3 top dividend shares to consider buying for April and beyond

A record of growing annual dividends tends to go hand in hand with other value indicators, such as those found with these three shares.

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Buying dividend shares can be a good idea. And a decent company growing its dividend can produce worthwhile capital gains, as well as income, for investors.

Indeed, when dividends rise a bit each year, the share price tends to follow. Although that doesn’t always happen.

Nevertheless, it’s well known that a big part of the overall returns from stocks tends to come from shareholder dividends.

And the yo-yo-ing markets of the past few years have frustrated many investors when they’ve been pursuing gains from share price rises.

So why not focus on dividends and their potential to grow? 

Dividends and value

In one example, one-time outperforming fund manager Neil Woodford did well with just such a strategy — when he was great. Although he changed his tactics later, with poor results.

But when he focused on dividend yields, and on the potential for dividends to grow, he often found good value. And that value served his funds well when businesses grew and share prices rose to reflect the progress.

After all, dividends tend to go hand in hand with other value indicators. 

For example, the presence of a dividend often tells us a business is performing well regarding cash flow – it takes cash to pay dividends. Although sometimes a company’s management can fall into the trap of paying dividends the business really can’t afford.

But if a dividend tends to rise each year, it can indicate a business is growing. Or it can underline the directors’ positive expectations for earnings and cash flow.

And if a dividend yield is high, we can often find other promising value indicators, such as a low-looking price-to-earnings ratio, for example.

Therefore, starting analysis by examining a company’s dividend record and its yield, the potential for dividend growth can be a good idea. If those things look attractive, we can often find other promising features when conducting deeper research.

Shares to consider now

And there are several dividend-paying stocks on my watchlist right now. For example, I like the look of financial technology company IG Group. With the share price near 697p, the forward-looking dividend yield is around 6.8% for the trading year to May 2024.  And the multi-year dividend record shows steady progression.

Meanwhile, wealth management administration company Hargreaves Lansdown has an even more impressive dividend record, showing strong growth. And with the share price near 778p, the anticipated yield for the trading year to June 2024 is just above 5.8%.

But I also like small-cap stock Spectra Systems. The company provides security technology. And that includes software and advanced materials for use in banknotes, product authentication, and gaming. 

Dividend growth has been robust over the past few years. And with the share price near 183p, expectations are for a yield of 5.4% in 2024.

All three of these stocks are good candidates for further and deeper research before buying. But even though they show attractive dividend characteristics, there can be no guarantee they’ll go on to perform well in a portfolio. After all, even promising businesses can hit operational problems from time to time.

Nevertheless, for me, these are among the top dividend-share opportunities to consider buying for April and beyond.

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.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown Plc. 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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