3 unmissable income shares to buy in September?

Share prices are down, and dividend yields are rising. Has there ever been a better time to invest in long-term income shares?

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There are plenty of high-profile income shares paying big dividends these days. But I reckon I’m seeing quite a few flying below the radar.

Today I’m looking at three companies with updates in September, all of which I think offer attractive progressive income.

Specialist recruitment

My first pick is SThree (LSE: STEM), due to bring us a third-quarter trading update on 20 September. The recruitment company, which specialises in the IT sector, saw its share price collapse again after a sharp spike in 2021.

Figures for the first half looked impressive, with net fees up 25% and operating profit up 62%.

There was net cash on the books, and SThree lifted its interim dividend by 67% to 5p per share. Forecasts suggest a 4% yield for the full year, and a price-to-earnings ratio of below 10.

That dividend payment appears cautious to me, with cover likely to be strong.

There is cyclical risk here, though. In the two pandemic years, the dividend was drastically cut. And there’s a recession on the horizon. But on balance, I see desirable long-term income.

Dividend recovery

My next choice is one that’s on something of a tentative recovery. I’m looking at construction firm Galliford Try (LSE: GFRD).

The company suffered two years of tough losses during the pandemic, and suspended its dividend in 2020. In 2021, it came back at a much lower level. The 4.7p dividend that year was but a shadow of the 77p paid in 2018. It yielded 3.3% on the share price at the time.

Forecasts show the dividends growing slowly but steadily. They predict a yield of 4.5% this year, growing to nearly 6% by 2024. Again, they should be well covered.

Like all broker forecasts, these are to be treated with caution. And at this stage in its recovery, Galliford Try is still a risk.

But the company’s July trading update spoke of “strong performance across operations resulting in increased revenue, pre-exceptional profit and operating margin.” Full-year results are due on 21 September.

Soft drinks

My final selection is AG Barr (LSE: BAG), which I think might hold up well in a recession. The soft drinks producer will deliver first-half figures on 27 September.

Barr did suspend its dividend during the pandemic, even though it still recorded healthy profits. But it’s a company that likes to trade with net cash, and I find that refreshing these days.

August’s trading update revealed a 19% increase in like-for-like revenue.

Inflation could hit trading, though. And the company pointed out that it’s suffering rising costs just like everyone else. It’s in a very competitive business too, so that’s something to watch out for. Part of Barr’s business comes from the hospitality sector. So there may be pressure there through the looming recession.

The dividend is modest, with forecast yields of around 3%. But I think we could be looking at a long-term defensive income investment here.

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.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended AG Barr. 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.

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