Insider: directors lock in 9% dividend yield

After sinking to a multi-year low following a trading update, this investment chief decided it’s time to buy.

by Graeme Evans from interactive investor

Buyers of 9.3% yielding Assura 

AGR

 Buyers of 9.3% yielding Assura AGR
were last week joined by the healthcare landlord’s own investment chief after he spent £39,000 on shares at a decade low price

Thursday’s purchase by Steven Noble took place as long-term government bond yields set a post-2008 high to put further pressure on the appeal of real estate investment trusts.

His dealings at 36.6p followed a third-quarter update in which Assura flagged its strategic progress since a landmark deal increased exposure to the private healthcare sector.

The update also highlighted Assura’s strong position to support government policy that continues to shift more towards community healthcare and reliance on private providers.

This follows the £900 million of funding for GPs announced in December and an additional £100 million of committed investment to upgrade the GP estate.

FTSE 250-listed Assura has a £3.2 billion portfolio of more than 600 healthcare buildings, from which over six million patients are served.

Its annual rent roll stands at £176.9 million, about a quarter of which is now private healthcare after August’s acquisition of Northwest’s 14 private hospitals for £500 million.

The tenants are all major hospital operators in the UK, comprising mainly Nuffield Health, Spire Healthcare and Circle Group. The assets benefit from an average rent cover of 2.3 times.

The deal represented 2024’s second strategic development by Assura after May’s announcement of a £250 million joint venture with the Universities Superannuation Scheme.

With an initial portfolio of seven assets valued at £107 million, the venture will invest in assets let to the NHS or GPs and is seeking to reach £250 million within three years.

For Assura, this arrangement provides a further new source of funding as it looks to diversify into sectors at scale so that it targets growth in the right market at the right time.

An asset disposal programme launched alongside the hospital acquisition raised £48 million from 17 properties in the third quarter, with active discussions on a further £110 million.

The completed disposals mean Assura is on track to reduce its loan-to-value ratio to below 45% and net debt to earnings to below nine times over the next year to 18 months.

Operationally, it reported positive progress on rent reviews after 59 were settled in the quarter with an uplift of £600,000 or 7.2%. About a fifth of the rent roll is due for review in the first quarter of the next financial year.

Deutsche Bank, which has a price target of 48p, said that Assura was making “some headway”.

Stifel added that shares are “very undervalued”, pointing out that the 9.3% dividend yield is fully covered by recurring earnings and materially higher than undiversified peer Primary Health Properties.

It added: “Assura offers operational excellence and a portfolio that is able to grow across several healthcare property sub-sectors, driving superior earnings growth.”

Last week’s purchase of shares by Noble was his second since joining the company in September in the newly created role of chief investment officer. He also bought £100,000 of stock at 38.6p in November, which compared with the 47p share price at the start of 2024 and 69p in 2022.

Peel Hunt highlighted a price target of 45p in November but said that its preferred pick remained Primary Health Properties, partly due to income security resulting from government backing over 89% of the rent roll versus Assura’s 66%.

Thursday 16 January

Invesco Bond Income Plus Ltd ex-dividend date
Invesco Global Equity Income Trust PLC ex-dividend date
JPMorgan China Growth & Income PLC ex-dividend date

The average UK house price has risen from £1,884 in 1953 to a staggering £265,240 in the 4th quarter of 2024. Using data from Nationwide Building Society.

Plus you had somewhere to live, without paying rent.

Looking for ISA dividend shares? 2 passive income heroes to consider today

If broker forecasts are correct, these top UK dividend shares could provide ISA investors with a large and growing passive income.

Posted by

Royston Wild

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

Buying dividend shares can be a great way to grow one’s Individual Savings Account (ISA).

The cash rewards from high-yield dividend stocks can be used to buy lots more shares. This in turn can lead to exponential potential growth over time thanks to the mathematical miracle of compounding.

With this in mind, here are two top dividend shares I think are worth serious consideration.

The PRS REIT

Dividends from share investing can fluctuate wildly according to broader economic conditions. So given the uncertain outlook for 2025, now could be the time to consider buying dividend payers in defensive sectors.

The PRS REIT (LSE:PRSR) is one stock that could prove a wise buy. As a major build-to-rent specialist — it has more than 5,400 residential homes on its books — rent collection remains stable at all points of the economic cycle.

Furthermore, Britain’s ongoing housing shortage means it doesn’t have to seriously worry about falling occupancy that would impact profits.

There’s another good reason I think the firm’s an attractive dividend share to consider. Under real estate investment trust (REIT) regulations, it must pay a minimum of 90% of annual profits from its rental activities out in the form of dividends. This is in exchange for certain tax breaks.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

For this financial year (to June 2025), PRS REIT offers a 4% dividend yield. This is ahead of the 3.6% and 3.4% averages for the FTSE 100 and FTSE 250 indexes respectively.

And for financial 2026, predictions of dividend growth drive the yield to 4.2%.

Not even residential property stocks are completely risk free. A particular problem for PRS REIT could be if interest rates remain at or around current levels, dampening asset values and impacting borrowing costs.

But on balance, I think the FTSE 250 company is worth a close look.

Pan African Resources

A bright outlook for gold prices means Pan African Resources (LSE:PAF) also demands serious attention, in my opinion.

In sterling terms, gold struck fresh record highs last week. On a US dollar basis it also reached new multi-week peaks. I believe prices are likely to continue climbing as macroeconomic and geopolitical worries — exacerbated by US President Trump’s words on trade tariffs and foreign policy — drive demand for safe-haven assets.

Investors have a multitude of UK precious metal stocks to choose from to capitalise on this. Those seeking dividends may wish to consider Pan African Resources, a mid-tier gold supplier in South Africa.

Predicted dividend growth over the short term means the miner’s dividends are a chunky 4.4% and 7.7% for the next two financial years (to June 2025 and 2026).

Of course there’s no guarantee that gold prices will continue rising. They could fall for a variety of reasons, for instance if the US dollar strengthens or the economic landscape improves.

Yet even if these affect Pan African’s earnings, the business still looks in good shape to pay those large predicted dividends. Payouts are covered between 3.1 times and 3.9 times by anticipated profits, comfortably above the safety benchmark of two times and above.

££££££££££££££

But as always, as it’S your hard earned best to DYOR.

The Results Round-Up: The week’s investment trust results

First results of the New Year are in! BlackRock Income & Growth (BRIG), the quickest of the blocks with an +18.1% NAV return for the year. Chrysalis (CHRY), next with a +4.9% full-year NAV per share increase. Miton UK Microcap’s (MINI) third in, although its latest Half-year Report could well be its last – the Board has decided that the fund is now too small to be viable.

By Frank Buhagiar

BlackRock Income & Growth (BRIG) excited for the year ahead

 BRIG, the first of London’s investment companies to issue results in 2025. And a decent set of full-year numbers it was too: net asset value (NAV) per share came in at +18.1%, comfortably ahead of the FTSE All-Share Index’s +16.3%. The investment managers put the outperformance down to good stock picking, particularly in the financials sector – standout performers included 3i Group, Standard Chartered, NatWest and Intermediate Capital Group.

Despite the strong year, the investment managers see scope for further progress. That’s because “The UK stock market continues to remain depressed in valuation terms relative to other developed markets offering double-digit discounts across a range of valuation metrics.” If that’s not enough, the managers also highlight the market’s 3.7% dividend yield. So, “Whilst we anticipate economic and market volatility will persist throughout the year, we are excited by the opportunities this will likely create; by seeking to identify the companies that strengthen their long-term prospects as well as attractive turnaround situations.” The strong full-year performance wasn’t enough to prevent a 3.8% share price decline on the day of the results though. Mr Market, a demanding master at times.

Winterflood: “Share price TR +13.2%, as discount widened from 8.7% to 12.9%. Managers expect economic and market volatility to persist throughout the year, with potential for attractive ‘turnaround’ opportunities.”

Chrysalis Investments’ (CHRY) year of significant change

CHRY reported a +4.9% increase in NAV per share for the year thanks to higher valuations for some of the portfolio’s biggest holdings, notably Starling and Klarna. Overall performance would have been even stronger but for a write down in the holding of wefox. Much better showing from the shares which were up +50% during the year resulting in the share price discount to net assets shrinking from 54% to 34%.

Not bad given there’s been a lot going on at the growth capital investor. As Chair Andrew Haining notes “The year to 2024 has seen significant change for your Company, both in the way that it is run, and also in market sentiment surrounding its portfolio holdings.” The former refers to a change in investment adviser “I am delighted to say that this process has been seamless” and presumably the launch of the Capital Allocation Policy that is focused on “balancing shareholder returns with long-term growth”. The latter, meanwhile, a nod to “the return of some positivity in the stock market for ‘growth assets’ and thus an improving outlook for similar investments in private markets” as evidenced by recent realisations from the portfolio. The Chair is hoping the improved sentiment will result in “a successful IPO of Klarna this year.” Shares unchanged at the time of writing. Investors adopting the wait-and-see approach.

Liberum: “CHRY comes off a very strong Q4 2024, driven by better sentiment towards growth capital, the Graphcore and Featurespace realisations, a high-impact buyback programme to date, and Klarna moving closer to IPO. Ongoing implementation of the capital return programme and Klarna’s expected IPO in 2025 is the next key catalyst. We are BUYers with a 122p TP, reflecting a 20% discount to our 12M NAV forecast.”

Numis: “CHRY has committed to return an initial £100m to shareholders, with 25% of net profits on realisations returned thereafter. The results include commentary on the direction of the company, with the board highlighting the potential risks of a ‘de-facto wind down’. Therefore, it is considering how to balance future returns of capital beyond the existing capital allocation programme against risk factors such as increased portfolio concentration and reduced scale, which it believes may result in the discount widening again.”

Miton UK Microcap’s (MINI) valedictory results?

MINI’s latest Half-year Report could well be its last. That’s because redemption requests of 40.4% of the company’s issued share capital were received during the most recent annual redemption opportunity. This meant MINI’s market cap has fallen to a very mini-looking £20m. No surprise then that the Board has decided MINI is too small to remain viable and is looking at winding up the fund. As Chairman Ashe Windham writes, “This is my valedictory Chairman’s statement. The Company is now at a size which some investors consider to be too small from a liquidity perspective, particularly given the increasing demand from investors for larger listed funds.” The persistent and material share price discount to net assets was also cited. For the record, adjusted NAV per share fell 7.6% (including dividends re-invested) over the half year. So no going out with a bang then. Shares opened lower on the day too. The market perhaps awaiting more details on the proposed wind-up.

Winterflood: “The fund has received a proposal from Premier Miton regarding a rollover option into one of Premier Miton’s open-ended funds, which the Board is evaluating. It is expected that a cash exit alternative will also be offered. The winding up of the fund will be subject to shareholder approval and further announcements will be made in the coming weeks.”