Dividend underpins next move up27 Mar 2022 14:35
27 March 22
Motley
Dividend shares to buy today
The first company on my list is the financial services group TP Icap (LSE: TCAP).
At the time of writing, shares in this enterprise offer a dividend yield of 8.9%. According to City analysts, the yield could rise to 11% next year.
This business specialises in trading financial instruments for clients around the world, a model that can reap significant rewards when volatility surges. Indeed, the company’s operating profits have bounced over the past couple of years as market volatility has jumped.
Unfortunately, rising costs have weighed on the firm’s bottom line. This pressure is expected to dissipate over the next two years. As costs fall away, analysts are expecting profits to jump to £175m by 2023. That is up from £67m for 2019.
With profit rising, the company should be able to afford to return lots of cash to investors.
That being said, this is a highly competitive market. Plenty of firms are trying to edge in on TP Icap’s turf. As such, I cannot take its growth for granted. Higher costs and additional regulatory headwinds could also hit growth at the group.
Despite these risks, I reckon this is one of the best dividend shares to buy today, and I would add it to my portfolio.