3 dividend stocks I’d buy in June

Kainos (LON:KNOS), Legal & General (LON:LGEN) and Volution Group (LON:FAN), are three dividend stocks displaying staying power.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Young black colleagues high-fiving each other at work
Investing Articles

Is Legal & General Group one of the FTSE 100’s greatest value shares?

Legal & General shares boast low P/E ratios and massive dividend yields. Could they be one of the London stock…

Read more »

Front view photo of a woman using digital tablet in London
Investing Articles

I’m looking for the best FTSE 100 value stocks to buy now. Have I found them?

Barclays, NatWest, and Imperial Brands shares are recovering strongly. But these FTSE 100 stocks still trade on rock-bottom earnings multiples.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Where on earth will Nio stock be in 1 year?

Nio stock has demonstrated extraordinary volatility over the past 12 months, but where will it be in a year's time?…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

6.9% dividend yield! 2 cheap stocks to consider for a £1,380 passive income

Looking for a market-beating passive income? These FTSE 100 and FTSE 250 dividend stocks could provide a healthy second income…

Read more »

Mature black couple enjoying shopping together in UK high street
Investing Articles

Potentially 34% undervalued, should I be watching the boohoo share price?

The boohoo share price has seen a rocky few years, but with signs that the economy is improving, could this…

Read more »

Investing Articles

Is the Amazon share price primed for a drop?

The Amazon share price has been on a tear for the last year, but can this trend continue? Gordon Best…

Read more »

Photo of a man going through financial problems
Investing Articles

Down 15% in a week! What’s gone wrong with the National Grid share price?

The National Grid share price isn't supposed to crash but now it has. Harvey Jones is wondering whether to take…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

Taylor Wimpey just paid me £158.78. I’m aiming to turn that into a £100k yearly second income

Harvey Jones says small, regular dividend payments can turn a few pounds into a mighty second income, if he gives…

Read more »