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I am looking for the best low cost UK dividend stocks to buy today. Here are two on my watch list.
Hochschild Mining
Having exposure to precious metals can be a great preserver of wealth. Prices for these safe haven products tend to rise during economic downturns. This, in turn, can help offset declines in the rest of an investor’s portfolio.
But I’m not interested in buying physical metal. I also don’t like the idea of buying a financial device like an exchange-traded fund (ETF) that tracks commodity prices. None of these investments provide income.
I prefer to buy shares of Hochschild Mining (LSE:HOC). This way I can expect to receive a dividend Above capitalize 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 gold and silver products. The prices of the metals it produces in America have skyrocketed recently. Gold has risen back above $2,000 an ounce, while silver has broken the important $25 barrier.
With these low technical levels, more massive gains could be just around the corner. Falling bond yields, rising expectations of Federal Reserve rate cuts and lingering concerns about the global banking system could fuel demand for safety-seeking precious metals.
Today, Hochschild Mining shares are trading with a minimum forward price-earnings (P/E) ratio of 11.7 times. I think the stock is very attractive despite the constant threat of production issues that could hurt earnings.
Vistry Group
I am also thinking of increasing my exposure to UK listed homebuilders. At current prices, some of these stocks offer excellent value for money.
Take FTSE 250 listed Vistry Group (LSE: VTY). The construction giant operates with a P/E ratio of 9 times. And it has a corresponding dividend yield of 6.5%, well above the index average of 3.3%.
The housing market is experiencing its biggest challenge since the financial crisis of 2007-08. Rising mortgage costs and a weak economic outlook have caused home prices to cool markedly from the skyrocketing rises of the past few decades.
However, the total market collapse that many have predicted is yet to come. In fact, the most recent industry data shows that the housing market remains resilient.
Halifax announced Friday that median property prices rose 0.8% in March, a result the real estate society says suggests “relative stability in the housing market.”
The data comes after a series of updates from homebuilders that have indicated a tentative recovery in demand for new construction. Vistry himself recently that “we have seen an improving trend in private sales in the first 11 weeks of the year.”
That being said, I’m still not sold on buying Vistry stock. As I say, I already have shares in the home builders. And the outlook is still far from rosy right now.
Halifax also noted last week that annual price growth slowed to 1.6% in March from 2.1% the previous month. This was the weakest growth rate since the fall of 2019.
I will continue to keep a close eye on the real estate market. And if the data suggests a dip is unlikely, I’ll look to buy Vistry shares to increase my passive income.
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