Two dividend stocks I’m looking to snap up the next time I have some spare cash are British Land (LSE: BLND) and Land Securities (LSE: LAND). However, I’m conscious that dividends are never guaranteed and are paid at the discretion of the business.
It’s worth noting that both stocks are set up as real estate investment trusts (REITs). This means they make rental income from property assets and must return 90% of profits to shareholders.
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Furthermore, due to macroeconomic headwinds, property stocks have slumped. However, my long-term view is that they should bounce back. On that note, these two stocks look attractively priced for me to buy now, which I view as an added bonus!
British Land
British Land specialises in commercial property assets in the UK. It owns, manages, and rents out offices, industrial spaces, and retail properties.
Over a 12-month period, British Land shares are down 15% from 404p at this time last year to current levels of 342p.
At present, the share valuation looks good to me. A price-to-book ratio of 0.5 indicates the shares could be undervalued. Remember a reading of lower than one can be considered good value for money.
Moving on to the returns, British Land’s dividend yield of 6.7% is higher than the FTSE 250 average of 1.9%. However, the firm does have a slightly chequered record of payouts prior to the pandemic. Since then it has bounced back and provided consistent returns.
The primary risk for British Land is that of its net value of property dwindling due to higher interest rates. Analysts reckon we’re nearing the height of rates so once they come down, the values should recover. In addition to this, it’s harder to grow a portfolio of properties when rates are higher.
Overall, British Land shares look like a great opportunity for me to boost my passive income.
Land Securities
Land Securities is actually the largest commercial property development group in the UK. The shares are trading for 618p as I write, which is pretty much where they were at this time last year, at 620p. However, since February, the shares have dropped 16% from 743p to current levels.
Land Securities does have interests in residential properties. This could be a double-edged sword. Rental demand is higher than ever due to higher interest rates so shorter-term performance could soar. Once market volatility cools, could this arm of the business suffer as people are able to obtain mortgages once more? I’ll keep an eye on this closely. However, the business is diversified enough to be able to perform well and provide returns, in my eyes.
Speaking of returns, a dividend yield of 6.2% is extremely attractive to me. Plus, a trailing 12-month price-to-earnings ratio of 12 makes the shares look good value for money too.
To conclude – despite a turbulent economic picture at present – Land Securities looks to be performing resiliently. It could take off once volatility subsides in the longer term.
