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AstraZeneca plc, Admiral Group plc & Volkswagen AG: My 3 Dividend Shares To Buy Right Now

Dividend investing is far from easy — no form of investing really is. Yet the premise is simple: successful companies, producing high and rising profits, make good investments.

These firms churn out regular dividends, which are well covered by these profits. And large, stable businesses produce these profits and these dividends consistently.

Reinvest your dividends as they are paid out and, gradually, your investment grows. And here are three investments which I think could just fit that bill.

AstraZeneca

AstraZeneca (LSE: AZN) is one of my pharma company picks. I like the direction that chief executive Pascal Soriot is taking the business, towards high-value, research-intensive, biotech drugs.

The high quality of science undertaken by AZ is showing through in this company’s strong drug pipeline. What’s more, many of these medicines are in the field of anti-cancer treatments. This is one of the fastest growing segments of the pharmaceutical industry.

But it is not all about high value patent-protected medicines. An increasingly wealthy China and India are dramatically broadening the marketplace for pharmaceuticals. This bodes well for the future of pharma.

I think that this firm is fairly priced, with a predicted 2015 P/E ratio of 14.43, and a juicy dividend yield of 4.58%.

Admiral

Admiral (LSE: ADM) is an insurance company that owns brands such as Confused.com, Diamond, and a range of overseas price comparison and insurance websites across Europe and North America such as Rastreator and LeLynx.fr.

Price comparison and online is the fastest growing, but also the most competitive, sector of the insurance market. And this has pushed Admiral’s share price higher. Price comparison is yet to boom in countries like France and Italy as it has done in Britain; when it takes off, this could be the next stage of this company’s growth.

The P/E ratio of this business in 2015 is forecast to be 15.29. But what is most enticing about this investment is the dividend yield, which is a stonking 6.12%. This is basically an online company with low fixed costs, which means it can pay out more of its profits in dividends. So this income is, I think, sustainable over the long term.

Volkswagen

A few years ago, Toyota had a few difficulties. Remember the recall crisis of 2009-11? A range of faults including sticking accelerator pedals and faulty brakes meant millions of cars had to be repaired.

At the time, the damage to Toyota’s reputation seemed devastating. In the depths of the crisis the share price fell to 2926 yen. Yet what went wrong was simply fixed. The share price had recovered to 9000 yen by early 2015 — more than tripling. Toyota is now once more the world’s leading car company. Perhaps the damage was not so irreparable after all.

Volkswagen‘s situation at the moment also looks difficult. But I see this not as a Deepwater Horizon disaster, but as another Toyota. Cars will have to be recalled, and their software reprogrammed. And after a few years, I suspect the scare will have been all but forgotten.

Volkswagen’s share price has now fallen to 125 euros. It has virtually halved from a price of 245 euros earlier this year. But the canny contrarians amongst you will see that this is the time to buy, not sell.

The P/E ratio is now a very cheap 5.69, with a dividend yield of 3.94%. This is a strong buy for me.

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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.