Top dividend stocks for June 2021

We asked our freelance writers to share the best dividend stocks they’d buy in June. Here is what they chose:

GA Chester: Bunzl

Sales and outsourcing specialist Bunzl (LSE: BNZL) doesn’t have the highest return on the FTSE 100. But it has a track record of 28 consecutive years of dividend increases with an average annual growth rate of 10%. The growth was supported by a successful bolt-on acquisition strategy.

I’ve always liked the company’s significant exposure to non-cyclical and less cyclical customer markets. And the business has been very resilient from the pandemic. The stock price has done below the Footsie so far in 2021, and I think a 2.4% starting yield makes this a good time for me to buy with long-term income.

GA Chester has no position in Bunzl.

Roland Head: Direct Insurance Group

FTSE 250 insurer Direct insurance group (LSE: DLG) is my top dividend share, thanks to a dividend yield of 8%, which I consider sustainable.

This well-known motor and home insurer has invested in new technology in recent years to improve its underwriting. Direct Line is also expanding its Business Insurance division, where first quarter revenue increased 16.1%.

One risk is that new regulations prohibiting price increases for renewal customers could affect Direct Line’s bottom line for years to come. The new rules were expected, however, and in my experience, larger companies generally deal more easily with regulatory changes than smaller competitors.

I see Direct Line at the current level as a purchase.

Roland Head owns shares in Direct Line Insurance Group.

Ben Hargreaves: National Grid

I think buying stocks in National Network (LSE: NG) could be a solid investment for a dividend-focused portfolio. The company has a strong presence in the UK, but also a large presence in the US, where it serves approximately 10 million customers. This adds geographic diversification to its strengths in a stable environment where it operates as a utility company.

National Grid offers a dividend of 5.2% and its share price is up 11% year-to-date. As a precaution, the share price has only risen 14% over the past three years. However, when dividends are factored in, I think National Grid should be a solid earner in the long run if followed by a buy-and-hold strategy.

Ben Hargreaves has no position on the National Grid.

Edward Sheldon: Unilever

My top dividend stock for June is the consumer goods giant Unilever (LSE: ULVR). It currently offers an expected dividend yield of around 3.4%.

I like Unilever for a number of reasons. One is that the company is a reliable dividend payer with an excellent track record of dividend growth. Over the past 70 years, Unilever has increased its payout by around 8% per year.

Another reason I like the stock is because of its long-term growth potential. With more than 50% of sales coming from the world’s emerging markets, there is plenty of room for growth.

The investment case carries risks. One risk is that its brands could become less attractive. Overall, however, I consider the long-term risk-return ratio here to be attractive.

Edward Sheldon owns shares in Unilever.

Kevin Godbold: SSE

FTSE 100 Energy company SSE (SSE) has had operational problems for the past few years, but business is now growing. The directors have steered the operation towards renewable energies like wind generators. And the financial numbers are on the up. For example, I like the recent record of robust and growing cash flow. The company cut its dividend for the trading year to March 2020, but it has grown higher since then, with City analysts predicting further incremental increases.

With a share price close to 1,540 pence, the forward-looking return is around 5.5%. I would like to buy some of the stocks and add the increasing income from this improving business to my diversified portfolio.

Kevin Godbold has no position in SSE.

Christopher Ruane: Imperial brands

As the income stocks go Imperial brands (LSE: IMB) is no secret. But I still think it’s a top dividend stock to add to my portfolio.

Its yield exceeds 8%. That makes the tobacco giant one of the highest-yielding FTSE 100 stocks.

She recently increased her dividend. I took that as a vote of confidence that Imperial’s new strategy of focusing on cigarettes in its five key markets has got off to a good start.

However, last year it cut its dividend, and uncertain future demand for cigarettes is a risk.

Christopher Ruane owns shares in Imperial Brands.

Rupert Hargreaves: direct line

Insurance group Direct line (LSE: DLG) is one of my favorite income investments. The company is one of the largest insurers in the country, which gives it a robust competitive advantage. In particular, it has a lower cost and loss rate than most of its competitors.

As a result, Direct Line is quite profitable, and management is keen to return as much profit as possible to investors.

At the time of writing, the share offers a dividend yield of 7.3%. In addition, the Group is also returning cash to investors by buying back shares.

Those cash earnings could come under pressure if the company struggles with higher than expected losses. Increasing costs can also lead to lower profit margins.

Despite these risks, I would buy more stocks in June.

Rupert Hargreaves owns shares in Direct Line.

Paul Summers: Premier Miton Group

Small Cap Asset Managers Premier Miton (LSE: PMI) is likely flying under the radar of most income hunters. However, a 48% increase in the interim dividend after a 17% increase in earnings could change that.

Analysts predict the PMI will return 5.2% in FY21 based on the share price as I type. That’s way more than the ridiculous 0.46% I’d get from the best cash ISA.

Sure, the way the company works makes returns difficult to predict. However, I think a P / E of only 12 takes this into account. A healthy balance sheet is also reassuring.

Paul Summers has no position in the Premier Miton Group

Alan Oscroft: City of London Investment Trust

City of London Investment Trust (LSE: CTY) has been named a “Dividend Hero” by the Association of Investment Companies after increasing its dividend for 54 consecutive years. We are now expecting a return of around 4.8%, which I find very attractive. Where is the trust’s money? It applies to UK equity income with a spread of top FTSE 100 stocks in its portfolio.

So this is my top dividend stock for June. Oh, and probably for July, August, next year and five years too … I see City of London as a serious long-term income investment.

Alan Oscroft owns shares in the City of London Investment Trust.

Nadia Yaqub: The Renewable Energy Infrastructure Group

In my opinion The Renewable Energies Infrastructure Group (LSE: TRIG) is offering me a great opportunity to enter the green energy sector. It is a diversified portfolio of renewable energy investments located across the UK and Europe.

TRIG consists of 77 investments in solar, onshore and offshore wind as well as battery storage. These assets generate income from the sale of electricity and government-sponsored green services.

With economies focused on net zero carbon emissions, that should provide tailwind for TRIG stocks. The mutual fund isn’t cheap. It is traded at a premium of 13% on the net asset value (NAV). But given its dividend yield of over 5%, I think this stock is attractive to the income investor in me.

Nadia Yaqub has no shares in The Renewables Infrastructure Group.

Royston Wild: ITV

A lot of positive news from the advertising industry makes me believe that ITV (LSE: ITV) is a great high yielding stock today.

ITV itself has seen a steady increase in advertising revenue over the past few months. With the emergence of Covid-19 variants, this trend reversal could of course quickly come to an end if the infection rates soar again. But for now, there’s a lot to look forward to as ad revenue rises and ITV’s production units get back to work.

Okay, ITV’s 3.7% dividend yield for 2021 could be chunky rather than mind-blowing. But the city’s expectations of a sustained recovery in earnings – and the associated predictions that dividends will continue to rise – push returns for the next year to a very impressive 4.3%.

Royston Wild does not own any shares in ITV.

Harshil Patel: Persimmon

persimmon (LSE: PSN) is my top income stock pick. It offers a forecasted dividend yield of 7%! This UK based home builder aims to build high quality homes in a variety of price ranges.

Demand for newly built homes remains healthy and average sales prices are higher than in 2020. Its latest trade update states that the average private sales rate this year is “way ahead” of 2020.

Persimmon has high quality land holdings, a strong balance sheet and increasing home demand. However, dividends can go down as trading worsens. However, trading has been strong so far this year. Hence, I expect to receive the forecast 7% of dividend income.

Harshil Patel does not own any shares in Persimmon.

Manika Premsingh: Imperial brands

It has a hefty 9.4% dividend yield, but tobacco is great Imperial brands (LSE: IMB) is faced with two points of criticism.

First, tobacco stocks are going out of style as the world becomes healthier.

Second, in times of ethical investing, it is often viewed as a “sin stock”.

Here are my counter arguments. First, tobacco companies are switching to healthier alternatives. Additionally, tobacco demand is strong for now, which is evident in Imperial Brands’ healthy recent earnings.

Second, it is controversial for me to view tobacco as a “sin”. Civil society and policy makers have done their part to make consumers aware of the disadvantages and also to protect bystanders from the harmful effects of secondhand smoke. In addition, tobacco use is a conscious choice for adults.

It’s my top dividend stock for June.

Manika Premsingh has no position at Imperial Brands.

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source https://dailyhealthynews.ca/top-dividend-stocks-for-june-2021/