This dividend growth stock looks like an unmissable buy as market volatility returns

I would rather buy a top FTSE 100 growth stocks when the market is falling rather than when it is rising. That reduces the chances of getting swept up in brief bursts of positive sentiment and overpaying.

So when the index recently shot above 8,000 for the first time, I stopped buying. When the stock market time is impossible, I suspect investors have become a bit too excited, and the pullback is inevitable.

This stock is getting cheaper

The pullback appears to be here, with the FTSE 100 down more than 3% from its latest high, trading around 7,750, at the time of writing. Hargreaves Lansdowne (LSE: HL) shares have fallen more than they have in the last year, and I’m finally ready to buy.

I have decided to buy an online investment platform for the year. I get scared when I see trades like 27 times earnings and only return 1.6% or so. I’d rather buy cheap stocks with high (but sustainable) yields, than the other way around.

Cheaper competing platforms seem to be rolling in when I feel that the stock market in general has gone too high. I am a long time customer of Hargreaves Lansdown, and rate their customer service, but feel overbought.

It looks like I’m right, as its share price has dropped 21.17% over the past year, and 51.26% over the past five years.

Hargreaves Lansdown is currently less expensive than it is today, trading at just 16.7 times earnings. The forecast yield is higher at 4.95%, comfortably above the FTSE 100 average of around 4%. Dividend cover is a little thin at 1.3, but management has a neat record of increasing shareholder payouts. Over the last five years it has steadily risen from 32.20p per share to 39.70p per share.

Of course, his fortune is closely tied to the stock market and last year was difficult. But last month, the report reported strong half-year growth, though “challenging” market conditions.

Hargreaves now looks like a buy

Revenue beat expectations, rising 20% ​​to £350m, with pre-tax profit up 31% to £197.6m. Despite the promising news, the stock has fallen 8% since then. I think now is a good time to buy.

Hargreaves Lansdown’s share price fell around 5% on Friday, as US investors panicked about the country’s banking stocks. That has nothing to do with Hargreaves Lansdown directly, but it has an obvious impact, as it does in financial services and the stock market in general.

Obviously, there are risks. If the central bank continues to raise interest rates, investor sentiment will pull back again. This will result in group assets in administration, reducing fee income. The latest banking crisis can cast a shadow over financial stocks like this, and I’m keeping Hargreaves Lansdown closed, to see the value.

For long-term investors like me, who aim to hold stocks for years, if not decades, a short-term drop in stock prices in the coming days can be a missed buying opportunity. Let’s see how it goes.