3 income stocks I’d buy in April

Rupert Hargreaves explains why he thinks these dividend stocks could be great additions to your Stocks and Shares ISA portfolio in April.

| 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.

If you’re looking for income stocks to buy for your Stocks and Shares ISA in April, you’re spoilt for choice. However, with companies announcing dividend cuts every day at the moment, investors need to be careful when searching for income.

With that in mind, here are three income stocks that look attractive in the current environment for long-term investors.

Secure income stocks

Secure Income REIT (LSE: SIR) was designed with the single goal of providing a steady income stream for investors in all environments. The group’s portfolio comprises “critical operating assets let to strong businesses in defensive sectors with high barriers to entry.

Should you invest £1,000 in The Gym Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if The Gym Group Plc made the list?

See the 6 stocks

The 161 operating assets that make up the overall portfolio are let on leases with a weighted average lease term of 21 years, with no brakes. What’s more, the company is well funded. At the end of 2019, it had uncommitted cash on the balance sheet of £234m, with a net loan-to-value ratio of 31.9%.

All of the above suggests the company is well-positioned to weather the current uncertainty.

Some tenants might withhold income in the near term, which would have an impact on cash flows. But any outstanding dues should be settled over the next 12-24 months, especially considering the nature of Secure’s blue-chip portfolio.

Right now, the stock supports a dividend yield of 5.6%. It’s also trading at a price-to-book value of just 0.7. That’s why this business makes it onto my list of the top three income stocks to buy in April.

Healthcare properties

Healthcare-focused real estate investment trust Target Healthcare REIT (LSE: THRL) also looks attractive. After recent declines, the stock is trading with a dividend yield of 6.6%. Target owns and operates a portfolio of purpose-built care homes. At the end of December, the business owned and operated 71 assets let to 28 tenants with a total value of £590m.

The demand for care facilities in the UK is only growing. The coronavirus pandemic is unlikely to change this trend. That makes Target stand out as one of the market’s top income stocks.

The company is also well-financed. Its net loan-to-asset ratio was just 20% at the end of 2019. This suggests the group has plenty of firepower to both maintain operations for an extended period if income drops substantially.

The low level of borrowing also indicates the business has the financial flexibility to pick up assets on the cheap from other providers that might be struggling.

H&T Group

The final income stock I’d consider buying in April is pawnbroker H&T Group (LSE: HAT). Ethical considerations aside, businesses such as H&T tend to do well in times of economic hardship. As it looks like we are heading towards one of the worst economic contractions on record, H&T could be about to see a surge in business.

However, in the near term, the outlook for the business is bleak. H&T stores across the country are currently closed, in compliance with government guidelines. This will hit earnings in 2020. It’s likely management will also cut the dividend as a result.

Nevertheless, when the stores re-open, there could be a boom in demand for H&T’s services. This implies management will be able to reinstate shareholder payouts. Reinstating the dividend at the current level would give a yield of 5.3%.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

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.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Here’s how a 40-year-old could start investing £100 per week to retire early

If a 40-year-old decides to start investing today, here's how they could potentially turn £100 a week into over £500k…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The FTSE 100 is up 60% in 5 years. Here’s why — and a big lesson!

The flagship FTSE 100 index has put in a very strong performance over five years. There's a specific reason for…

Read more »

Investing Articles

How much do investors need in an ISA to earn a £2,500 monthly passive income?

Charlie Carman explores how investors could strive for £30k in tax-free passive income each year from a dividend stock portfolio.

Read more »

Investing Articles

How much would a 45-year-old need to invest in an ISA to earn a £1k monthly passive income at 65?

Harvey Jones looks at how much an investor would need to put away every month to build a steady passive…

Read more »

Investing Articles

3 things to do ahead of the new 2025-26 ISA year

It's time for us all to put on our investing boots and get to work on developing our plans for…

Read more »

Older couple walking in park
Investing Articles

Is £150,000 enough to generate £1,000 a month in passive income?

Stephen Wright takes a look at three UK stocks with dividend yields above 8% that passive income investors might be…

Read more »

Investing Articles

Aim to earn a £50k second income in retirement by investing just this much each month

Even with a small monthly investment, it’s possible to earn a £50k second income with a successful investment strategy and…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 22% in a month! Is this my chance to buy shares in this FTSE 100 outperformer?

Shares in InterContinental Hotels Group have outperformed the FTSE 100 over the long term. So is a chance to buy…

Read more »