2 ultra-cheap dividend stocks you can buy right now

Regular readers of my investment pieces know that I remain pretty bullish over the profits potential of Britain's housebuilding sector.

Telford Homes(LSE: TEF) is one share I am no stranger to tipping and back in February I highlighted the homes shortage that is driving demand for its new-build properties. And latest trading details from the AIM-quoted business underlined the favourable trading environment that is powering the company's bottom line.

Telford's share price swelled to three-year highs last week after it said it expected to print record revenue and profit for the 12 months to March 2018, and that a predicted 30% rise in pre-tax profit would come in above City expectations.

The builder commented that "the undersupplied housing market in London has remained robust at the group's typical price point," adding that it has been boosted by "a broad customer base of build-to-rent investors, individual investors, owner-occupiers and housing associations."

Chunky yields

With the homes shortfall in the capital set to persist, I expect demand for Telford's homes to remain resolute. And I am not alone as broker consensus suggests a 17% bottom line advance is on the cards for fiscal 2019. This makes Telford a brilliant value pick too -- it sports a forward P/E ratio of 7.8 times as well as a corresponding sub-1 PEG multiple of 0.5.

City analysts expect profits to keep pounding higher as well, another 4% rise being predicted for next year. And these bubbly numbers give rise to expectations that Telford will continue to deliver robust dividend increases (it has already more than tripled the dividend over the five years to fiscal 2017).

An 18.9p per share reward is currently predicted for this year, up from an estimated 17p for last year, resulting in a meaty 4.3% yield. And the dial moves to 4.5% for next year thanks to the expected 19.7p dividend.

Fun in the sun

Elegant Hotels Group (LSE: EHG) is another London-quoted dividend great that is trading at bargain-basement prices right now.

The AIM-listed business is expected to roar back from recent profits reversals with a 14% advance in the year ending September, meaning it trades on a forward P/E ratio of just 10.1 times with a corresponding PEG reading of 0.8. Another 8% advance is forecast for next year, and I would bank on the company's hotel refreshment programme and acquisition strategy in the Caribbean, as well as its moves to bolster bookings from the US, to lay the foundation for profits to keep moving higher.

At first glance there may not be much to celebrate for income investors, however, the vast cost of upgrading its resorts being predicted to result in a second successive dividend cut. Still, the 3.5p per share rewards forecast for both this year and next mean that the yield stands at a vast 4.2% through to the close of fiscal 2019. I think Elegant Hotels is a share that could provide exceptional returns now and in the years ahead.

Buy-And-Hold Investing

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Royston Wild has no position in any of the shares mentioned. 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 us better investors.

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