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Dividend Deals! 2 Passive Income Stocks That Still Look Undervalued

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Expectations of interest rate cuts in the US and UK are pushing share prices higher again. But a number of British stocks still look undervalued based on current broker estimates.

Here are two that I think look too cheap to miss right now.

Centamine

A gold miner Centamine(LSE:CEY)’s share price has risen 37% over the past three months. This is driven by a fresh rise in metal prices. It recently touched new highs near $2,450 an ounce.

I believe that. FTSE 250 Although the mining company still provides the best price. It trades at a forward price-to-earnings (P/E) ratio of 9.4 times. Meanwhile, the dividend yield for 2024 is up to 3%.

Well, there are great productions nearby. But forecasts of substantial dividend growth next year still make it a high-income stock to consider, in my opinion.

For 2025, Centamin’s share yield reaches 6.2%.

Commodity prices are notoriously volatile, and are affected by a complex interplay of factors that make them difficult to predict. This, in turn, poses risks to the profitability of mining companies, and with it their ability to pay dividends.

But the price outlook for precious metals is largely encouraging at the moment. Inflation rates around the world are exceeding forecasts, while economic recovery in major regions (such as China) remains lumpy.

At the same time, geopolitical tensions between the world’s superpowers continue to rise. And the risk of regional war in the Middle East is significant.

These traditional drivers of safe-haven assets have been suggested by many to drive gold prices higher. But the analyst Goldman Sachs Recently upgraded its yellow metal forecast to $2,700 for the end of the year.

The direction of gold prices is difficult to predict. But, on balance, I think now might be a good time to consider Centamin shares.

Warehouse REIT

As I say, speculation about a cut in interest rates has also boosted share prices of property stocks recently. Warehouse REIT (LSE:WHR), for example, has gained 5% in value over the past month.

This real estate investment trust (REIT) will benefit from better borrowing costs and better net asset values ​​(NAVs) if rates fall. However, the risk is that rate cuts may not fall as quickly or as sharply as the market expects if inflation remains warm.

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However, at current prices I still think Warehouse REIT shares are an attractive investment. It currently carries a forward price-to-earnings growth (PEG) ratio of 0.8. Any reading below 1 indicates that a share is undervalued.

That’s not the only number that caught my eye. Today, the firm’s dividend yield for this fiscal year (through March 2025) is an impressive 7.2%. This reflects the city’s strong revenue growth forecasts and unique REIT rules governing profitability.

It states that at least 90% of the annual rental profit should be distributed in the form of dividends.

As the demand for storage and distribution centers continues to increase, I think warehouse REITs could be the highest income stocks for years to come.


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