3 income stocks being bought by the company directors

I am always curious to see company directors who buy their own shares. For many, this is provided as part of their overall compensation package. Some choose to buy more on their own. But if they have the relative freedom to buy and sell as they please, it bodes well for how insiders view business prospects. This is especially true if I’m thinking of buying income stocks. If insiders buy, then it gives them confidence that future dividends should be safe, if the company has a good financial year.

Income stocks with double-digit returns

At the end of December, Ferrexpo (LSE:FXPO) chief executive James North bought shares in the company. More specifically, he took shares worth a total of £181,174.78.

Trading and mining companies have struggled over the past year, partly due to volatile movements in iron ore prices. As a result, the share price has fallen by 48.5% during this period. This has helped drive the dividend yield higher to 13.34%.

I am cautious about these high-dividend-yielding stocks, as falling share prices may indicate the business will reduce its dividend per share in the future. However, with the CEO buying shares, I was tempted to invest a small amount of money.

Active investment manager

Another late December purchase came from Anne Wade, non-exec director at Group of People (LSE: EMG). He bought 15,000 shares in the business, worth £31,610.00.

The dividend yield of this stock is 5.27% compared to yesterday FTSE 250 average. The share price has averaged over the past year, which if there is a good performance for 2022.

Although there have been some outflows of client funds, the latest trading report confirms this “Investment performance continues to be a key differentiator”. If returns continue to be good, I don’t see why future dividends from profits won’t continue. These are the stocks I plan to buy in January.

Money in mining

In the last week of Christmas trading, Stuart Chambers of Anglo American (LSE:AAL) took 509 shares worth £15,824.81.

Mining companies performed well in the first half of last year amid volatility in commodity prices. However, it has revised its production guidance lower, with an update in December indicating that 2023 earnings per share will decline.

I think this is another case of a dividend stock with a high yield (6.13%) to watch out for. If global economic activity slows as expected these few years, the demand for metals should decrease. Although I think it’s unlikely that Anglo American will be unprofitable in 2023, I think it’s possible to reduce the dividend per share.

Therefore, I am considering investing a small amount of money here because of the yield, but only as part of a diversified dividend portfolio.