I don’t have limitless reserves of capital to spend on UK shares. But here are two FTSE 250 dividend stocks I’m aiming to buy in 2023 with cash to spare.
The world is becoming increasingly digitalised. This leaves huge opportunities for private and state-sponsored hackers to exploit in the future.
Just today Ukraine announced that cyberattacks had jumped threefold in the past year. This follows a massive cyberattack last week at Royal Mail that stopped it sending parcels overseas.
Businesses and organisations are having to spend increasing sums to protect themselves from online attacks. This could make NCC Group (LSE:NCC) one of the hottest growth stocks out there as demand for software escrow services soars.
In short, such services involve storing the source code and data that allow essential applications to run. This means that companies can continue operating efficiently even in the event of a cyber incident.
NCC is a share I’ve added to my watchlist following recent trading news. The IT giant said in November that constant currency revenues at its Global Assurance division continue rising by double-digit percentages. I added that “this growth is accelerating” as the financial year progresses, too.
As a potential investor I’m also encouraged by NCC’s ambitious expansion strategy. Last month it secured £162.5m in fresh borrowing facilities to fund organic and inorganic investment. This should further boost sales opportunities in its fast-growing market.
City analysts think earnings will rise 18% in the 12 months to May 2023. They predict solid growth further out as well (annual rises of 12% and 11% are forecast for financial 2024 and 2025 respectively).
NCC operates in a highly competitive industry. And this presents a risk to future earnings. But I still think the business should still deliver excellent long-term returns, driven by robust cybersecurity market growth.
This is thanks in part to the company’s ultra-defensive operations. It lets out primary healthcare facilities, the sorts of properties that are in constant use during all points of the economic cycle. So even as the UK experiences a downturn, the rents Assura receives — which are also backed by government bodies — should keep on rolling in.
I believe the FTSE 250 business could provide me with an excellent second income over the long term, too. This is because demand for healthcare facilities looks to be on course to grow strongly as the country’s elderly population steadily swells.
Under REIT rules, Assura is required to pay at least nine-tenths of annual profits out in the form of dividends. As a consequence the firm carries bulky dividend yields of 5.6% and 5.8% for the financial years to March 2023 and 2024 respectively.
I’d buy the REIT for my portfolio despite the threat that NHS policy changes could pose to future profits.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended NCC. 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.