barrier.
With these technical levels down, further massive gains could be around the corner. Falling bond yields, rising expectations of Federal Reserve rate cuts, and lingering worries over the global banking system could all push demand for flight-to-safety precious metals.
Today Hochschild Mining shares trade on a rock-bottom forward price-to-earnings (P/E) ratio of 11.7 times. I think the share is highly attractive despite the constant threat of production issues that could dent earnings.
Vistry Group
I’m also looking at upping my exposure to Britain’s listed homebuilders. At current prices some of these shares offer eye-popping value for money.
Take FTSE 250-quoted Vistry Group (LSE:VTY). The construction giant trades on a forward P/E ratio of 9 times. And it carries a corresponding dividend yield of 6.5%, far above the 3.3% index average.
The housing market is experiencing its biggest challenge since the 2007-08 financial crisis. Rising mortgage costs and the weak economic landscape have caused home prices to cool markedly from the stratospheric rises of recent decades.
However, the full-blown market meltdown that many have predicted is yet to emerge. In fact, most recent industry data shows that the homes market remains resilient.
Halifax announced on Friday that average property prices increased 0.8% in March, a result the building society said suggests “relative stability in the housing market.”
The data comes after a string of updates from the housebuilders that have indicated a tentative recovery in new-build demand. Vistry itself recently that “we have seen an improving trend on private sales in the first 11 weeks of the year.”
That said, I’m not convinced just yet to buy Vistry shares. As I say, I already own shares in the housebuilders. And the outlook is still far from encouraging at the moment.
Halifax also noted last week that annual price growth slowed to 1.6% in March from 2.1% the month before. This was the weakest rate of growth since autumn 2019.
I’ll continue keeping a close eye on the property market. And if data suggests a slump is unlikely I’ll look to buy Vistry shares to boost my passive income.
