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I'm looking for the best high dividend yield stocks to buy in October. More specifically, I look for companies whose returns exceed the Footsie's 3.6% forward average.
Here are three of my favorites from the FTSE 100 and FTSE 250 indexes.
SOCIMI of Urban Logistics
Real estate stocks can be a great way to generate long-term passive income. They often have tenants locked into long-term contracts, which (barring some corporate catastrophe) means they enjoy a steady stream of income that they can then distribute to shareholders.
Real estate investment trusts (REITs) can be especially good real estate stocks for dividends. In exchange for tax advantages, these companies must pay at least 90% of its annual income from rentals to shareholders.
Please note that tax treatment depends on each client's individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any type of tax advice.
UK investors currently have around 50 REITs to choose from. One of my favorites is Urban Logistics (LSE:SHED), thanks in part to its mammoth forward dividend yield of 6.2%.
I also like Urban Logistics for its focus on warehouses and distribution centers. It is well positioned to capitalize on themes such as the growth of online shopping and changes in supply chain models.
I think the stock is worth considering, even though high interest rates continue to weigh on current earnings.
Bank of Georgia Group
Investing in emerging markets can be a risky business. This is no better demonstrated than by Bank of Georgia Group (LSE:BGEO), whose share price decline reflects political uncertainty in the Eurasian country.
The back-and-forth between lawmakers could have significant adverse implications for Georgia's economy and, by extension, its banks. I would argue, however, that this is reflected in the current very low valuations of these companies.
Bank of Georgia, for example, now trades on a forward price-to-earnings (P/E) ratio of three times.
Given that the company also has a 7.7% dividend yield for 2024, I think it could be a great dip buy.
Today, things continue to look good for the bank and its domestic rivals. Demand for loans is increasing and looks set to continue to do so as personal wealth levels improve. Bank of Georgia's expansion in Armenia also provides it with additional opportunities to increase its profits.
M&G
With an anticipated dividend yield of 9.9%, M&G (LSE:MNG) is set to be one of the FTSE 100's biggest dividend payers this year.
It reflects the company's cash-rich balance sheet, not to mention its long-standing commitment to delivering market-beating payouts. The company's Solvency II capital ratio was 210% in June, 7% more than the previous year.
As an asset manager, M&G is very sensitive to movements in the financial markets. Therefore, issues such as the recession in the United States and the continued economic slowdown in China represent threats to the company.
However, as a long-term investor I remain very optimistic about the company. As the British population ages and financial planning increases, I think M&G can win tons of new business in the coming years, helped by its strong brand.
