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Bellway, Jupiter and RPS are Liberum picks as income stocks come back into fashion

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Income is in favour, according to broker Liberum, which delivered its monthly assessment of the small and mid-cap sector.

Analyst Sebastian Jory revealed out that high yielding stocks have outperformed ‘lower yielders’ by 20% over the last year.

He also pointed out the FTSE 250 dividend yield is at a record high. “Alongside M&A, dividend upgrades are an important source of upside at UK small and mid-caps,” added Jory. 

He screened for stocks not only paying well, but have the scope to grow the dividend further and came up with three key picks – the fund manager Jupiter (LON:JUP), the consultant RPS (LON:RPS) and builder Bellway (LON:BWY).

He said Jupiter is yielding 6.5% a year and yet is growing at a compound annual rate of 13%, while RPS is expanding at a compound 14% and yields 3.5%.

Bellway, meanwhile, has a dividend yield of 3.3% and growing at a compound annual rate of 22%.

Quick facts: Bellway PLC

Price: 3427 GBX

LSE:BWY
Market: LSE
Market Cap: £4.22 billion
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