There appears to be light at the end of the Covid tunnel as the vaccine rollout continues to yield results. So I’m looking at stocks that I think have long-term staying power. Here are three dividend stocks I like the look of today in the tech, insurance and ventilation markets.
Kainos grows through M&A
Software company Kainos Group (LSE:KNOS) is expanding its reach across Europe. And it just announced the acquisition of Cloudator Oy’s Workday division.
Workday is an on‑demand financial management software vendor from the US and Kainos is already a significant partner in offering Workday services. In its recent annual report, it noted an 18% rise in organic sales from its Workday division, so I think expanding this seems like a wise move.
Kainos’ annual results were excellent, with it reporting a 31% increase in revenue and 117% rise in pre-tax profit.
It also has the NHS as a client, which has significantly boosted its revenues in the past year. It has a forward price-to-earnings ratio (P/E) of 38, earnings per share are 32p and its market cap is £1.7bn. It also offers a 2% dividend yield.
Yet Kainos has been a popular stock this year and may be at risk of a share price drop if its growth slows. Nevertheless, I like the look of this dividend-paying stock.
LGEN’s generous dividend
Legal & General Group (LSE:LGEN) is a large insurance company with several revenue streams from insurance, investments, retirement and life cover. One of its streams is from rental and leasehold properties for the elderly and as the UK has an ageing population, this is likely to have growing appeal. I think it should continue to see strong cash-flows in the years to come.
The LGEN balance sheet is stronger now than it was before the pandemic hit. It’s increasing its product offering in the US, and in Europe, where it’s 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 are 29p, plus it offers a generous 6% dividend yield. This yield holds great appeal for me and I’m tempted to add it to my Stocks and Shares ISA.
A blast of fresh air
Volution Group (LSE:FAN) sells ventilation products to homes and businesses, including extractor fans and built-in ventilation systems.
The pandemic has highlighted the need for ventilation and it’s increasingly in demand as consumers look to control indoor air. The firm’s operating margins are a decent 20% and it’s been growing through M&A in recent years.
It’s also tipped as a viable entrant into the FTSE 250 in the upcoming reshuffle.
The Volution share price has risen 163% in the past five years. In the year prior to the pandemic, the group’s share price did well, but since the March 2020 market crash it has soared.
Today Volution has a P/E of 48, earnings per share are 9p and its dividend yield is 1%. But given that it’s an expensive stock, there’s always a risk of a price slide on disappointing results. Yet I like its future prospects and would happily buy shares in Volution Group today.
For more dividend stocks read on...
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Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has recommended Kainos. 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.