8%+ yields! Two dividend shares on my April shopping list

Could now be a good time to increase your passive income stream by buying more dividend stocks for your portfolio? I certainly think so!

I like some of the stocks I’ve seen at what I think are low prices right now. Here are two I would love to buy in April, if I have spare cash to invest.

M&G

I already own shares in asset managers M&G (LSE: MNG). But the recent share price fall combined with the increased dividend means the current yield is 10.9%. A is the double digit output of a FTSE 100 shows like M&G are not very common.

Could this be a signal that some investors fear a dividend cut? After all, an unstable market can cause investors to withdraw funds from asset managers, resulting in profits and losses. M&G made a loss of £1.6bn after tax last year.

It’s not good, but changes in asset value can reflect the earnings value of a company like M&G. I see the basic business as healthy. The company raises its annual dividend by 7%.

It has also spent half a billion pounds over the past year to buy back its own shares. This is the belief of the management that they have enough money to spare, in my opinion.

With a strong brand, ongoing customer demand for financial services and a footprint in more than two dozen markets, I think M&G has solid future potential. Shares have fallen 19% on the year and I consider the current price to be attractive.

Legal & General

Among other dividend stocks on the April shopping list are other financial services providers, Legal & General (LSE: LGEN).

The fund manager has a well-known brand, a storied heritage and a large customer base. It is also a profit machine, reporting post-tax earnings of more than £2bn in each of the past two years. For a company with a market capitalization of under £14bn, that’s pretty good. It also means that this dividend share is currently trading at a price-to-earnings ratio of 6. That seems cheap to me for a really high quality FTSE 100 like this.

Customers who withdraw funds are as much a risk to profits at L&G as they are at M&G. I think the businesses of different companies in different markets can help maintain a strong performance. Even in its worst year of the past five, the business managed to generate a post-tax profit of £1.3bn.

Although dividends are never guaranteed, Legal & General’s strategy is to raise annual payouts by single-digit percentage amounts. This means a 5% increase in each of the last two years. I think this is likely again this year. The current yield is 8.4%.

Legal & General has a higher yield than many FTSE 100 dividend stocks. But it is an established, highly profitable and proven business. I would love to put it in my portfolio for the long term.