Dividends make an enormous difference to investment returns, especially if they are reinvested in more shares — in fact, they can easily turn a good return into a multibagger one. But a big dividend today is no good if it’s unsustainable in the long term and likely to be cut back in the future.
Dividend safety is one of my key requirements, and I reckon there’s a reliable one to be had from car dealer Pendragon (LSE: PDG). The firm, which sells new and second hand vehicles, and offers repair services, has seen its share price going through a tough patch over the past couple of years, and it took a dive as a result of 2016’s Brexit referendum result — a dip from which it hasn’t fully recovered, though many others have.
Switching to my second choice, I can’t help thinking Jupiter Fund Management (LSE: JUP) has been performing very well in recent years. It’s certainly ahead of some of its peers, like Aberdeen Asset Management, which has suffered from three years of declining earnings due to its emerging markets focus.
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