These UK income stocks look too cheap to miss at current prices. Should I buy more of them for my investment portfolio today?
Taylor Wimpey
Housebuilders like Taylor Wimpey (LSE:TW) continue to offer excellent all-round value. Well, at least that’s how it looks on paper.
This particular FTSE 100 share trades on a forward price-to-earnings (P/E) ratio of 11.7 times. Meanwhile its dividend yield for 2023 clocks in at a mighty 7.3%.
By comparison, the broader FTSE index trades on a prospective P/E ratio of 14 times and carries a 4% dividend yield.
Having said that, I’m not tempted to buy more Taylor Wimpey shares just yet. I believe the passive income they provide could disappoint in the near term as the UK housing market struggles. Blue-chip rival Barratt Developments on Wednesday slashed its interim dividend by 9%.
But I’ll be looking to add to my holdings if additional green shoots emerge for the housebuilding industry. In yesterday’s half-year report Barratt said that “reservations have shown a modest uplift since the start of January” thanks to an improvement in mortgage rates and improved optimism concerning future interest rates and energy costs.
I believe the long-term outlook for Britain’s housebuilders remains robust. Demand for new homes will inevitably rise as the domestic population grows. So Taylor Wimpey shares remain on my radar, and especially at current prices.
Spire Healthcare
I’d be happy to buy more Spire Healthcare (LSE:SPI) shares for my investment portfolio, though. And I’ll be looking to build my stake if I have cash to spare.
This income stock is on a roll as NHS waiting times head through the roof and demand for private medical care soars.
Latest official data showed that 7.2m people are now awaiting treatment on the free health service. The number could remain elevated for some time as staff shortages worsen too.
A survey by the Medical Defence Union indicates that 40% of doctors and dentists are planning to quit the NHS by 2028. This could drive even more patients through the doors at businesses like Spire.
I don’t think this huge opportunity is reflected by Spire’s current share price, though. The FTSE 250 business — which reported an 34% rise in self-pay patient numbers between in the first half of 2022 — trades on a price-to-earnings growth (PEG) ratio of just 0.2.
This is well below the benchmark of 1 that indicates a share is undervalued.
Okay, dividend yields at the hospital group aren’t quite as impressive. For 2023 this sits at just 1.3%. But Spire could be a great buy for investors seeking strong and sustained dividend growth following its pandemic-related difficulties.
The annual payout is tipped to rise 88% in 2023 and by a further 24% next year. Higher NHS investment could harm long-term earnings growth at Spire. But right now things are looking positive for the healthcare giant.
