Image source: Getty Images
Looking to invest in London Stock Exchange this month? Here's a very cheap dividend stock and rising exchange-traded fund (ETF) that I think is worth considering.
Bank of Georgia Group
Bank of GeorgiaThe (LSE:BGEO) share price has plummeted by double-digit percentages in recent weeks. I think this represents a great buying opportunity for investors looking for value stocks with huge dividend yields.
By 2024, the FTSE 250 The bank trades on a forward price-to-earnings (P/E) ratio of 3.1 times. Regarding the dividend yield, it stands at 7.6% and 8.1% for this year and next, respectively. To put this in context, both figures are more than double the average of the FTSE 250 shares.
The collapse of the Bank of Georgia reflects growing concerns about growing political uncertainty in the country and, more specifically, its future relations with Russia and the European Union. Naturally, these issues will have major implications for Georgia's economy and the businesses that operate there.
Still, I'd say Bank of Georgia's 3x P/E ratio reflects any danger to its earnings.
Ultimately, I think the bank remains a great way to capitalize on the growing demand for financial products in its emerging market. Profits rose 16% in the first half of 2024 as borrowing levels soared, the latest financial statements showed.
I am also encouraged by the acquisition of Ameriabank this year. This gives it significant exposure to Armenia, another of the region's fastest growing economies.
While not without risks, I think the company could prove to be an excellent long-term prospect.
iShares Gold Producers ETF
Precious metal prices have soared in 2024. Gold, for example, has soared to record levels in multiple currencies and, in sterling terms, surpassed £2,000 per ounce at the end of last month for the first time.
Silver is also smashing and, in dollar terms, has hit its highest level since 2012 in recent days.
I think investing in a gold-based exchange-traded fund (ETF) could be a good idea in this climate. One that caught my attention is the iShares Gold Producers ETF (LSE:SPGP), which has a relatively low annual cost of 0.55%.
As the name suggests, it invests in gold mining companies rather than following the bullion price. This has a big advantage for me as an investor, since many of the miners it owns pay a dividend that is automatically reinvested by the fund.
The downside is that buying this mining-focused gold ETF exposes me to the problematic nature of metal production. However, because the fund invests in a wide range of different companies, the risk of such problems occurring in my overall returns is reduced, but not eliminated.
Of course, there is no guarantee that gold prices will continue to rise. However, a combination of central bank rate cuts, ongoing concerns about the US and Chinese economies, and escalating problems in the Middle East mean the precious metal could continue to rise in October and beyond.