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4 dividend shares I’d consider buying before the election

Tezcan Gecgil, PhD
Scene depicting the City of London

Britain goes to the polls in less than a month and investors are wondering how the election outcome may affect their stock portfolios. When we have more clarity after the election, the markets are likely to take a calmer view in anticipation of a new (or nearly new) government. And if history is any guide, we may even have a possible post-election relief rally. Therefore, today I’d like to discuss four shares that you may want to consider for your pre-election shopping list.

Bunzl

Distribution and outsourcing group Bunzl is a FTSE 100 bellwether. It supplies disposable products, such as paper cups, cutlery, napkins, food packaging films, till rolls, gloves, bandages, and hard hats for various markets including foodservice, retail, grocery, healthcare and safety.

The company operates in four geographical areas. North America is the the most important region where almost 60% of profits come from. Next is the UK and Ireland, followed by continental Europe and the rest of the world.

So far 2019 has not been a great year for Bunzl shareholders. However, the recent weakness in price may also make it an opportune time to buy into the shares. The stock goes ex-dividend on 14 November and the interim dividend payment amount is 15.5p per share.

Centamin

This autumn, investing in gold miners may add some sparkle to your portfolio. In the first half of 2019, many gold miners saw their share prices pop as global gold prices also surged higher. Yet there has been some profit-taking in recent weeks, which may be of interest to some of our readers.

Are there any miners I think are worth backing? After doing due diligence, you might consider FTSE 250 gold mining company Centamin, which is focused on the Arabian-Nubian Shield.

This mid-cap stock with a market capitalisation of £1.3bn has a robust balance sheet with no debt. With a current dividend yield of almost 4.75%, CEY has a good history of returning a large share of free cash flow to investors semi-annually. The shares went ex-dividend as of 29 August. The next ex-dividend date is expected in April 2020.

DS Smith

Packaging giant DS Smith is the next company on my list. Many of our readers may know it as one of the world’s largest makers of cardboard boxes. I’d also like to highlight their recyclable packaging business, especially as consumers become increasingly concerned over the use of plastics.

On 31 October, management released a half year pre-close statement. Miles Roberts, group chief executive, said: “We remain excited by the medium-term underlying drivers of demand for our sustainable corrugated packaging and our leading offerings for FMCG and e-commerce customers give us confidence of volume and market share growth going forward”.

The shares offer a dividend yield of 4.6% and are next expected to go ex-dividend in April 2020.

Morrisons

FTSE 100 member Morrisons is one of the largest supermarket groups in the country. Although its domestic counterparts have been suffering, especially in the face of disruptive competition from Aldi and Lidl, Morrisons’ management has been taking various steps to put the group on the path to success. 

The company also provides food deliveries to Amazon‘s UK Prime and Pantry customers, a partnership which I find quite important for the future of Morrisons’ shares. 

Its current dividend yield stands at 3.8% and the stock is likely to go ex-dividend in May 2020.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. tezcang owns shares of Morrisons. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended DS Smith. 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.

Motley Fool UK 2019