I’m always on the hunt for dividend stocks with attractive yields. Given that the calculation of the dividend yield involves just the dividend per share and the share price, I can think smart in this regard. If the dividend per share has remained the same, but the share price has fallen, the dividend yield will have increased. With that in mind, here are two stocks trading close to 52-week lows that I think could be worth me buying.
Building homes and dividends
The first business I’m thinking of buying shares in is Persimmon (LSE:PSN). The UK-based homebuilder current has a share price of 2,445p. It hit 52-week lows a couple of weeks ago when it traded down to 2,321p. Even with the small bounce, the share price is down 10% over the past year.
In terms of dividends, it currently has a yield of 9.6%. This makes it one of the highest-yielding stocks in the entire FTSE 100. The recent move to fresh lows has helped to boost the yield, particularly over the past few months.
One of the main reasons for the recent fall has been concern over cladding remediation. It’s a complex issue as to who should foot the bill when it comes to replacing and renovating properties to bring them up to standard. If most of this falls on the builders such as Persimmon, it would take a hefty chunk out of profits.
Aside from this risk, I see reasons that are positive to consider buying shares in this dividend stock. The trading statement released a month ago showed good growth in new home completions. In 2021 the figure was 14,551, up from 13,575 in 2020. This helped to increase new housing revenue to £3.45bn, from £3.13bn the year prior.
The top dividend stock in the FTSE 100
The other dividend stock trading close to lows is Evraz (LSE:EVR). It made 52-week lows last week, hitting 410p. Over one year the share price is down 12.4%, but it has taken a hit of almost 30% in the past three months. Again, this is one reason why the dividend yield has popped considerably higher recently. It currently has the highest dividend yield in the FTSE 100 at just above 20%.
This seems a staggering yield, with warning sirens going off in my head. To be clear, this is a high-risk stock, so I’m only considering investing a small amount.
The main risk is its ties with Russia. The steel and mining company has operations in the country, along with other countries in eastern Europe. Given the situation with Russia and Ukraine, it’s clear why some investors want to stay well away from this dividend stock. Evraz also pays the dividend in US dollars, so there’s foreign exchange risk for a UK-based investor like myself.
Even with that being the case, a 20% yield is still hard to turn down. Evraz is performing ok, with 2021 production figures showing a decrease in steel but an increase in coking coal. It’s a mixed bag, but it has a clear dividend policy, so as long as overall figures hold up I don’t see why the company won’t continue to pay out income.
Jon Smith and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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