Today I’m searching for the best UK dividend stocks to buy. I think the following two could help me make big returns for years to come.
In top health
I consider Primary Health Properties’ (LSE: PHP) to be an very-safe place to park my money. The healthcare facilities like GP surgeries that it lets out remain in high demand whatever the weather. Estate agency Savills says that some 307m doctor appointments are booked every year. In fact I expect the need for its services to rapidly rise as Britain’s population booms and demand for medical care increases.
At the same time the number of doctor surgeries is falling due to closures and mergers. And this is pushing rents at the likes of Primary Health Properties steadily higher. Savills notes that the number GP bases dropped a shocking 13% between 2013 and 2020. I like Primary Health’s plan to boost earnings through steady expansion, though I’m cautious that problems on this front (like overpaying for an asset) could hit shareholder returns.
Primary Health Properties’ ultra-defensive operations have given it the strength and the confidence to raise dividends every year for almost a quarter of a century. City analysts are expecting another meaty hike in 2022, too, resulting in a decent 4.5% dividend yield.
A great e-commerce stock
Urban Logistics REIT (LSE: SHED) is another property stock I’m considering adding to my portfolio. It’s similar to another couple of stocks I already own today in Tritax Big Box REIT and Clipper Logistics. This business owns close to 100 warehouse and distribution properties and is watching demand for its assets balloon as e-commerce grows. I think its 4.2% forward dividend yield makes it a top dividend stock to buy right now.
Like Primary Health Properties, Urban Logistics operates in a market where supply is limited and rents are leaping. And I like that the healthcare specialist is committed to acquisitions to maximise its revenues opportunities. The firm raised £250m via an equity raise just a month ago to fuel its expansion programme. And it’s already forked out £28.2m of this to snap up four new assets in Leicester, Sheffield, Northampton, and Dundee.
Urban Logistics is a specialist in ‘last mile’ logistics and as I say it stands to gain significantly from the online shopping craze. Latest data from Adobe showed Brits spent £94bn online in the first 10 months of 2021, up 12% year-on-year. Knight Frank estimates that around 1.4m square feet of warehousing space is required for every £1bn worth of e-commerce sales.
Like any stock, Urban Logistics isn’t without risk of course. Some of its tenants in other sectors could suffer if broader economic conditions worsen. And this could have an impact on rent collection. Still, it’s my opinion that the exceptional long-term opportunities created by the online shopping boom makes this property stock too good to for me to miss adding to my portfolio.
