New stock: a UK business with a 35-year dividend history and 5% yield
This engineering group can trace its roots back nearly 200 years, but is continuing to invest in new growth opportunities.
I will be selling one of my portfolio shares at the end of March, due to a dividend suspension. While this isn't an automatic reason for sale, in this case I think there's a risk the recovery process could be slower and most difficult than expected.
I could be wrong, of course. But my hope is that the company I've chosen to to replace the departing share will be able to provide a reliable and attractive dividend yield, with the potential for long-term capital gains.
The company I'm adding to the portfolio hasn't cut its dividend for more than 30 years, during which time its annual shareholder payout has risen by an average of 6% per year.
It's a relatively capital-intensive industrial business and does not have the exceptional profitability of some of my companies.
However, I think the current valuation is attractive and could potentially support a total return of 8%-10% per year.
I'll be adding this share to my dividend portfolio at the start of April, in line with my usual quarterly trading schedule.
