I’m searching for high-dividend shares to add to my portfolio in June. Here are two on my radar today.
Assura
Primary healthcare property providers like Assura (LSE:AGR) have tremendous investment potential. As the UK population steadily ages, footfall in facilities like GP surgeries and diagnostics centres is predicted to increase strongly.
Facilities like this are expected becoming increasingly important given the huge strain on the NHS. In a recent report CBRE Group said “primary care will become an important part of delivering healthcare services” in light of record-high NHS waiting lists.
The property services group expects primary care rents to increase in 2023. This should “enable and encourage third-party development, to meet increasing demand and deliver on NHS ESG strategies.”
These are long-term trends I think could deliver sustained profits growth at the likes of Assura. As the graph below shows, serious health conditions that require treatment are rising across the board.
Condition prevalence rates in England. Source: CBRE Group, NHS Digital QOF Framework
High build-cost inflation is an issue for companies like this. And there is a possibility this could prove a prolonged problem. But I still believe the potential benefits of owning primary healthcare operators such as this outweigh this problem.
As a dividend investor I’m especially attracted to Assura. Its classification as a real estate investment trust (or REIT) mean it has to pay at least 90% of annual rental profits out in the form of dividends.
For this year the firm carries a mighty 6.8% dividend yield. I expect it to deliver market-beating dividends for years to come.
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Rio Tinto
FTSE 100 business Rio Tinto (LSE: RIO) is another high-yield dividend share on my radar today. I opened a position in the mega miner back in summer 2022. And I’m thinking of adding more shares to my portfolio following recent price weakness.
At today’s prices the company offers a 7.8% forward dividend yield. And it also trades on a forward price-to-earnings (P/E) ratio of just 8.1 times.
Concerns over near-term commodities demand have driven Rio Tinto’s share price southwards in recent months. And they will intensify should key data from China and the US continue to be disappointing.
But this doesn’t concern me as an investor. I buy UK shares based on the returns I expect to receive over the long haul. And I expect the firm to deliver exceptional capital gains and dividend income over this kind of time horizon.
The world is on the cusp of another major commodities supercycle. Urbanisation rates are increasing in emerging markets, and spending to upgrade creaking Western infrastructure is increasing. Investment in renewable energy is taking off and consumer spending on electronics and electric vehicles is on the rise.
The result is that Rio Tinto can expect demand for its copper, iron ore, aluminium and other raw materials to rise strongly in the coming decades. And the business has considerable balance sheet strength to exploit this opportunity through acquisitions and upgrades to current mines.
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Pound coins for sale — 51 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
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Royston Wild has positions in Rio Tinto Group. The Motley Fool UK has 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.