Dividend kings going cheap in stock-pickers paradise

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Dividend kings going cheap in stock-pickers paradise

Investors are breathing a sigh of relief after the torrid times last week, with European equity markets rallying this morning. Buying the dip has been a very difficult call in recent days, with every attempt at engagement punished in subsequent market moves, so investors will be hoping that this is a genuine buying opportunity.

The key event of the week is US Consumer Price data on Wednesday, with investors anxious to determine whether the inflation fears that have helped to drive recent market moves have been overdone or if these concerns are justified.

The widespread contagion has seen almost all stocks suffer, irrespective of their underlying fundamentals, so the current rally is a stock-pickers paradise, with the opportunity to pick up potential bargains.

Income stocks may be particularly attractive for long-term investors, with some of the big UK FTSE (UKX) stocks including oil majors BP (BP.) and Shell (RDSB) and telecoms giants Vodafone (VOD) and BT (BT.A) currently delivering dividend yields of over 6%, which is potentially enticing for buy and hold income investors.

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Barclays (BARC) is underperforming against the sector, but still in positive territory after today's Serious Fraud Office decision to charge the bank with unlawful financial assistance.

Barclays bank had been hoping to negotiate a deal to avoid these charges, which have already been brought against the parent company and previous executives, but the news, although unwelcome, is not altogether unexpected, hence the muted market reaction.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.