3 hot shares for May: National Grid plc, Marks and Spencer Group plc & United Utilities Group plc?

Electricity pylons

Most investors will tuck away at least one solid dividend paying stock in their portfolios, and one of the FTSE 100's steadiest, National Grid(LSE: NG), will be releasing full-year results on 19 May.

Earnings per share have been a little erratic in recent years, but after a 9% increase in the year to March 2015, the company was able to pay a 5% dividend yield. With National Grid's policy of lifting its ordinary dividend each year at least in line with the rate of RPI inflation, there's a rise of around 2% predicted for the year just ended, with the interim payment already raised by that level. With National Grid shares having put on 11% in the past 12 months, to 988p, it would yield 4.4%.

National Grid shares are good for those who wish to reinvest dividends too, as the company runs a scrip dividend scheme so you can take new shares instead of cash -- and to offset the dilution effect, it regularly buys back some of its own shares.

A forward P/E of around 15.5 is fractionally ahead of the FTSE average, but for such dependable income, I reckon that's good value.

Retail recovery

After years in the wilderness, Marks & Spencer (LSE: MKS) could be back on track. The high street stalwart is, admittedly, still struggling to get its clothing onto the backs of younger shoppers -- in its fourth quarter update it revealed a 1.9% fall in Clothing and Home sales. But M&S.com is doing well with an 8.2% rise in sales, and the shift to online selling is vital if M&S is to compete successfully with the likes of Next, ASOS, and the rest.

How those sales will translate into profit is something we'll hear on 25 May, when the company is due to release full-year results -- and there's a modest EPS rise expected. M&S shares could certainly do with a boost, after shedding 25% over a year to 412p, and gaining just 4% over the past five years.

With EPS forecast to rise gently over the next two years, and with the dividend expected to yield 4.4% this year and predicted to rise to 5% by March 2018, we're looking at a current P/E of around 12 and set to drop to under 11 in two years. That makes M&S shares look like decent value to me.

Reliable utility

A day later, on 26 May, we should have full-year results from United Utilites(LSE: UU), and that's another bedrock of many a long-term portfolio. After three years of double-digit rises in earnings per share, there's a fall back of 10% expected for the year to March 2016, but the company's progressive dividend policy should still see the annual payment rise at least in line with inflation -- as confirmed at interim results time back in November.

United Utilities shares have had a pretty flat 12 months, and the current price of 942p suggests a likely dividend yield of 4.1%, which is pretty respectable. On a P/E of around 20, United Utilities shares are the priciest of these three, but that's the premium the market is happy to pay for super reliability.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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