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2 Dividend-Paying UK Stocks With High Financial Strength

Considering the potential for strong volatility regarding Brexit, which is due to occur on Oct. 31, two U.K. stocks with strong financial strength and high dividend yields are Eco Animal Health Group PLC (LSE:EAH) and Nichols PLC (LSE:NICL).

Sterling rises on positive comments from U.K. and Ireland leaders regarding Brexit

U.K. Prime Minister Boris Johnson and Ireland Prime Minister Leo Varadkar said in a joint statement that a Brexit deal is still "in everybody's interest" and that they see "a pathway to a possible deal." The tweet mentioned that Johnson and Varadkar focused on the following discussion points: the challenges of customs and consent, the strengthening of bilateral relations and the agreement of reflecting further on these discussions. The U.S.-U.K. exchange rate soared to $1.24 per pound on the news.


Despite the comments, CNBC columnist Matt Clinch warned that Ireland remains a central point of the Brexit debate. The "Irish backstop" represents the arrangement where the U.K. prevents a physical border between Northern Ireland and the Republic of Ireland. However, Clinch noted the U.K. has a land border on the mainland between Northern Ireland and Ireland to the south. Withdrawal deals that include the Irish backstop has garnered disdain from opponents that view it as "a means to trap the U.K. within Europe."

High-quality dividend growth companies identify opportunities

GuruFocus' Dividend Growth Portfolio, a built-in All-in-One Screener template, seeks high-quality companies that have good dividend yields. Such companies have strong financial strength and good profitability.

Eco Animal Health

Eco Animal Health formulates a wide range of veterinary treatments for diseases in pets and farm animals like cattle, sheep, pigs and horses. GuruFocus ranks the company's financial strength 9 out of 10 on several positive investing signs, which include robust interest coverage, a strong Altman Z-score of 9.36 and a debt-to-equity ratio that outperforms 89.01% of global competitors.


The veterinary drug manufacturer's profitability ranks 8 out of 10 on the heels of operating margins that have increased approximately 12.40% per year on average over the past five years and are outperforming 83.14% of global competitors.


Nichols manufactures beverage products through brands like Feel Good, Panda, Starslush, Levi Roots and Sunkist. GuruFocus ranks the company's financial strength and profitability 9 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 7, a robust Altman Z-score of 14.76, a three-star business predictability rank and operating margins that are near a 10-year high of 25.84% and outperform 92.31% of global competitors.


Disclosure: No positions.

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This article first appeared on GuruFocus.