2 under-the-radar dividend stocks with exciting momentum

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While inflation continues to pose a threat to income investors, it is still possible to obtain a high yield from a variety of shares. Certainly, they may not always operate in industries which offer low-risk outlooks. However, in many cases they have sound finances, improving business models and significant growth potential. As such, they could deliver impressive income returns in the long run. Here are two stocks which seem to be prime examples of such companies.

Improving performance

Reporting on Tuesday was precious metals miner, Polymetal International(LSE: POLY). The company's performance in the first half of the year showed a marked improvement on the previous year, with revenue rising 15% to $683m. It was able to increase production, with gold sales up 19%. While silver sales were 5% lower, it has also been able to better manage the seasonal gap between production and sales, which contributed to a higher revenue figure.

Polymetal's share price gained as much as 3% on the day of the release of its first half results. This was partly due to its improving outlook, but also because of increasing geopolitical risks concerning North Korea. Looking ahead, gold could become more popular among investors if such risks continue or even increase. Its status as a defensive asset may prove popular and lead to a higher share price in future.

With Polymetal yielding 3.7% at the present time, it has income appeal. Next year, it is expected to increase dividends by 33%, which puts it on a forward yield of 5%. Dividends are expected to be covered twice next year even after the forecast rise, which suggests that additional growth could be ahead. As such, now could be the perfect time to buy the stock for the long term.

Growth opportunity

Also offering an upbeat outlook for income investors is housebuilder Persimmon(LSE: PSN). The company faces an uncertain future due to the potential risks from Brexit. However, with interest rates expected to remain low and there being a major lack of supply of new homes in the UK, the company's earnings growth potential remains significant. That's especially the case over an extended time period.

With Persimmon currently yielding around 5% per annum from its dividend payment programme, its income return easily beats inflation. The company has become financially stronger in recent years and has focused on improving its balance sheet strength and efficiency. This should enable it to meet any future challenges within its industry, which reduces its overall risk profile.

Persimmon currently trades on a price-to-earnings (P/E) ratio of 10.9. This suggests that it offers a wide margin of safety. With its bottom line expected to rise by 16% this year, it could deliver high capital growth over the medium term. And in the long run, it remains a strong income stock which should help investors to overcome the increasing threat from inflation.

Millionaire prospects

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Peter Stephens owns shares of Persimmon. 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