This dividend stock's yielding 5.5% but its directors have sold nearly 15m shares this month!
Brickability Group's (LSE:BRCK) a distributor of construction materials (not just bricks) and has built (excuse the pun) a reputation as a dividend stock. And with earnings growing strongly I'm sure shareholders will be hopeful that its payout will continue to rise.
On 24 April, the group released a pre-close trading update stating that revenue for the year ended 31 March (FY25) is expected to be 7% higher than in FY24. Also, adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is forecast to be 11% better.
Some of the improvement is due to its specialist cladding and fire remediation division delivering projects ahead of schedule. This is a shift of turnover between accounting periods rather than new business. But the group said there was 'good momentum in trading' more generally.
Within a week of this announcement, the group's share price had risen 15.5%. But its shares are now changing hands for only fractionally more than before the news was released. It means nearly all of the benefit to shareholders from its FY25 results being ahead of expectations has been lost.
So what's going on?
A quick look at the company's other stock exchange announcements is revealing. On 13 June, Alan Simpson, a non-executive director (NED), and Sarah Simpson, a close associate, reduced their combined stake from 11% to 7.23%. The shares fell nearly 6% when this news was announced. The amount received hasn't yet been disclosed but it's likely to be around the £7m mark.
And two days earlier, the managing director of Brickability's Distribution division sold 3m shares and another NED offloaded 1m. These sales realised proceeds of £2.07m and £690,000 respectively.
Of course, I've no idea why these individuals have decided to reduce their stakes in the company. Everyone has different financial circumstances and I don't think it's unreasonable to 'cash out' at some stage. After all, you can't spend shares. But whatever the reasons, these sales aren't a good look.
These senior managers are going to miss out on generous levels of passive income. Based on amounts paid over the past 12 months, the stock's currently (20 June) yielding 5.5%. The FTSE AIM All-Share index is offering 2.27%.
We don't yet know what the final dividend for FY25 will be but it looks as though it's likely to be higher than it was in FY24. If so, it means the group will have increased its annual payout for four consecutive years.
But the group's relatively small. As its listed on the Alternative Investment Market (AIM) with a market-cap of just under £200m, it doesn't have the financial firepower to cope with a sustained downturn in the UK construction industry.
And even though I'm sure there are perfectly valid reasons for the directors' share sales, they're likely to dent investor confidence.
But the group has lots going for it. Revenue and earnings are heading in the right direction and the green shoots of a recovery are starting to show in the housebuilding sector. Also, the UK cladding 'scandal' is providing plenty of opportunities for further work.
For these reasons, when combined with a healthy 5%+ yield, investors could consider adding the stock to their portfolios.
The post This dividend stock's yielding 5.5% but its directors have sold nearly 15m shares this month! appeared first on The Motley Fool UK.
More reading
5 Stocks For Trying To Build Wealth After 50
One Top Growth Stock from the Motley Fool
James Beard has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
Motley Fool UK 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Starmer Faces Brewing Rebellion Over £5 Billion Benefit Cut
(Bloomberg) -- UK Prime Minister Keir Starmer is less than 10 days away from the biggest parliamentary challenge to his authority in his not-yet year-long tenure. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown Unpopular cuts to disability benefits unveiled earlier this year as part of Chancellor of the Exchequer Rachel Reeves' efforts to balance the country's books are due before the House of Commons for their first vote on July 1, with a large-scale rebellion brewing on the Labour back benches. So far, at least 150 of the governing party's Members of Parliament have indicated concerns about the cuts in two letters to the government. Other non-signatories have told Bloomberg they also intend to vote against the bill. While Starmer's attention this week was centered on the escalating tensions in the Middle East, the domestic threat was laid bare on Thursday when Vicky Foxcroft, a government whip who would have been tasked with helping quell the revolt, quit, citing her own objections. The rebellion threatens to bruise Starmer's and Reeves' credibility and further damage their stock with the left of their party. In order to avoid falling to what would be an unprecedented defeat for a government enjoying such a large majority so early in its tenure, ministers could at worst be forced into major concessions that reduce the bill's expected cost savings, forcing the Treasury to conjure up money from other cuts or tax rises at the budget in the fall. 'It's a test of Starmer's authority and the way he and Rachel Reeves are running the economy,' Tim Bale, professor of politics at Queen Mary University London, said in a phone interview. 'If the rebellion is too big, you start to run into questions about the loyalty of your backbenchers and even perhaps the future of your leadership.' The welfare reforms allowed Reeves to save about £5 billion ($6.5 billion) a year by 2030 by making it harder for disabled people to claim a benefit called the personal independence payment, or PIP. The chancellor factored them into a spring statement as part of spending cuts designed to help meet her self-imposed fiscal rules. Reeves says the changes are necessary because an extra thousand people a day have been signing on for PIP, creating an 'unsustainable' impact on the public finances. PIP payments had been projected to almost double to £41 billion by the end of the decade, within overall spending on disability and incapacity benefits that the Office for Budget Responsibility — the government's fiscal watchdog — sees rising to £100 billion from £65 billion last year. The government has also says there is a moral case for supporting people back into work. But Labour lawmakers are concerned the government announced changes in a rush to deliver savings, without thinking through the impact on vulnerable people. 'There are alternative and more compassionate ways to balance the books, rather than on the backs of disabled people,' one Labour backbencher, Debbie Abrahams, told the House of Commons. There are particular concerns about a new requirement for claimants to score four or above in one of the daily living components of the PIP assessment, meaning people who can't wash half their body or cook a meal will be denied the payments if they have no other impairments. One Labour MP describing the process as letting the OBR tail wag the government dog. Some 45 Labour MPs signed a public letter objecting to the measures, while another letter — arranged in secrecy so that even signatories couldn't see who they were joining — garnered 105 signatures and was sent to the chief whip. While some of the would-be rebels have indicated they could be swayed by the government whips, one of them told Bloomberg they are confident that more than 80 MPs will commit to voting against the government. Given Starmer's working majority is 165, if all opposition parties vote against the bill, it would take 83 Labour rebels to defeat the government. The main opposition Conservative Party is planning to vote against the changes, Danny Kruger, one of the party's work and pensions spokespeople, told parliament in May. Its reasons are different: the Tories argue the measures don't go far enough. One Labour MP told Bloomberg that concerned lawmakers plan to put forward a procedural challenge to the bill. While they don't expect the speaker to select that amendment for debate, the aim is to force further changes from the government, and organize would-be Labour rebels into a coherent group which could eventually vote down the bill. Many in Labour had been waiting to see the bill before making up their minds. When the text was published on Wednesday, the concessions to their concerns were minimal, largely amounting to a 13-week transition period for those losing their PIP. Foxcroft — the whip who had previously served for four years as Starmer's shadow disability minister in opposition — quit within hours of the publication, saying she didn't believe cutting the disability benefits should be part of the solution to tackling ballooning welfare costs. Culture Secretary Lisa Nandy said Friday that Foxcroft's resignation wasn't a sign of a major rebellion, while conceding that 'of course' there are dissenting voices on such a big reform. 'Vicky is the only front-bencher that I've had a conversation with about resigning,' she said. Nevertheless, many so-called 'red wall' Labour MPs in northern and central England face a tough decision. Health Equity North, a public health institute, found that all the places most affected financially by the PIP reforms are Labour constituencies in northern England. In several areas, the number of people affected by the welfare changes exceeds the Labour majority, meaning those MPs could see a crucial drop in support. The government is gearing up for a fight, indicating it will make no further concessions. On Wednesday, Deputy Prime Minister Angela Rayner failed to rule out stripping the whip from Labour rebels, while government enforcers are warning MPs that their political career prospects will be ruined if they oppose the bill. Whips and wannabe rebels alike expect the potential revolt to be whittled down as July 1 approaches. Some opponents are weighing whether to abstain at the second reading and wait until the third reading to take a more decisive vote, as whips are encouraging them to do. 'I'd be amazed if he were defeated here,' Anand Menon, director of the UK in a Changing Europe think-tank, said. 'If the whips got a whiff they were going to get defeated, they'd give some concessions. The worst of all outcomes is to lose this.' Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Should You Really Buy Stocks With the S&P 500 Near Its Record High? Warren Buffett Has Excellent Advice for Investors.
The S&P 500 has rebounded to within 3% of its record high despite elevated valuations and uncertainty surrounding tariffs. Warren Buffett has advised investors to be fearful when others are greedy, and greed appears to be driving the stock market today. Warren Buffett has also advised investors to pounce on buying opportunities when quality stocks trade at sensible prices. These 10 stocks could mint the next wave of millionaires › The S&P 500 (SNPINDEX: ^GSPC) declined 19% earlier this year, but the index has since recouped most of its losses. The S&P 500 is currently less than 3% below its record high despite widespread economic uncertainty. S&P 500 companies reported first-quarter earnings that were much better than expected, but consensus estimates for the next three quarters have been revised much lower. And while inflation has cooled since January, economists expect tariffs to raise prices and slow economic growth in the future. Is it really smart to buy stocks right now? Consider this advice from Warren Buffett, one of the greatest investors in American history. Warren Buffett once wrote, "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." He offered that levelheaded advice when the stock market crashed during the Great Recession. The environment was rife with fear at the time, but the stock market is in a very different place today. Investors are decidedly greedy. The S&P 500 is within striking distance of its all-time high despite extreme uncertainty related to tariffs. The Trump administration has made very little progress in trade negotiations, with only a single finalized deal to date and less than a month until the 90-day pause on reciprocal tariffs expires. Even if the Trump administration strikes deals that eliminate those reciprocal tariffs with every trading partner on the planet, the duties already imposed have raised the average tax on U.S. imports to 12.4%. That is the highest level since 1941. Economists expect tariffs to raise prices and slow economic growth, but the question is to what extent? Answering that question would be hard under any circumstances, but it is impossible right now because the White House has yet to finalize the duties, and the president consistently tweaks his trade policies. Meanwhile, the S&P 500 currently trades at 21.6 times forward earnings, a rich valuation above the five-year average of 19.9 times forward earnings. In short, despite tariff-related uncertainty and elevated valuations, the S&P 500 has nearly climbed back to a record high. That is a clear sign of greed, so investors should be cautious when making decisions. Pay close attention to valuations, buy smaller positions than you otherwise would have, and build a cash position to capitalize on the next drawdown. Investors should never pass on the opportunity to buy a quality stock at a reasonable price. Warren Buffett elaborated on that idea in his 1996 letter to shareholders: "Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, ten, and twenty years from now. Over time, you will find only a few companies that meet these standards -- so when you see one that qualifies, you should buy a meaningful amount of stock." Some investors shy away from the market during periods of macroeconomic uncertainty. Recent events are a good example. The S&P 500 fell 10.5% over two trading days in early April after President Trump announced his "Liberation Day" tariffs. This was the fifth-worst two-day decline for the benchmark index since 1950. Admittedly, the tariffs the president outlined were shockingly severe and may have led to a recession had they stayed in place. However, hindsight says the subsequent crash was an overreaction. Rather than panic-selling stocks, investors should have been buying shares of companies whose earnings are likely to be materially higher in the future. Here is the bottom line: The stock market is undoubtedly in a precarious place right now. Tariffs and high valuations mean the risk is skewed to the downside, so any sign the economy is succumbing to stagflation -- a possibility that has many economists concerned -- may lead to an abrupt and sharp decline. Nevertheless, investors should always buy a quality stock when it trades at a sensible price. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $377,293!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,319!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $659,171!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 9, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Really Buy Stocks With the S&P 500 Near Its Record High? Warren Buffett Has Excellent Advice for Investors. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Should You Forget Medical Properties Trust and Buy These Unstoppable Dividend Stocks Instead?
Medical Properties Trust has a 7.2% yield and a history of dividend cuts behind it. Other healthcare REITs have high yields and dividends that have withstood adversity much better. Omega Healthcare has a 7.4% yield, and LTC Properties has a 6.5% yield. 10 stocks we like better than Medical Properties Trust › Medical Properties Trust (NYSE: MPW) has a lofty 7.2% yield. That compares to the S&P 500 index's skinny little 1.2% yield, and the average real estate investment trust's (REIT's) yield of around 4.1%. On the surface, it appears to be an obvious choice. But don't jump at the chance to buy Medical Properties Trust just yet. You can get similarly large yields from healthcare REIT peers Omega Healthcare (NYSE: OHI) and LTC Properties (NYSE: LTC), and both offer a more compelling dividend story than Medical Properties. Here's what you need to know. Take a look at the chart below for Medical Properties Trust. The orange line is the quarterly dividend, and the purple line is the stock price. Notice the massive drop in both that has occurred since 2022. That was when some of the REIT's large tenants started to experience financial troubles. It was the start of a tense and complicated period when a small number of Medical Properties Trust's tenants failed, and it had no choice but to cut its dividend. For long-term dividend investors, the lofty 7.2% yield on offer from Medical Properties Trust comes with some lofty risks. It's possible that the bad news is all out, and the REIT can start to turn its business around. However, that's far from a certainty. Unless you're willing to bet that the future will look much brighter from here, most dividend investors will probably want to tread with caution. In fact, even if a turnaround is underway, it's likely to be a years-long process. There's a contrast to be made here with healthcare REITs Omega Healthcare and LTC Properties. Both of these REITs focus on senior housing, including nursing homes and assisted living facilities. During the coronavirus pandemic's height, both of these property types were hard hit. The reason was pretty simple: COVID-19 is particularly deadly for unvaccinated older adults and spreads easily in group settings. Occupancy fell for both REITs, and there was a drought of new customers. Both Omega and LTC also had to deal with tenant problems, as some of their lessees had trouble paying rent. That would seem like a perfect storm that would lead to a dividend cut. Yet neither Omega nor LTC cut their dividends. To be fair, neither of these REITs has increased their dividends in years. But a static dividend is much better than a dividend cut. Right now, Omega's yield is 7.4%, while more diversified LTC Properties has a 6.5% yield. The future is starting to look brighter for each of these healthcare REITs. Omega's adjusted funds from operations (FFO) rose year over year in the first quarter of 2025, and it increased its full-year guidance. LTC Properties, meanwhile, expects 2025's adjusted FFO per share to be flat to slightly higher. However, it's diversifying its business approach to include senior housing operating properties (SHOP). (SHOP assets are owned and operated by the REIT, though it actually hires a third party to handle day-to-day management of the asset.) As it grows, this business should increasingly benefit from the growth in demand for senior housing as the U.S. population ages. The key takeaway here, however, is that, when faced with adversity, Omega and LTC Properties held firm in their commitment to shareholders. They adjusted as needed to keep paying. Medical Properties Trust, on the other hand, couldn't manage that feat. The past doesn't predict the future, of course, but the past is all we have to go on as investors. And since all three of these healthcare REITs have faced material adversity just recently, their strengths and weaknesses have been laid bare. While the worst might be over for Medical Properties Trust, most dividend investors should probably err on the side of caution with either Omega, which has a higher yield, or LTC Properties, which has a lower yield but a far more diversified business model. Before you buy stock in Medical Properties Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Medical Properties Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Forget Medical Properties Trust and Buy These Unstoppable Dividend Stocks Instead? was originally published by The Motley Fool Sign in to access your portfolio
