3 dividend stocks I would buy in June

There appears to be light at the end of the Covid tunnel as the vaccine rollout continues to yield results. So I look at stocks which I think have long term resilience. Here are three dividend-paying stocks that I like the look of today in the tech, insurance, and ventilation markets.

Kainos grows thanks to mergers and acquisitions

Software company Kainos Group (LSE: KNOS) is expanding its reach across Europe. And he just announced the acquisition of the Workday division of Cloudator Oy.

Workday is a US publisher of on-demand financial management software and Kainos is already a major partner in the Workday service offering. In his recent annual report, he noted an 18% increase in organic sales for his Workday division, so I think expanding that seems like a wise move.

Kainos’ annual results have been excellent, with a 31% increase in revenue and 117% increase in profit before tax.

He also has the NHS as a client, which has significantly increased his income over the past year. It has a forward price-to-earnings (P / E) ratio of 38, earnings per share of 32p and its market capitalization is £ 1.7 billion. It also offers a 2% dividend yield.

Still, Kainos has been a popular stock this year and could risk a drop in its share price if its growth slows. Nonetheless, I like the look of this dividend paying stock.

LGEN’s generous dividend

Legal and General Group (LSE: LGEN) is a large insurance company with multiple sources of income from insurance, investments, retirement and life coverage. One of its flows is from rental and leasehold properties for the elderly and, as the UK has an aging population, this is likely to have increasing appeal. I think it should continue to record strong cash flows in the years to come.

LGEN’s record is stronger now than it was before the pandemic. It is expanding its product offering to the United States and Europe, where it is seeing strong demand for its exchange-traded funds (ETFs).

But there are ongoing risks to this business and they include another wave of Covid-19 or a financial crisis.

Legal & General has a forward P / E of 9 and earnings per share of 29p, in addition to offering a generous dividend yield of 6%. This return is very attractive to me and I am tempted to add it to my ISA Stocks and Shares.

A breath of fresh air

Volition Group (LSE: FAN) sells ventilation products to homes and businesses, including extractor fans and integrated ventilation systems.

The pandemic has highlighted the need for ventilation and it is increasingly in demand as consumers seek to control indoor air. The company’s operating margins are 20% and they have increased thanks to mergers and acquisitions in recent years.

It is also considered a viable entrant in the FTSE 250 in the next shuffle.

The Volution share price has increased 163% over the past five years. In the year leading up to the pandemic, the group’s share price performed well, but since the March 2020 stock market crash it has skyrocketed.

Today, Volution has a P / E of 48, earnings per share is 9p, and its dividend yield is 1%. But given that this is an expensive stock, there is always a risk of falling prices on disappointing results. Still, I like its outlook for the future and would gladly buy Volution Group shares today.

The post-dividend stocks I would buy in June appeared first on The Motley Fool UK.

More reading

Kirsteen has no position in any of the stocks mentioned. The Motley Fool UK recommended Kainos. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations that we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a wide range of ideas makes we are better investors.

Motley Fool United Kingdom 2021


Source link

About Warren Dockery

Check Also

2 top UK dividend yielding stocks I would buy today

After last year’s dividend cuts and suspensions, I was surprised at how generously leading UK …

Leave a Reply

Your email address will not be published. Required fields are marked *