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16 June 2021
09:55 hour

This FTSE 100 stock has a 6.5% dividend yield. Should I buy?

The Motley Fool UK

10/06/2021 - 15:34

This FTSE 100 stock has a attractive dividend yield. But should I buy the shares based on the income only? Here’s my view on the company. The post This FTSE 100 stock has a 6.5% dividend yield. Should I buy? appeared first on The Motley Fool UK.


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  5. 3 tips to help me find the best-paying UK dividend stocks right now (08/04/2021 - The Motley Fool UK)
    The average FTSE 250 dividend yield at the moment is around 1.72%. If I look at the best-paying UK dividend stocks right now, I can find yields of almost 10%. However, just because a dividend yield is high, doesn’t mean I should always buy it. Also, even if the dividend per share is very high, this again doesn’t necessarily mean I should buy it right away. So here are my top three tips when I’m looking to buy UK dividend stocks. Checking out the numbers and sustainability My first tip to find the best-paying UK dividend stocks is to differentiate between a high dividend per share figure and a high dividend yield. The dividend per share is the amount I’ll receive when the dividend gets paid, multiplied by the number of shares I own. So if 10p per share gets paid and I own 100 shares, I’ll get a total of £10. This 10p per share might be a high number versus other firms. But what about the dividend yield? Well if the share price is 100p, then the yield is 10% and very attractive! But if the share price is 1,000p, then a 1% yield doesn’t sound amazing. So my tip here is that the best-paying dividend per share stocks might not offer the best dividend yield. A second tip is to look for the sustainability of a company paying out a dividend. After all, as a long-term investor, I want a UK dividend stock that’ll pay me out income for years to come. So the best (highest) dividend yield stock might actually not be the best one to buy. This is because the yield might be high because of a falling share price.  If a yield looks too good to be true, it probably is. The dividend might be scrapped, or at least reduced so that the yield falls closer to the average. Occasionally I can find a good company offering a yield in the 5-9% bucket that is sustainable, and these are ones I buy up quickly! Diversifying my UK dividend stocks The final tip I have when searching for the best UK dividend stocks is to think about a portfolio of stocks, not just one. In a similar way to when I buy stocks for capital growth, I don’t want to put all my eggs in one basket. I’d prefer to buy several stocks, each with different dividend yields, as this helps to spread my risk.  For example, I could buy shares in a company that has a dividend yield of 8%. To balance this out, I could also buy in to a business that is low risk but only has a yield of 2%. Already, if I invest equal amounts, I have a blended yield of 5%. It’s reduced the risk of owning just one stock.  Adding in more and more further reduces the company-specific risk, and allows me to average out at a yield I’m happy with overall. Not that risk can be completely eliminated as no yield is guaranteed. Finding the best-paying UK dividend stocks is a lot about number crunching. But it’s also about thinking smart, and looking beyond the numbers and towards sustainability of income. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading 2 UK penny stocks to consider in April 2 Cathie Wood stocks that have fallen 35%+ Should I invest my full ISA allowance at the start or end of the financial year? Here’s what I’d do about Lloyds Banking Group stock right now The Frasers share price is rising. Is this FTSE 250 stock a good investment? jonathansmith1 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. The post 3 tips to help me find the best-paying UK dividend stocks right now appeared first on The Motley Fool UK.
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  6. Hi guys I’ve recently started to get into the whole stock market so can anyone tell me when the author here talks about yield is he talking about dividend yield or stock returns as a whole? Because I’m sure the US stock market grew about 10% on an average? (24/04/2021 - Reddit Stock Market)
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  7. How does one calculate the dividend yield? (08/06/2021 - Reddit Stocks)
    If you go on https://stockanalysis.com/stocks/ko/ and look at Coca Cola details. It says Dividend $1.65 and Dividend Yield 2.96% ​ What would I get every 3 months if I bought $20k worth of KO? That would be around 360 shares. How would I calculate this? Is it 360 x 0.55 cents? Because the $1.65 divided by 3 months is $0.55? So $20k invested into KO would net me $198 every 3 months? Is this right? ​ What does the Dividend yield indicate?   submitted by   /u/Gothlander [link]   [comments]
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  8. 3 steps I’d follow to find cheap UK dividend shares to invest in (14/04/2021 - The Motley Fool UK)
    There are two components that are of interest to me when looking to find cheap UK dividend shares. The first element is the price, as I don’t want to be buying a stock that I know is overvalued. Second, I want to look at the dividend I’ll be receiving. I want to be happy with the dividend per share, along with the dividend yield. So on the basis of the above, three steps will help me along the way. Trying to find a cheap share The first step I could look at would be the price-to-earnings ratio, to try and find a cheap UK dividend share. Usually, a low figure could suggest the company is undervalued. This is because the size of earnings dwarfs the share price, which should be a good sign. If earnings attributable to shareholders are high, then it’s logical to think the dividend paid will be generous.  What makes a P/E ratio low enough to for me buy? That’s less easy to compute. Anything below the FTSE 100 average is a good starting point. However, P/E multiples also depend on the industry, so I would want to look at the ratio in comparison to competitors as well.  One point I do need to remember though is that a low P/E ratio doesn’t always mean a cheap UK dividend share. The stock’s history is important. For example, if the share price has been falling due to bad news, and the earnings figure used is stale, the ratio could be misleading. In fact, this could indicate the dividend might be cut, so I need to do my homework. Using yield and cover to find UK dividend shares Step two involves checking the dividend yield of different stocks within the market. This information is readily available, and gives me a good barometer regarding which UK dividend stocks offer the highest yield.  Just like the P/E ratio though, the figure has to be used carefully. Technically, I could just buy the stock with the highest yield. After all, this offers me the highest dividend relative to the price of the stock. But again, the share price may have been falling for valid reasons. If the last dividend was paid out several months ago, the dividend yield might not accurately reflect the current situation of the firm. It may see a dividend cut in the future, reducing the yield. So for UK dividend shares, I need to look at the sustainability of the dividend. This is my third and final step. I can use the dividend cover metric to help me in this regard. It shows how much the earnings cover the dividend. Logically, I want the figure to be above one, and a high number is beneficial. My thinking is that if the company has enough earnings to cover the dividend, then it ranks as a sustainable (and cheap) UK dividend share worth buying.  Although I need to be careful with financial equations, the above three steps involving ratios should help me when trying to pick out shares worth buying. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading 3 stocks I’d buy for this raging bull market JD Wetherspoon’s share price is rising. Should I buy this reopening stock now? The Tesco share price is falling. Here’s why I’d buy Carnival’s share price is rising. Should I buy this ‘reopening’ stock now? Can I buy shares in Coinbase? jonathansmith1 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. The post 3 steps I’d follow to find cheap UK dividend shares to invest in appeared first on The Motley Fool UK.
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  9. UWMC one of the best darkhorse stocks? Can't seem to think of a serious downside to this stock at the current price given the dividend. (22/04/2021 - Reddit Stock Market)
    I've had my eye on UWMC for awhile as it's trended down to just below its current price of $7.40. At that price I can't come up with a serious downside to the stock and am curious if anybody out there is seriously bearish on it and give a counter to my conclusion. Basically, UWMC's quarterly dividend is $0.10 which, at its current price, gives a yield of 5.4%. The S&P 500's average dividend yield is 2%. In essence, UWMC has a current dividend yield double that of normal blue chip stocks. Additionally, UWMC has only about 100 million Class A shares that are dividend eligible. Thus, it's dividend payout quarterly is $10 million, or $40 million annually. UWMC is a profitable company and, in normal times before COVID, it's net earnings in 2019 were over $400 million. In 2020, during the unique mortgage times, its earnings were $3.38 billion. Thus, even acknowledging 2020 was very unique in profitability, even during normal times UWMC's dividend is incredibly affordable. In essence, UWMC's dividend should be safe for the foreseeable future. Also, the existence of the dividend should set a minimum floor for UWMC. If, for example, it went down to $5 it would be an 8% dividend which I would think most investors would have to jump at. Realistically I expect the floor to be $7 as it's already double that of most blue-chip stocks. Which leaves me with what's the downside of UWMC? It's a well-established profitable company and isn't going bankrupt anytime soon. Has a good dividend yield already. Has a market cap that once it qualifies for S&P inclusion it probably should be included. What are the reasons not to just dump a bunch of money in it and, if it takes a while to go up, you'll be getting a hefty dividend in the interim.   submitted by   /u/JuanPabloElTres [link]   [comments]
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  10. Best dividend stocks to buy now: here’s my checklist (03/06/2021 - The Motley Fool UK)
    As an income-orientated investor, I’m always on the lookout for the best dividend stocks to buy now. This is because dividend yields are constantly changing. Although the interest rate on my cash balances doesn’t often change, dividend yields change due to movements in the share price and dividend payments. As a result, it’s handy for me to revert back to my checklist when thinking about adding new stocks into the mix. Checking why the yield is attractive It’s rare that a dividend stock would come onto my radar out of the blue. Most established FTSE 100 and FTSE 250 stocks have a history of paying dividends. So the best dividend stocks right now are likely candidates that have been on my list before.  For arguments sake, let’s say a company that I didn’t know well was offering a high dividend yield. This would interest me, and the first thing I’d look at on my checklist is why the yield is attractive. Which component was the driver – the share price or the dividend? If the driver was a falling share price, I’d be more hesitant to conclude that this was a dividend stock worth buying straight away. A falling share price could indicate that the company was in trouble. The knock-on impact of this could be that the dividend might actually be cut in the future. This might be done to preserve cash flow within the business. However, if the higher yield was driven by an increase in the dividend paid per share, this is a good sign. In this case, I’d be very interested to look at what has triggered this higher payout. If it was due to higher profits or an increased desire to pay out to shareholders, I’d consider buying the stock. The outlook for the best dividend stocks Another point on my checklist for the best dividend stocks to buy is the outlook for the company. One of the restrictions of the dividend yield calculation is that it takes the past payment figures. There isn’t a guarantee that the dividend payments for the future (after I buy the stock) would be the same. From this angle, I need to ensure that I’m happy with the future prospects for the company. I could look at what sector the business operates in and decide on that basis. For example, the reopening of the UK economy would provide a more positive outlook for areas such as retail, tourism, and travel.  A final point on my checklist is to mirror the future outlook with the past. Some of the best dividend stocks are the ones that have a solid track record of paying out dividends over several years. If I could satisfy myself that a firm with a track record of paying out income has a positive outlook, it would definitely be a stock I’d look to buy. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading FTSE 100 shares: B&M’s share price slumps as sales slow! The top UK dividend shares to buy now SThree’s share price at new highs after upgrading expectations! Here’s what I’d do now Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? 5 FTSE 100 growth stocks to buy in June jonathansmith1 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. The post Best dividend stocks to buy now: here’s my checklist appeared first on The Motley Fool UK.
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  11. Capital Gains + Dividend Income Account (01/06/2021 - Reddit Stocks)
    Hi Everyone, I have been trying to find the right balance of dividends and capital gains in a portfolio. I came up with 5 tickers ranging from high yield with poor performance to low yield with strong performance. Would love to hear what you all think. My current account yields 2.5% so this will increase it 2x which I’m happy about. VTI 25% - Dividend 1.25%, 5yr Change 102% QYLD 25% - Dividend 11.89%, 5yr Change 1.4% DIVO 20% - Dividend 5.36%, 5yr Change 43.43% BSTZ 15% - Dividend 5.41%, Change since inception 81.4% SCHD 15% - Dividend 2.69%, 5yr Change 88.7% This gives an overall dividend yield of 5.57%. Together the 5 tickers have had an average return of 60% for share price in the last 5 years. The exception is BSTZ which hasn’t been around for 5 years yet.   submitted by   /u/mike_oc23 [link]   [comments]
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  12. A trick to increasing your div yield by up to 50% in a bear market (27/02/2021 - Reddit Stocks)
    Buy 100 shares of a stock. Sell a ITM covered call on it. Make sure the extrinsic value is more than the dividend. Roll the call forward every month for a credit. Thus you get the full dividend even though you committed less capital (because you sold the ITM call) and you get a small credit for rolling. When you want to exit the trade, stop rolling and the call should be exercised when it gets to 2-3 months from expiry. This strategy is great if you think there is a possibility of a upcoming recession, since if the stock tanks your ITM call will go to 0 and tank the blow. And even if that doesnt happen, you get a higher dividend yield for your capital. (Yes this is basically a CSP, but using a CC lets you collect the dividends) LMK your thoughts on this.   submitted by   /u/yikejaw [link]   [comments]
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  13. I’d buy this FTSE 100 dividend stock with a 8% yield for my ISA right now (16/03/2021 - The Motley Fool UK)
    In the world of low interest rates that we’ve been in for the past year, hunting for yield has become more important to me. Some FTSE 100 dividend stocks can offer me a higher yield than I would get via alternative income paying investments. As the impact of the pandemic eases, I’ve started to see more companies reinstating dividends, or increasing the size of the dividend.  Whichever stock I choose to buy, I’m keen to put it in my ISA before the April deadline. This is because I’ll lose any of my allowance that I haven’t used up when the new ISA year starts. Holding the FTSE 100 dividend stock in the ISA allows me to collect the dividends gross, without having to pay tax on them. Strong results from a FTSE 100 stock One stock that I’d look to buy right now is Persimmon (LSE:PSN). The UK-based homebuilder currently offers me an attractive 7.98% dividend yield. This means for a £1,000 investment, I’d be picking up just shy of £80 a year in passive income. Persimmon is in a position to offer a generous dividend yield for a few reasons. The primary one is that it has plenty of free cash to distribute. Full-year results showed that cash increased from £843.9m in 2019 to £1,234.1m in 2020. This was helped in part by the large profit margins that Persimmon has. Gross profit margin stood at 31%, and even the operating profit margin was high at 27.6%. Ultimately, the higher the profit margin, the larger the profit. The larger the profit, the higher the cash generated that can be distributed to shareholders. Safe as houses? I think that the outlook for the FTSE 100 stock is positive, supporting the paying of dividends going forward. The average selling price was up 6.9% in 2020, to over £230,000. If house prices remain stable and continue to tick higher, this will support the business. I’m also conscious of the continued boost that the stamp duty holiday will have. A major spanner that could be thrown into the works would be any kind of re-introduction of lockdown later this year. Persimmon incurred £8m in costs to ensure a Covid-secure working environment last year. Even with construction being an industry that has been able to operate more than others during the pandemic, higher costs are a risk. If these costs increase, and access to raw materials and transportation is hindered, housing projects could be delayed. In turn, this may decrease free cash flow, with a small possibility of reducing the dividend yield. The eventual end of government schemes to help house-buyers could also hurt the firm one day. I’m personally ok with the above risk. The success of the vaccination programme so far leads me to conclude that this lockdown will be our last in the UK. Also, £8m in costs sounds a lot, but when you consider the profit before tax of £863m, it’s definitely manageable. Overall, I think this FTSE 100 dividend stock allows me to have a home for my money that will generate sustainable passive income. The dividend yield is attractive, and one that I think is relatively safe going forward. On this basis I’d look to buy Persimmon shares for my ISA. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading 5% and 9% dividend yields! 2 of the best shares to buy now 2 of the best FTSE 100 shares I’d buy now 5 UK shares I’d buy after Budget 2021 Here’s a FTSE 100 high-yielding stock I’d buy right now Dirt-cheap UK shares I’d buy ahead of the stock market recovery jonathansmith1 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. The post I’d buy this FTSE 100 dividend stock with a 8% yield for my ISA right now appeared first on The Motley Fool UK.
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  14. My 3 top FTSE 100 shares for extra dividend income! (11/06/2021 - The Motley Fool UK)
    On Tuesday, I wrote about my love of dividends: the regular cash payments paid by some companies to shareholders. Over the years, this passive income has really built up, contributing tens of thousands of pounds each year to my family portfolio. But most London-listed stocks don’t pay dividends. What’s more, just 10 FTSE 100 companies accounted for over half (54%) of all dividends in 2020, according to investment group A J Bell. As a dividend-loving investor, I’m always seeking high-yielding shares to add to my family portfolio. For me, one good place to look for chunky dividends is in the FTSE 100, where I see plenty of hidden value. Here are three Footsie dividend dynamos that I’d consider buying for their generous passive income. FTSE 100 stock #1: BATS (9.7%) British American Tobacco (LSE: BATS) is the world’s largest cigarette manufacturer. This makes BATS a stock for ethical and socially responsible investors to avoid. But BATS has been a FTSE 100 dividend darling for decades. The business — founded 119 years ago in 1902 — had global sales of £25.8bn in 2020. These huge revenues generate enormous cash flows, much of which is returned to shareholders as cash dividends. At Thursday’s closing price of 2,818.5p, BATS is valued at £64.6bn, making it a FTSE 100 super-heavyweight. At this level, BATS shares trade on a price-to-earnings ratio of 10.3 and an earnings yield of 9.7%. The dividend yield of nearly 7.6% a year is among the five highest yields in the Footsie. That’s why I regard this smoking stock as a top investment for income-seekers like me, although I don’t own BATS yet. Income share #2: LGEN (6.4%) Having worked in the insurance industry for 15 years, Legal & General Group (LSE: LGEN) is one British business I’ve grown to admire. As a household name founded in 1836, almost everyone in the UK knows of this leading provider of life assurance, savings, and investments. Today, L&G manages over a trillion pounds of wealth for more than 10m customers. In short, L&G is a class act in its sector — but it also faces intense competitive pressure from massive global rivals. On Thursday, L&G shares closed at 273.5p, valuing the group at £16.4bn — a FTSE 100 middleweight. Currently, this stock trades on a price-to-earnings ratio of 13.1 and an earnings yield of 7.6%. L&G’s dividend yield of 6.4% a year is among the top 10 in the Footsie. It’s pretty rare that I get such a high cash yield from such a solid business, which is why L&G is on my buy list for passive income. High-yield stock #3: GSK (5.7%) My third stock is pharmaceutical giant GlaxoSmithKline (LSE: GSK). This FTSE 100 share has jumped +17.3% from its 26 February low — good news for me as a GSK shareholder. I’ve held onto them for decades as the price has zigzagged between £10 and £20 since 2000. My loyalty comes simply because this global healthcare Goliath has paid an 80p-a-share dividend for the past five years. At Thursday’s closing price of 1,396.6p, this translates into a dividend yield above 5.7% a year. This £69.5bn FTSE 100 titan’s shares currently trade on a price-to-earnings ratio of 13.2 and an earnings yield of 7.6%. The next quarterly dividend of 19p is due to be paid on 8 July to shareholders as at 20 May. For now, I’ll keep holding this stock, although GSK plans to cut its dividend in 2021/22. However, if the coming cut is more than, say, 25%-30%, then I might finally sell and move on. The post My 3 top FTSE 100 shares for extra dividend income! appeared first on The Motley Fool UK. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading How I’d invest £500 in UK shares today Should I buy British American Tobacco (BATS) shares? The BATS share price gives an 8% dividend yield. I’d buy now 2 top dividend stocks with 6% yields My top FTSE 100 stocks to buy in June Cliffdarcy owns shares of GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. 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.
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  15. This FTSE 100 stock yields over 5%, making it a great passive income opportunity! (10/02/2021 - The Motley Fool UK)
    I look to FTSE 100 stocks for passive income opportunities to make my money work hard. Unfortunately, many firms have cut dividends since last year’s market crash. But there’s one stock, National Grid (LSE:NG), that I think is a great passive income opportunity for my portfolio. NG’s dividend yield is over 5%. FTSE 100 opportunity The average yield for a FTSE 100 company is 3%. Keep in mind that a higher yield isn’t always a good thing. A high dividend yield might indicate a business in distress. The yield could be high because the company’s shares have fallen in response to financial troubles, and the struggling company hasn’t cut its dividend yet. I class NG as a defensive stock. It possesses an enviable position at the heart of the UK’s energy ecosystem. NG owns the electricity transmission network in England and Wales. Further to this, it owns and operates the high-pressure gas transmission system in Great Britain too. NG’s current dividend policy aims to “increase dividend per share by at least RPI for the foreseeable future.” Not many FTSE 100 firms make such a bold and ambitious claim like this. I feel NG can achieve it, however. As I write this, NG’s yield is a juicy 5.7%. Analysts forecast this dividend yield based on 49.5p per share, which is an increase from the 48.57p paid out in March 2020. Of course, forecasts are not guaranteed and can change based on new developments. But NG’s policy of raising its dividend per share by the retail price index (RPI) makes me believe that its dividend yield could be 6%-plus later this year. If this happens, I would class it as one of the best FTSE 100 dividends, and it will certainly be a top passive income stock in my eyes. The NG share price is currently trading 16% lower than this time last year. Based on its defensive ability, the fact that it’s price has not reached or surpassed pre-crash levels is surprising. In fact, NG’s market crash low was 799p per share in March 2020. Nearly 11 months later and it has increased by less than 8%. This is where I feel an opportunity lies in picking up dirt cheap shares to help make a passive income. Risk but potential for passive income Utilities companies like NG aren’t completely without pitfalls and risks. NG is heavily regulated and there is always the threat of regulatory action. In addition to this, there is the threat of nationalisation in the background too. Furthermore, the power grid operator has to contend with huge capital expenditure bills. These can affect income, performance, and potentially even investment viability too. Nevertheless, I believe NG presents an excellent opportunity for me to make a passive income. It possesses solid defensive capabilities. At current levels I believe it is cheap too. Away from the FTSE 100, here is a FTSE AIM stock I really like right now too. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 6% dividend yields! A UK share I’d buy in February and hold for 10 years High dividend stocks: why I’d buy these 3 FTSE 100 shares yielding up to 8% The National Grid share price is down: should I buy it for my Stocks and Shares ISA? Why this is one of my top shares for reliable passive income in 2021 and beyond Jabran Khan 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. The post This FTSE 100 stock yields over 5%, making it a great passive income opportunity! appeared first on The Motley Fool UK.
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  16. 3 ways I aim to generate £250 a month in income from UK dividend shares (14/06/2021 - The Motley Fool UK)
    UK dividend shares are companies that pay out income to shareholders. If I buy shares in the business, then I become a shareholder. In this way, I’m entitled to the dividend paid out, and can work out my payment amount depending on how many shares I own and the dividend-per-share. Over time, I should be able to build up my dividends to a level I’m happy with. In this case, I’d like to generate £250 a month. To begin with, I need to assess how much I can afford to invest. This will then dictate which UK dividend shares I need to buy in order to make £250 a month. Each UK dividend share offers a constantly changing dividend yield. This calculation looks at the ratio of the last dividend-per-share that was paid, relative to the current share price. The share price changes all the time, as does the dividend yield. However, if I’m looking to invest right now, the swings in the yield over the course of a day or two shouldn’t materially change my opinion. Investing an upfront sum The larger amount of money I can invest upfront, the lower the dividend yield I need to target. For example, the FTSE 100 average dividend yield sits around 3%. So if I had £100k to invest, I could achieve my goal of £250 a month in dividend income just from the average yield. The benefit of this method is that I don’t need to take on high levels of risk for my investment. If it’s the average yield, the companies I pick at this level should be stable. The downside is that the initial investment needed into UK dividend shares is quite high. A second way would be to target a much higher dividend yield, enabling me to invest a smaller amount. I could buy several stocks that offer a yield between 6% and 7% instead. At this level, I’d only need to invest around £46k to begin with to make £250 a month.  This is much easier on my cash demands, so could be preferred. However, I do need to watch out as I’m targeting the highest dividend yields possible in the FTSE 100 index. In most cases, the higher the yield, the higher the risk associated with the income payments. Regular investments into UK dividend shares Instead of going for an investment into UK dividend shares all in one go, I could look to invest every year, quarter or month. I’d prefer to make monthly investments. If I invested once a year, I could have missed out on some opportunities within that year. After all, the market moves quickly (think about the stock market crash and reversal last March/April). If I invested £1,000 a month, I could build up to my level of £250 a month in income. As with before, I could choose the dividend yield to target. This would impact how long it would take for my pot to build up. At a 3% yield, it would take me just over seven years. At a 6% yield, I would hit the mark in-between years three and four. Of course, I have to remember that my returns aren’t guaranteed and I could lose money as well as make it. For that reason, I’d diversify my investments to ensure I’m not over-exposed to one company or one sector. The post 3 ways I aim to generate £250 a month in income from UK dividend shares appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Never sell Shell? I just sold my RDSB shares Shares to buy: 2 FTSE 250 stocks I’d snap up now Should I buy Lloyds shares today? How I’d invest my first £1k in UK shares UK shares to buy: 1 stock I’d acquire today jonathansmith1 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.
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  17. These UK shares have doubled and still yield over 7% (20/05/2021 - The Motley Fool UK)
    I like dividend-paying shares because the extra income can come in handy. Whether I spend it or reinvest it, dividend income is an important part of my investing strategy. So I’m always hunting for UK shares that offer an attractive dividend yield. Below I discuss one 7%+ yielding stock I’d consider picking for my portfolio. High-yield UK shares The stock in question is FTSE 100 member M&G (LSE: MNG), a well-known financial services provider in the UK. It was demerged from Prudential in 2019. I think due to its newness as an independent listed company, analysts have struggled to value it. That could explain why its yield has been among the highest in the FTSE 100. The company is best known for its asset management business. Last year, assets under management and administration rose 4% to £367bn. M&G dividend The company announced in March that it would raise its dividend. The payout for the full year came to 18.23p per share, made up of a 6p interim dividend and 12.23p final one. At the current share price, that’s a 7.7% yield. Among UK shares, I find that attractive. The M&G share price doubled in the past year. So today’s 7%+ yield looks attractive to me, but if I had got in this time last year I would now be looking at a yield of 15%. That’s far ahead of the market average. Is that a red flag? One reason these UK shares were marked down last year was the brevity of the company’s dividend history. But another was concern about how the asset management industry would fare. Amidst the economic downturn last year, it was unclear what the outlook would be for a company like M&G. I think that risk remains for an investment management firm such as M&G. If an economic downturn leads to less customer appetite for investments, revenues and profits could fall. M&G dividend sustainability One of the things I look at when a company has a high dividend is its sustainability. For the past couple of years, the dividend has been covered more than twice by earnings. The dividend was also covered by free cash flow. The company structure makes for a slightly complicated calculation, but it highlights cash remittances of £737m last year. That more than covered the cost of the dividend, at £562m. The disparity between revenues and earnings reflects the structurally low profit margins of the investment management sector. But for now, I see no reason why the dividend could not be supported in the future. However, dividends are never guaranteed. A shift in profitability could cut the company’s ability to pay out dividends, for example because of a more competitive landscape in investment management. Would I buy these UK shares? The M&G yield is attractive to me. I like the company’s strong brand and its commitment to a progressive dividend. I think its exposure to investment management at a time when many people have saved more than usual could be positive. With its 7%+ yield, I would consider buying M&G shares for my portfolio today. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading The best shares to buy now: 3 FTSE 100 bargains christopherruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Prudential. 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. The post These UK shares have doubled and still yield over 7% appeared first on The Motley Fool UK.
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  18. How can people possibly build any sort of passive income from dividend stocks?? (05/05/2021 - Reddit Stocks)
    I am doing DD on dividend stocks as a new investor. I am a little lost starting out. So, let's take Lowes as an example, a company that has consistently payed dividends for over 50 years. Right now their cost per share is 200.30$ Lowe's Companies pays an annual dividend of $2.40 per share, with a dividend yield of 1.20%. ... Lowe's Companies pays out 41.96% of its earnings out as a dividend. This is the information on Lowes yield % per share. So at a cost of 200.30$, you're only getting 2.40$ back every 3 months? You would have to own a very significant amount of shares to make this worth while, no? How do people make a worth while amount of money through dividend stocks when many of the reliable companies are at a very high price with typically below 2% yield? Are they finding not as stable companies with a higher yield? Do they diversify in someway that I would not understand? I'm currently researching pros and cons of Dividend stocks, and this is something that has halted me in my tracks a little.   submitted by   /u/Vrozini [link]   [comments]
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  19. An Equity REIT Portfolio with Average Dividend Yield of 4% (14/04/2021 - Reddit Stocks)
    What are your thoughts on an Equity REIT portfolio (no ETFs) balanced between growth and yield, no REIT paying more than 6% so this is not yield chasing and the average Payout ratio is at 76.3%. Filters: Internally managed FFO/Share (5y avg) Growth > 0% (positive) Forward Dividend Yield > 3% Dividend Growth > 0% (positive) Payout < 85% Debt/Assets < 60% Results: # of REITs: 24 Sectors: 8 Price/FFO: 20x Forward Div Yield: 4% FFO/Growth: 8.2% Dividend Growth: 4.1% Payout: 76.3% Debt/Assets: 43.4% Debt/Ebitda: 5.5x List: https://alreits.com/screener?country=USA&countryOperator=in&ffoUnitGrowth5y=0&ffoUnitGrowth5yOperator=gte&managementTeam=INTERNAL&managementTeamOperator=in&forwardDividendYield=3&forwardDividendYieldOperator=gte&payout=85&payoutOperator=lte&dividendGrowth=0&dividendGrowthOperator=gte&gearing=60&gearingOperator=lte   submitted by   /u/danielfc_ [link]   [comments]
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  20. Having trouble choosing between these two ETFs (19/04/2021 - Reddit Stocks)
    So I am a Canadian, love ETF's but I have a little issue. I cant decide what ETF between these. ​ So Basically they are the same Canadian ETF: VSP ​ USA ETF: SCHD ​ So I would like to buy VSP because its in my currency, CAD. But SCHD has better Dividend yield. VSP has a 1.43% Div yield and SCHD has 2.82%. Should I just convert my CAD to USD and buy SCHD because of the dividend yield? This is going to be a long term investment. 15 years+ ​ (Something to mention, I have a TFSA, Tax Free Saving Account. So I dont get taxed on dividends or capital gains) ​ Dividend information is from Marketbeat,com   submitted by   /u/Galion- [link]   [comments]
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  21. How I’m investing in dividend stocks to aim for £100 a week in passive income (07/06/2021 - The Motley Fool UK)
    Dividend stocks are one avenue that I like to use to generate passive income. Passive income enables me to earn money without having to put high levels of effort in. So I can continue to try to make profits from more active stock picking that require more research. When I blend the two together, my overall pot should be able to work harder for me than just doing one or the other. Passive income from dividend stocks One element that makes dividend stocks appealing for passive income is the yield. Technically I make passive income from my Cash ISA, but the amount is negligible. For companies that pay out a dividend, the income can be generous.  The way I calculate this is by looking at the dividend per share paid out relative to the price of the share. This is known as the dividend yield. The higher the yield, the more I’m squeezing the lemon.  I do need to be careful about high yields, as sometimes it can be too good to be true. A falling share price might inflate the dividend yield for a period. But the struggling company (hence the share price fall) might have to cut the dividend in the future. This would then reduce the dividend yield. So to make sure I get sustainable passive income from dividend stocks, I want to be sensible. The FTSE 100 average dividend yield sits just below 3%, which I think is still attractive. By being selective, I’d be happy targeting a yield of 5% without having a very high overall risk level. Crunching the numbers With a sustainable dividend being paid out into the future, I can now turn my mind to thinking of numbers. Let’s say that I want to make £100 a week on average in passive income from dividend stocks. It has to be an average as dividends often get paid once or twice a year. Even if I bought a dozen stocks, I’d struggle to get a payment each week! From here I just need to plug in the numbers and work backwards. I know my yield is 5% and my end goal is £100 a week (£400 a month). For a lump sum investment, I’d need to buy shares totaling £104,000. This sounds a lot to buy in one go. An alternative way could be to build up to the passive income target from dividend stocks. I could invest £1,000 a month, reaching my end goal just after seven years. From my point of view, working away at my goal for a few years to avoid a huge drain on my liquidity makes sense. So I’d prefer to do the second option. Either way, I can show that making good dividend income in a passive way is possible.  One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading American Express Shop Small is back: how can you make the most of it? Property prices are soaring! Should I buy top UK property stocks now? Where will the Shell (RDSB) share price go in June? The 2 best dividend stocks paying 7% today 2 hot UK mining stocks to buy today jonathansmith1 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. The post How I’m investing in dividend stocks to aim for £100 a week in passive income appeared first on The Motley Fool UK.
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  22. Two FTSE 100 dividend stocks I’d buy in March (04/03/2021 - The Motley Fool UK)
    FTSE 100 dividend stocks play a key role in my investment portfolio. Not only do they provide me with regular passive income, but they also provide my portfolio with a degree of stability. Here, I’m going to highlight two FTSE 100 dividend stocks I’d be happy to buy for my portfolio today. Both stocks are reliable dividend payers and currently offer attractive yields. A top FTSE 100 dividend stock One FTSE 100 dividend stock that strikes as a buy right now is Unilever (LSE: ULVR). It’s a leading consumer goods company that owns a wide range of well-known brands such as Dove, Persil, and Ben & Jerry’s. Analysts expect a dividend payout of €1.70 per share for FY2021 here. That equates to a yield of a very healthy 3.8% at the current share price.  There are a number of things I like about Unilever from a dividend investing perspective. Firstly, the company is relatively recession-proof. This is illustrated by the fact that last year, earnings only fell 2.4%. Companies that are recession-proof tend to be reliable dividend payers. Secondly, it has an outstanding dividend track record – it has compounded its dividends by around 8% per year since the early 1950s. Of course, Unilever is not perfect. One concern I have is that growth has slowed recently. Over the last three years, sales have declined. If growth does not pick up soon, the dividend payout could be reduced. The stock could also be at risk from the shift into more cyclical ‘reopening’ stocks we are seeing right now. Overall however, I think this FTSE 100 dividend stock looks attractive at present. I think Unilever’s forward-looking P/E ratio of 17.5 is quite reasonable given the company’s track record. A 4.9% dividend yield Another FTSE 100 dividend stock I’d snap up today is BAE Systems (LSE: BA). It’s a leading defence, aerospace, and security company. Analysts expect a dividend payout of 24.7p per share for FY21. That equates to a very attractive yield of 4.9% at the current share price. BAE Systems, like Unilever, is quite a ‘defensive’ stock. Because the company’s revenues are largely government-backed, it doesn’t tend to suffer from sudden sharp earnings contractions. Last year, the company held up pretty well, bar some supply-chain difficulties in the first half of the year. Overall, earnings per share were up 2% for the year, which is an impressive performance, all things considered. BAE is another company with a solid dividend track record. It’s worth noting that it did postpone its final dividend for 2019 last year due to Covid-19 uncertainty. However, it recently announced that it would pay this dividend (13.8p per share) in the near future, along with a final dividend of 14.3p for 2020. Before last year’s dividend postponement, the company had registered 15 consecutive dividend increases. One risk here is that US defence budgets could be cut. This could impact BAE’s revenues and earnings. Debt has also increased significantly recently after the group made two key acquisitions last year. However, with the stock currently trading on a rock-bottom P/E ratio of just 10, I feel that these risks are priced-in. I’d buy this FTSE 100 dividend stock today. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading FTSE 100 watch: 2 UK shares I’d buy before the ISA deadline A UK dividend stock I’d buy today for passive income Why I’d ignore the Lloyds share price and buy this UK share from the FTSE 100 The FTSE 100 index: the best shares to buy now Was I wrong about these quality stocks or is this a buying opportunity? Edward Sheldon owns shares in Unilever and Diageo. The Motley Fool UK has recommended Unilever. 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. The post Two FTSE 100 dividend stocks I’d buy in March appeared first on The Motley Fool UK.
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  23. 1 FTSE 100 dividend stock with a 6% yield that I’d buy right now (19/04/2021 - The Motley Fool UK)
    Last year, several large FTSE 100 companies decided to cut dividends due to the impact of the pandemic. This was to retain earnings and cash within the business in order to help operations. However, not all companies suffered during this period, and some continued to pay out funds to investors. Legal & General (LSE:LGEN) is one example in this regard. That underlines why I think it’s a top FTSE 100 dividend stock that’s worth me buying now. A resilient 2020 Legal & General is a financial services company that operates mainly in the asset and investment management space. The asset management arm is focused on markets here in the UK and in the US. The investment management arm is broader and has operations in many countries around the world.  Despite profit after tax falling 12% last year due to the pandemic, there were multiple positives to be taken away from it. What impressed me was the growth in the pension space, particularly in the US. It generated over $1.6bn in premiums in 2020, up 40% from 2019.  I think the outlook for 2021 remains positive as well. The company noted that it expects a lot of “repeat buyers” with key products, and described the UK as having a “healthy outlook”. Over the past year, the share price has risen around 43%. I think this attests to the resilience shown by the business during a tough period. Besides this, Legal & General also acts as a FTSE 100 dividend stock. The dividend yield currently sits at 6.3%. This puts it inside the top 10 highest yields available in the FTSE 100 index right now. Is this dividend stock sustainable? With interest rates low and some companies cutting dividends, a FTSE 100 stock with a dividend yield above 6% is high. I think that it’s sustainable though. The credit portfolio has had no defaults thus far, and is being actively managed. So I don’t see any immediate risk of having to tie up reserve funds due to potential bad debt. Of course, this could change, but at the moment it isn’t something that concerns me. Although not directed related to the sustainability of dividend payments, the business is clearly very solvent. Due to EU regulations, life insurers have to meet certain solvency ratios. This measures the amount of capital held versus liabilities. It should be enough to ensure that clients have a high chance of getting money back in the case of default. As of the end of Q1 this year, Legal and General estimated its Solvency II ratio to be at 192%, much higher than the required minimum. This was also up from the 2019 figure. This gives me confidence that the company isn’t in distress, and should continue to be a reliable FTSE 100 dividend stock. One potential downside with buying this stock for dividends is that there’s unlikely to be any large upside in dividend payouts in coming years. A new five-year strategy piece commented that from 2021 onwards the board intends to grow dividends “at low-to-mid-single-digits”. So from this angle, I could be better off finding a company that intends to grow dividends substantially going forward. Overall, I think Legal & General is a solid FTSE 100 dividend stock and would look to buy it for my portfolio. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Shares for passive income: my dividend heroes This is what I’d do about the Legal & General share price Three 6%+ yielding FTSE 100 UK shares I’d pick today jonathansmith1 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. The post 1 FTSE 100 dividend stock with a 6% yield that I’d buy right now appeared first on The Motley Fool UK.
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  24. The FTSE 100 is falling: three 7% dividend yield shares I’d buy now (11/05/2021 - The Motley Fool UK)
    The FTSE 100 is falling today. As I write, the big-cap index is down by around 2%. However, as a long-term investor this kind of short-term movement doesn’t worry me. After all, lower share prices make it easier to find bargain buys. I’ve been using the market’s weakness to hunt for reliable, high-dividend-yield shares. Each of the three companies I’ve found offers a forecast yield of at least 7%. I reckon all three could be decent value at current levels. Renewables are driving copper surge FTSE 100 miner BHP Group (LSE: BHP) is profiting from surging iron ore prices. The BHP share price is at a record high. But what interests me most is that this £120bn business is also one of the world’s largest copper producers. The price of copper recently hit a new all-time high of more than $10,000 per tonne. I think this could be significant. Although I’m unsure about the outlook for BHP’s ‘dirty’ commodities, such as coal and iron ore, I reckon demand for copper looks much safer. All forms of renewables and electric vehicles require a lot of copper. If renewable energy usage and electric transportation keep growing, then I think demand for copper will also continue to rise. BHP is expected to pay a record dividend this year, giving the stock a forecast yield of 7.7%. There’s a risk that 2021 could see earnings peak for miners, but I’d still consider BHP as a buy. A rising 7.7% yield My next pick is tobacco giant British American Tobacco (LSE: BATS). The BATS share price has been a poor performer in recent years, but the dividend has been growing. British American’s payout is currently rising by about 4% each year. With a 7.7% dividend yield available for new buyers today, I think this FTSE 100 stock could be a useful source of income. This ‘sin’ stock won’t appeal to all investors. But I can’t fault the numbers here. British American Tobacco reported an operating profit margin of 38% last year. The dividend was covered comfortably by surplus cash. The main risks I can see for shareholders are that tobacco regulations may get tougher, and that smoking rates might fall faster than expected. These are real concerns. But with BATS stock trading on 8.6 times forecast earnings and offering a 7.7% yield, I think the risks are reflected in the share price. I’d buy at this level. A top FTSE 100 performer My final pick is FTSE 100 motor insurance group Admiral (LSE: ADM). This business is known among investors for its profitability and consistent returns. Admiral’s share price has outperformed the FTSE 100 over the last five years, gaining 58% while the index has risen by just 13%. As I write, Admiral shares offer a forecast dividend yield of 8.2% for 2021. That’s unusually high for this business. The reason why is that shareholders are expected to receive an extra dividend payout this year, when Admiral returns the cash from the sale of its Confused.com price comparison business. Analysts expect Admiral’s dividend to return to normal next year. Broker forecasts currently show the dividend yield falling to 4.9% in 2022. I don’t know if Admiral will be able to maintain its historic growth rate under new CEO Milena Mondini. But on balance, I think the shares are probably fairly priced at the moment. I’d be happy to buy Admiral for my portfolio. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Best shares to buy now for passive income: 3 on my list Why I’d invest £5k in these FTSE 100 stocks right now! These two FTSE 100 stocks could pay £28bn in dividends for 2021! Here are 2 top dividend stock picks I think are ESG-investing-friendly FTSE 100 shares: 3 I’m considering for my ISA Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral Group. 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. The post The FTSE 100 is falling: three 7% dividend yield shares I’d buy now appeared first on The Motley Fool UK.
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  25. Revs etf with 20+% dividend yield?!? (19/04/2021 - Reddit Stocks)
    How is this stock yielding that much? When I look at the underlying assets it's low yielding large value companies like Johnson & Johnson. I have looked at a few different sources and they all show the same high yield, but something doesn't make sense.   submitted by   /u/lymph31 [link]   [comments]
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  26. Here are 2 FTSE 100 dividend stocks that I think have sustainable payouts (23/04/2021 - The Motley Fool UK)
    When looking for FTSE 100 dividend stocks to buy, I want to try and ensure that I’ll continue to receive income for years to come. I call this getting sustainable payouts. After all, I don’t want to spend unnecessary time having to buy and sell stocks because of dividend cuts. I want to try and make my dividend investing strategy as passive as possible. Here are two stocks that I think currently fit the bill. A resilient FTSE 100 dividend stock First up is Severn Trent (LSE:SVT). The UK-based utilities company provides water and waste services to millions. It has some operations abroad as well. Over the past year the share price is only up around 3%, but the main focus for me is the fact that it’s a dividend stock.  The dividend yield is currently above the FTSE 100 average at 4.1%. More than this, due to the performance of the company, I think it’s sustainable going forward. Half-year results through to the end of September 2020 showed good resilience despite the pandemic. Revenue was down 2.5%, largely due to the decrease in metered revenue. Even though profit took more of a hit, the interim dividend per share of 40.63p was still confirmed. This is because the company “recognises the critical role that dividends play in providing necessary income for pensioners and savers”. It has good liquidity, and £890m of unutilized facilities that it could call on, making the outlook for the company robust in my opinion. A risk could be that the bad debt provisions set aside could spiral higher and be a drag on the company. An additional £8.2m of bad debt charges was recorded in the half-year report. This is something I’d want to keep my eye on with this FTSE 100 dividend stock. A well-run investment manager The second FTSE 100 dividend stock that I think is sustainable for the future is Schroders (LSE:SDR). The dividend yield currently offered is 3.23%. This might just beat the average in the index, but I think the fact that the dividend is robust makes up for this. Schroders is a large investment manager, and so has to meet capital requirements from the regulators. As an investor, I see this as a positive, almost as if the business financials are being overseen by a third party. The company primarily makes money based on the amount of assets held under management. In the 2020 financial year, assets under management increased 15% to reach a record high of £574.4bn. But higher operating costs meant that profit after tax was broadly the same as the previous year. Good profits and good liquidity make me think that a dividend will continue to be paid to shareholders going forward. Over the past 10 years, the dividend yield for this FTSE 100 stock has averaged around the 3% mark. One potential risk I see is the expansion of services in China that is being pushed. Given the nature of the Chinese system, I think Schroders needs to be careful here, as many companies that have tried to crack the Chinese market have come away licking their wounds. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading 2 UK penny stocks to buy in a Stocks and Shares ISA right now 2 UK small-cap shares I’m considering right now This under-the-radar penny stock is crushing the market. I’d buy it today FirstGroup share price soars on £3.3bn US deal: should I buy? Should I buy NIO stock now? jonathansmith1 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. The post Here are 2 FTSE 100 dividend stocks that I think have sustainable payouts appeared first on The Motley Fool UK.
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  27. 3 FTSE 100 dividend shares I’d buy in May 2021 (04/05/2021 - The Motley Fool UK)
    FTSE 100 dividend shares play a valuable role in my portfolio. Not only do they give me with regular passive income (which I reinvest) but they also provide a degree of portfolio stability. Here, I’m going to highlight three top FTSE 100 dividend shares I’d buy today. All of these companies have good dividend track records and I think they’ve the potential to deliver healthy total returns (capital gains and dividends) in the long run. A top FTSE 100 dividend stock One FTSE 100 dividend stock I see as a buy right now is Reckitt (LSE: RKT). It’s a leading consumer goods company that owns a wide range of hygiene, health, and nutrition brands. The prospective dividend yield here is about 2.7% as analysts expect a dividend payout of 175p per share for 2021 (note: dividend forecasts aren’t always accurate). I think Reckitt is well-placed for growth in the current environment. Right now, demand for its hygiene products (Dettol, Lysol, etc ) is high due to Covid-19, and I expect demand to remain strong for a while. Meanwhile, as the world reopens, demand for other products in the company’s portfolio such as painkillers (Nurofen), cold and flu products (Strepsils, Mucinex), sexual health products (Durex), and digestive health products (Gaviscon) should pick up. It’s worth pointing out that Reckitt is facing some challenges. Its nutrition segment continues to underperform. This is something it needs to sort out. Overall, however, I think the stock has a lot of appeal at present.  A 4.9% yield Another FTSE 100 dividend share I like right now is BAE Systems (LSE: BA). It’s a leading defence, aerospace, and security company. It’s expected to pay out 24.8p per share in dividends this year which, at the current share, equates to a prospective yield of about 4.9%. One thing I like about BAE Systems is that it’s a fairly reliable dividend payer. It did postpone its dividend payout during Covid-19. However, before that, it had registered 15 consecutive dividend increases. Another thing I like is that the group is moving into higher-growth areas. Recently, it formed a partnership with Australian RegTech firm Kyckr. Under the partnership, the two companies will offer enhanced KYC (know your customer) solutions and help regulated firms solve anti-money laundering and compliance challenges. One risk here is that defence budgets could be cut. This could impact future growth. However, looking at the valuation (the stock’s P/E ratio is just 10), I think this risk is priced in. A high-dividend FTSE 100 stock Finally, I like financial services major Legal & General Group (LSE: LGEN) as a high-yield play. The prospective dividend yield here is about 6.7% at present. I don’t normally go for high-yield stocks. A lot of the time, companies with high yields are facing big challenges and their shares turn out to be very poor long-term investments. Legal & General doesn’t strike me as this kind of company however. This is a business with a solid balance sheet and decent long-term growth prospects. In March, the company said it expects to deliver long-term, diversified growth across the group. Like other financial services stocks, LGEN can be volatile at times. So, it’s not a ‘defensive’ dividend stock. This means it may not be suitable for all investors. I’m comfortable with the volatility though. With a yield of nearly 7% on offer, I think the risk/reward proposition here is attractive. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Reckitt Benckiser share price falls after sales leap. Do I buy Reckitt? 3 investments to buy for a Stocks and Shares ISA 2 cheap penny stocks and 1 FTSE 100 share to buy in my ISA! 1 FTSE 100 dividend stock with a 6% yield that I’d buy right now Shares for passive income: my dividend heroes Edward Sheldon owns shares in Reckitt, BAE Systems, and Legal & General Group. 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. The post 3 FTSE 100 dividend shares I’d buy in May 2021 appeared first on The Motley Fool UK.
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  28. Pick One: Moderna vs Pfizer (10/04/2021 - Reddit Stocks)
    As the title says, if you had to pick one stock to hold for the rest of your life, which would it be and why? Moderna $56bn market cap (Co-founder selling shares)[https://www.barrons.com/articles/moderna-co-founder-noubar-afeyan-sells-large-blocks-of-stock-51618004656?siteid=yhoof2] 0.0% Dividend yield Big-time potential with mRNA therapeutics Pfizer 4.3% Dividend yield Released mRNA vaccine $204bn market cap - is there room to grow? I hold no positions in either. Just interested in a discussion and the perspective of others.   submitted by   /u/muninn_77 [link]   [comments]
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  29. Thoughts on T in terms of long term growth vs dividend yield? (20/02/2021 - Reddit Stocks)
    I’m considering using it as a long term money bank, for savings(not trade money, but also not emergency fund money either) I’ve held a position in it before I know it’s stable enough but not the best gainer( although I do see a positive future with HBO) the dividend yield though has been one of the best in terms of stocks I’ve found so far. Any insight I may have missed on them? I know they are looking to sell direct tv, but I can’t really see that affecting them too much. At the end of the day, are the yields good enough to warrant any small losses they may incur over the next few years? Edit: for additional info on AT&T if I’m correct their last yield was 6.8% and they raise their yield pretty regularly over time   submitted by   /u/NickkyDC [link]   [comments]
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  30. Passive income investing: 3 common mistakes I’m trying to avoid (03/05/2021 - The Motley Fool UK)
    Using dividend stocks as part of passive income investing is becoming increasingly popular. It’s something that I do and something I should really do more of with my cash! In a low-interest-rate environment, there’s a high opportunity cost of not making my money help make me more money. But the rush to simply find a home for my cash via dividend stocks can lead me to make unnecessary mistakes. This is something I need to be careful of. Having the right expectations for income investing One of the common mistakes I see with passive income investing is simply trying to target the highest possible income payment from a stock. Simply looking at the highest dividend per share as a monetary figure is not always wise. For example, if I buy a stock with a share price of 100p and a dividend per share of 10p, my yield is 10%. But what if the dividend per share is 10p, but the share price is actually 1,000p? Then my yield is only 1%. So just looking at the dividend per share isn’t a true reflection of the overall return for this part of my passive income investment. A better way is to look at the dividend yield, which factors in the share price to provide a percentage yield. This yield still changes every day, but gives me a better comparable number to work with compared to other dividend stocks. A second common mistake I could make would be to think that all the future dividend income is guaranteed. As much as I’d like to plan for years ahead how much passive income my stocks will definitely make me, it’s not always possible.  I do always try to find dividend stocks that historically have been paying out regular dividends. Yet unexpected company-specific events, or a wider problem (like Covid-19), can impact things. This could cause the dividend to be reduced, lowering my income in this regard.  By knowing that this can happen I can reduce the surprise here, and ensure that any projections I do take into account a margin of error. Diversifying my stocks The final mistake I’m wary of making is putting all my eggs in one basket. I might find a company with a great outlook and a strong track record of paying dividends. Even in this case, I’d be making a mistake to just buy this one stock in my portfolio for passive income investments.  Buying multiple shares helps to spread out my risk and also my overall yield. For example, I might decide to buy a slightly-high-risk stock with a generous yield of 8%. If I supplement this with a low-risk, stable stock offering a yield of 4%, then it enables me to reduce my risk. At the same time, my yields blend together, giving me a higher yield than just picking low-risk companies. The more money I’m looking to invest, the more stocks I’d look to buy to spread the risk. Overall, passive income investing isn’t a new concept, and so hopefully I can learn from these mistakes going forward. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading How I’d double my money investing in stocks and shares Forget the Lloyds share price. These FTSE 100 shares can make me a passive income Shares to watch in May Should I buy these FTSE 100 shares in my ISA in May? Which are the highest dividend yield stocks to buy right now? jonathansmith1 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. The post Passive income investing: 3 common mistakes I’m trying to avoid appeared first on The Motley Fool UK.
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  31. FTSE 100 shares I’d buy for large and growing dividends (23/05/2021 - The Motley Fool UK)
    FTSE 100 shares are arguably still undervalued. It’s often argued UK companies remain cheap when compared to other regions of the world. A spate of recent purchases of UK-listed companies gives some credibility to this argument. A combination of value, as well as income from dividends as they recover and grow post pandemic, have brought these two FTSE 100 shares onto my radar. Cheap FTSE 100 miner Rio Tinto (LSE: RIO) is one of the world’s leading mining companies. It certainly won’t be everyone’s cup of tea on ESG grounds, but if I look past that, it’s a FTSE 100 share that strikes me as being good for income. The dividend payout has been particularly strong in recent years, with consecutive special dividends pushing up the yield. The current dividend yield is 5.2%, far above the average for the FTSE 100. Projections are the dividend could end up being more like 10%.  A weaker than expected start to 2021 is a risk I’ll keep an eye on. I think expectations for miners are high as economies reopen following the pandemic. Underperformance will likely hit the share price. Another risk is around the reputational damage caused by blowing up sacred caves in Australia. The incident has had political recriminations and led to executive replacements and a pay revolt from shareholders. Rio Tinto is certainly not a buy and forget share. The mining industry is too cyclical for that. However, for the next few years it could be a sector that produces strong and growing dividends. More evidence of a commodities supercycle, where commodities do well for an extended period of time, might encourage me to buy the shares. Steady, defensive company The insurance company Admiral (LSE: ADM) is a more defensive high-yielding FTSE 100 share. In that way, it would potentially complement the more adventurous Rio Tinto in my portfolio. Admiral has a dividend yield of 4%, slightly above the FTSE 100 average, but more importantly than that it raised its dividend by just under 44% between 2019 and 2020. That’s an impressive rate of growth for a FTSE 100-listed company. It is a strong sign of confidence from management. The insurer has a business model that provides it with income no matter what the economic backdrop is. That’s why I believe it will be able to keep paying a large, but also growing, dividend. Since lockdown, it has performed particularly well financially. The share price has also done well over at the same time. In the year to 31 December 2020, pre-tax profit from continuing operations pushed up 20% to £608.2m. The insurer also gained more customers. With earnings per share also growing year-on-year, I’m confident that Admiral is a well run company with a profitable future. Both Rio Tinto and Admiral are FTSE 100 shares that I think could perform well over the coming years. I also happen to think in my portfolio the cyclical miner and the defensive insurer could make a complementary pairing. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Will the Admiral share price reach £35? The FTSE 100 is falling: three 7% dividend yield shares I’d buy now Why I’d invest £5k in these FTSE 100 stocks right now! These two FTSE 100 stocks could pay £28bn in dividends for 2021! 2 FTSE 100 stocks I’d buy in May Andy Ross owns no share mentioned. The Motley Fool UK has recommended Admiral Group. 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. The post FTSE 100 shares I’d buy for large and growing dividends appeared first on The Motley Fool UK.
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  32. How I’d invest £1,000 in top dividend stocks (20/05/2021 - The Motley Fool UK)
    There are plenty of different ways that I could choose to put a spare £1,000 to work. Some investments would offer me a focus on capital appreciation, or capital preservation. In some ways, I might like to try and simply beat the rate of inflation. But what about if I want to target income accumulation? In this case, I’d look to invest in top dividend stocks. Here’s how I’d do it. Starting at the end To begin with, I’d want to actually look at my end goal. This might seem to be the wrong way around of looking at things, but bear with me. My end goal for my £1,000 could be to build up the income and reinvest it to a target of £2,000. Or it might be to make the money sweat enough to generate me £50 a month in passive income.  Depending on what my goal is, will impact how I go about making the investment.  Once I’ve got my goal figured out, I then need to think about how I can get to it. For example, if my goal is to reach £100 a year in passive income, then I know I’ve got to somehow get a 10% dividend yield across the companies I invest in. By thinking about the numbers, it can help me to figure out quickly whether my goal is too ambitious or achievable. Looking at specific top dividend stocks After I’ve made the numbers add up, I then want to drill down into the specific companies I’m going to invest in. This is an important step as I’ll likely have various top dividend stocks to choose from. For example, let’s say I need to achieve a 4% dividend yield for the next decade. There are currently 22 different FTSE 100 stocks that I could pick that fit the description. From the 22, I want to look at what specifically makes one a top dividend stock. The yield is one element, but other important factors include the dividend cover and the dividend outlook. After all, the dividend yield is a backward-looking number generated from the last dividend that was paid out.  In this way, I can hopefully prevent (or at least minimise) some downside risk. This risk would be that the dividend stocks I invest in cut the payment in the future. This would reduce my passive income and hinder my pursuit of reaching my goal. Buy and hold Once I’ve picked the selection of dividend stocks that I want to invest in, I’m almost finished. I’d decide whether I wanted to split my £1,000 evenly into the different stocks, or rather increase my allocation to a particular share for some reason.  From there, I’d buy the stocks and wait for the next dividend payment date to receive my first income amount, while also accepting that dividend income isn’t guaranteed. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading All you need to know about the Chia cryptocurrency Michael Burry is shorting Tesla stock. Here’s what I’d do now 3 UK shares I’d buy over Lloyds Banking Group today 34% of 45-54-year-olds have debts they don’t know how to pay off Vodafone shares have dropped sharply. Should I buy? jonathansmith1 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. The post How I’d invest £1,000 in top dividend stocks appeared first on The Motley Fool UK.
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  33. Monthly Income From Dividends - Building a portfolio to maximise returns for reinvestment every month. (26/04/2021 - Reddit Stocks)
    Hello everyone, I’ve basically been working on trying to build a monthly income from high yielding monthly paying dividends and just wanted some clarification on workings and whether the below would work. I have downloaded a spreadsheet of all the monthly dividend paying companies, and work out the best value for money based on dividend yield and price. Appreciate there will be some price differences between the below and current as this was put together some time ago. I also understand that dividend payments can change and price fluctuations could effect income and P/L. I also understand that using this method may not draw out the ‘best’ companies. OXSQ - $4.65 - 9% Yield ($0.04 Monthly) - $13,953 - 3001 Shares PBA - $28.54 - 6.9% Yield ($0.22 Monthly)- $15,599 - 547 Shares PFLT - $11.98 - 9.5% Yield ($0.09 Monthly) - $15,914 - 1328 Shares PSEC - $7.81 - 9.2% Yield ($0.057 Monthly) - $16,388 - 2098 Shares AGNC - $16.89 - 8.5% Yield ($0.115 Monthly) - $17,551 - 1039 Shares DX - $18.97 - 8.5% Yield ($0.128 Monthly) - $17,805 - 939 Shares So does this mean for roughly $97,000 I can get paid roughly $720 per month? I’m from the UK so it basically translates to £71k for roughly £570 per month. The plan is to slowly build the portfolio, one stock at a time achieving the total number of shares to provide roughly £100pm, reinvesting the dividends as I go. I will eventually (if achieved) continue to add more ‘secure companies’ paying monthly/quarterly dividends stocks (AT&T Etc). Just wanted to know peoples thoughts, risks, advantages / disadvantages and whether this would be feasible. Thanks!   submitted by   /u/Smouty95 [link]   [comments]
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  34. National Grid share price: I think this is one of the best FTSE 100 stocks out there (24/03/2021 - The Motley Fool UK)
    I believe that National Grid (LSE:NG) is one of the best FTSE 100 stocks out there. I class it as a defensive stock based on its position within the UK’s energy infrastructure. Furthermore, it has an excellent dividend yield to help me make a passive income. It’s latest move has solidified my stance too. Makings moves National Grid owns the electricity transmission network in England and Wales. In addition to this, it owns and operates the high-pressure gas transmission system in Great Britain too. I have always classed energy and infrastructure stocks as defensive as they are essential commodities required by everyone. Last week National Grid announced it was buying the holding business of Western Power Distribution. Western Power Distribution is classed as the UK’s largest electricity distributor. The deal is worth a mammoth £7.8bn. Part of the deal sees NG selling one of its US division’s electricity businesses for $3.8bn. These deals are ensuring that National Grid’s UK arm is strengthening its grip on the electricity market in the UK. I believe such a big move makes NG a great FTSE 100 pick. FTSE 100 opportunity As I write, I can buy shares in National Grid for 855p per share. This is still 5% lower than this time last year. I consider its share price to be relatively cheap. To provide further context, in February 2020, shares were trading for over 1,000p per share. I believe these levels could be seen once more. The average yield for a FTSE 100 company is 3%. Keep in mind that a higher yield isn’t always a positive. A high dividend yield could indicate a business in trouble. The yield could be high because the company’s shares have fallen in response to financial issues, and the struggling company hasn’t cut its dividend yet. I do not believe this is the case for National Grid. As I write this, NG’s yield is over 5%. NG’s policy of raising its dividend per share by the retail price index (RPI) makes me believe that its dividend yield could be 6%-plus later this year. If this happens, I would class it as one of the best FTSE 100 dividends, and it would certainly be a top passive income opportunity too, in my opinion. National Grid rewards aren’t without risk National Grid is in a heavily regulated industry, which presents some risks. Regulators could enforce a profit cap which may affect investment viability. In addition to this, it could face massive capital expenditure in the face of repairs if anything significant were to affect its network. This expenditure can affect the bottom line and affect investor confidence too. The threat of nationalisation always looms in the background too. Aside from the risks, I believe there is a lot to like about National Grid, which is why I class it as a top FTSE 100 pick. Its recent ambitious move, coupled with a cheap share price and a juicy dividend yield make me believe it could be a fruitful addition to my portfolio. As a savvy investor, I like to diversify my portfolio. Here is another FTSE 100 stock I like that has fallen in price.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Why I’d back the National Grid share price after the its latest move I’d buy these top British stocks in an ISA today 3 UK shares to buy to generate a passive income Jabran Khan 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. The post National Grid share price: I think this is one of the best FTSE 100 stocks out there appeared first on The Motley Fool UK.
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  35. The top UK dividend shares to buy now (03/06/2021 - The Motley Fool UK)
    I’ve already examined some of my favourite dividend picks in the FTSE 100. And the top London index is usually my first port of call when I’m looking to top up my income portfolio. But I see many UK dividend shares spread across the whole of the stock market that I really would buy today. For long-term income, I think it’s hard to beat a good investment trust. I hold City of London Investment Trust, which I bought on a yield of 5.2%. With the shares having gained a little, that’s now down to 4.8%, but I think it’s still a great yield. City of London heads up the Association of Investment Companies’ list of dividend heroes, having lifted its dividend for 54 years in a row. Others on the list that I’d buy for long-term dividends include Murray Income Trust (47 years of rises, with a 3.8% yield), Merchants Trust (39 years, 5.2% yield) and Schroder Income Growth Fund (25 years, 4%). I’ve always considered housebuilders among my favourite UK dividend shares. Investors will mainly think of the big FTSE 100 ones, like Taylor Wimpey and Persimmon. But I see some very attractive dividend yields from FTSE 250 builders. Dividends have been held back by the pandemic, but I expect them to recover. And prior to Covid-19, Redrow shares yielded 5.6% in 2019, Bellway paid 5.1%, and investors pocketed 4.9% from Countryside Properties. Housebuilders might go through some ups and downs, but I see long-term market demand delivering steady cash flow for shareholders. Cash from property rental Speaking of housebuilders, the buy-to-let business is a popular one. But it can be risky for small landlords, and plenty can go wrong. That’s why I’d look at Grainger, which bills itself as one of the UK’s largest professional landlords. With a big property portfolio and enjoying economies of scale, Grainger has been growing its dividend. The yield is only around 2% right now, but it’s grown at a compound annual rate of 5.4% for the past decade. Any list of my favourite UK dividend shares has to include the insurance sector. It’s another cyclical one, but insurance can be a top long-term generator of cash. And right now, I like the look of Direct Line, another FTSE 250 stock. Like the rest of the sector, Direct Line had to rein in its 2019 dividend. But we have already seen a return to progressive payments, with a yield of 6.9% paid for 2020. The best UK dividend shares? And while I’m thinking of the financial sector, what about Moneysupermarket.com? The price comparison site has plenty of competition, and not many people have been using it to find the best holidays of late. And the share price has gone pretty much nowhere overall in the past five years (though in a rather volatile way). But the dividend has been growing steadily, and yielded 4.5% for 2020. So are these the best UK dividend shares out there right now? Well, dividends aren’t guaranteed (as we saw last year) and they might have to be reduced. But this is just a look at some potential dividend buys that I have on my shortlist, from some of my favourite sectors. I already own shares in a couple I’ve mentioned, and I’m very likely to add some of the others too. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading SThree’s share price at new highs after upgrading expectations! Here’s what I’d do now Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? 5 FTSE 100 growth stocks to buy in June The Foxtons share price has doubled: here’s what I’d do now Have I missed the stock market recovery? Alan Oscroft owns shares of City of London Inv Trust and Persimmon. The Motley Fool UK has recommended Moneysupermarket.com and Redrow. 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. The post The top UK dividend shares to buy now appeared first on The Motley Fool UK.
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  36. Stock investing: 3 of the best income shares I’d buy right now (10/02/2021 - The Motley Fool UK)
    Stock investing can be challenging, especially when it comes to finding the market’s best income shares. Indeed, company dividends are never guaranteed. And chasing yield, or finding the stock’s with the highest dividend yields on the market, can be a risky strategy. A high dividend yield can often be a sign that the market doesn’t believe the payout is sustainable.  With that in mind, here are three of the best income shares I’d buy right now.  Stock investing: the hunt for income  Imperial Brands (LSE: IMB) might not be to everyone’s taste. The company is one of the world’s largest cigarette suppliers, which could put some investors off the business. Ethical considerations aside, the enterprise is highly cash generative. This suggests to me it can afford to return large amounts of cash to investors.  At the time of writing, the stock supports a dividend yield of around 9.4%. That appears incredibly attractive in the current interest rate environment. However, the company is facing challenges. Cigarette sales around the world are falling, and Imperial’s attempt to diversify into so-called reduced-risk products hasn’t yet produced results management would have liked. These issues could put pressure on the dividend in future.  Still, I’d buy the stock based on its current fundamentals.  Income shares on offer  I think there are lots of income stocks currently on offer in the FTSE 100. Two stock investing options that stand out to me right now are BHP (LSE: BHP) and DS Smith (LSE: SMDS).  Both of these companies have their own unique qualities. BHP is the world’s largest mining group, and DS is one of the world’s largest suppliers of paper and packaging products. Both organisations can use their size to achieve economies of scale and produce better returns for investors.  That doesn’t mean these companies are without their risks. Both are highly reliant on commodity prices, which can be incredibly volatile. This means profits can jump up and down from year to year, potentially reducing shareholder returns. Nevertheless, both companies are some of the best income shares on the current market, despite these risks. BHP offers a regular dividend yield of 3.3% while DS is projected to yield 2.2%. These yields may pale in comparison to that of Imperial Brands, but I don’t think it’s right to concentrate on yield alone. As mentioned above, buying shares with high yields could expose me to unnecessary risks. That’s why I’ve always focused on businesses like BHP and DS Smith. These firms may not have the highest yields on the market, but their size and competitive advantages should help them achieve steady growth year after year. This growth should support the companies’ dividend payouts to investors and give them headroom to expand the distributions. That’s why I’d buy these income shares for my portfolio today.  There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading UK stock investing: 2 of the best dividend shares to buy right now I’ll avoid the Cineworld share price. Here is a pick from my best stocks to buy now list instead The BHP share price is fluctuating! Is this FTSE 100 mining stock worth buying? A dirt-cheap FTSE 100 share to buy today for passive income 2 of my favourite UK shares to buy in an ISA after the 2020 stock market crash Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended DS Smith and Imperial Brands. 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. The post Stock investing: 3 of the best income shares I’d buy right now appeared first on The Motley Fool UK.
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  37. How I’d aim to earn a rising passive income from dividend stocks (30/05/2021 - The Motley Fool UK)
    One of the best things about FTSE 100 shares is that they can help investors to generate a rising passive income for retirement. During the wealth-building phase, I would reinvest my dividends for growth. After I stopped working, I would draw them as income. Given that most companies aim to increase their dividends every year, that income should rise over time. I would then use it to top up other sources of retirement income, such as my State Pension and workplace one. That income may be ‘passive’, but it should allow me to enjoy an active retirement, by generating income to spend on the activities I enjoy. I’d buy FTSE dividend stocks for my retirement Dividend income is not guaranteed, of course. As we saw last year, companies are free to scrap or suspend their payouts at any time. That is why I would invest in a spread of stocks, to reduce the risk to my income stream from one or two doing this. Investing in top FTSE 100 dividend stocks is particularly attractive right now, when the average savings account pays 0.06%. It is possible to generate a passive income of 5% a year, and more than 7% on one or two companies. That is quite incredible, when I consider the alternatives. I don’t just look at the headline yield when buying dividend stocks. Sometimes a really high yield can be bad news, rather than good. Yield is calculated by dividing the dividend per share by the company’s share price. So if the dividend is 5p and the stock trades at £1, the yield is 5%. If profits slump and the share price crashes to 50p, that yield leaps to 10%. That looks great, but the company may struggle to fund shareholder payouts from shrinking profits. I plan to live on a rising passive income One way to work out if that passive income stream is sustainable is to examine the company’s dividend payout ratio. This is calculated by dividing the last full-year dividend by net profit. A number below 100% suggests payouts are affordable. I also examine dividend cover, and feel far more confident when the payout is covered twice by profits. Forward earnings projections (and recent growth) may also indicate whether the company can continue to generate the cash it needs to deliver the rising passive income I crave. Another way of seeing whether the passive dividend income is secure, is to examine prospects for the company’s sector. BP and Royal Dutch Shell have been a tremendous source of dividend income, but oil companies may struggle as competition from renewables grows. Every company is exposed to unexpected shocks, as we have seen in the pandemic. I would improve the odds by targeting companies with loyal customers, strong balance sheets, minimal debt, and a defensive ‘moat’ against competitors. Cash is 100% safe but is being eroded by rising inflation. By investing in top FTSE dividend stocks, my passive income will hopefully rise in real terms. This stock tempts me. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading What’s happening to the Cineworld share price? 2 UK shares I’d buy in my Stocks and Shares ISA in June 2 UK shares I’d buy in June 2 UK penny stocks I’d buy for my ISA in June 5 UK shares I’d buy with £5k Harvey Jones 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. The post How I’d aim to earn a rising passive income from dividend stocks appeared first on The Motley Fool UK.
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  38. I’d invest £1,000 in these top UK dividend stocks for passive income today (11/05/2021 - The Motley Fool UK)
    Whether I’ve got an existing portfolio of dividend stocks or am just starting out, investing £1,000 is rarely a bad thing. It allows me to put a good chunk of money to work. Hopefully, from good decision-making I can look to generate passive income at a rate that’s higher than other alternatives. With that in mind, here are some of the areas that include the top dividend stocks right now, in my opinion. What makes a top UK dividend stock? Before I go straight into specifics, I want to clarify what I mean when referring to a top UK dividend stock. It’s not just the stocks that offer the highest dividend yield. This is because a high yield isn’t the only factor that goes into my decision-making. Other factors include the dividend cover, the history of past dividend payments and my personal outlook on the company. For example, I might consider a relatively-low-dividend-yield stock to be a top contender if the company is likely to make a high profit this year and pay out a generous future dividend.  On the flipside, I’m unlikely to put in my category of top UK dividend stocks a firm that has a falling share price and a falling level of dividend cover. Even if the current yield is 10%+, I’d be concerned here. Where I’d look to invest now Now that I’ve got a clearer picture of what exactly I’m looking for in a top UK dividend stock, I can move forward. At the moment I’m keen on companies within investment banking and financial services. I’d be selective and avoid high street banks due to the tough 2020 they saw. However, I’d look towards asset managers and insurance providers. Examples here include M&G, Schroders and Standard Life Aberdeen. I like these companies because the dividend yield is higher than average. At the same time, the business models are robust and so liquidity shouldn’t be an issue in paying out dividends going forward.  The downside of targeting this industry is that they are all exposed to the potential of another stock market crash. If investors pull out funds from these providers then assets under management (and fees) would fall. However, with the FTSE 100 pushing past 7,000 recently, I see this risk as small. Another area in which I think I can find top UK dividend stocks is utilities. I see them as being robust and sustainable, having made it through the pandemic relatively unscathed. Consumers may shop around more for a provider, but the industry in general is a necessity.  To this end, I like SSE, United Utilities and Severn Trent. The lowest yield here currently is circa 4%, so above the FTSE 100 average of 2.9%. I do need to watch out for any potential dividend reduction due to large capital expenditure or development projects. These can be common in the industry and can drain funds that could be otherwise used for dividend payments. Overall, the above companies represent my top UK dividend stocks to look to buy at the moment with my £1,000. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Stock market crash: 3 shares I’d buy as markets plunge Why holiday costs are set to go up this summer The Amigo share price just fell 35%. Here’s what I’d do now 2 FTSE 250 shares to buy now Best shares to buy now: 2 stocks for a booming UK economy jonathansmith1 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. The post I’d invest £1,000 in these top UK dividend stocks for passive income today appeared first on The Motley Fool UK.
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  39. 3 top high-yield British stocks (12/06/2021 - The Motley Fool UK)
    I’ve recently been scouring the market for British stocks with high dividend yields to add to my portfolio. And I’ve come across three companies that meet my rigorous criteria for income shares.  British stocks The first corporation is the defence group BAE Systems (LSE: BA). What I like about this business is that it’s a relatively defensive enterprise. It’s the biggest defence contractor for the UK government, which gives it a large, stable customer. At the same time, BAE owns a broad portfolio of intellectual property, which gives it a competitive advantage against other defence contractors around the world.  I think these defensive qualities suggest the business will be able to produce a high level of profit year after year. This should support its dividend. At the time of writing, the stock supports a dividend yield of 4.6% and trades at a price-to-earnings (P/E) multiple of 11. Based on these metrics, I’d buy the equity for my portfolio today.  As a defence contractor, there’s a multitude of risks facing BAE. These include the potential for actions against the company if it has supplied weapons to sanctioned organisations. It may also suffer in a trade war between the UK and other nations.  High-yield investment  Another company I’d buy for my portfolio of British income stocks is asset management group Ninety One (LSE: N91). At the time of writing, this stock supports a dividend yield of 5.7%.  The company’s benefited from rising stock markets. According to its latest trading update, last year, the group registered an increase in assets under management of 27% to £131bn. Thanks to this growth, pre-tax profit increased 3% to £204.1m and adjusted operating profit increased 9% to £206.2m. I think this profit growth should support the company’s dividend yield. Moreover, if the economic recovery continues to drive stock markets higher, Ninety One’s assets under management, and profits, may continue to grow. Based on this outlook, I’d buy the stock today.  On the other side of the equation, if stock markets suddenly lurch lower, Ninety One’s assets under management could decline. This may lead to reduced profitability and, in the worst-case scenario, a dividend cut.  Income champion The final high-yield company I would buy for my portfolio of British stocks is the FTSE 100 income champion National Grid (LSE: NG). National Grid owns and operates the electricity infrastructure across England which, in my opinion, is a massive defensive advantage. Replicating this network would be nearly impossible. Therefore, the company has a virtual monopoly.  Unfortunately, it can’t charge whatever it wants for consumers and suppliers to use this network. It’s heavily regulated. This means National Grid’s profitability is limited. And if regulators decide to take a hard line with the business, the dividend could come under pressure.  Still, compared to many other British stocks, the company has an incredibly stable income stream which shouldn’t disappear anytime soon. At present, the stock offers a forecast dividend yield of 5.5%, which is significantly above the market average. It also trades at a forward P/E of 15.6, which is a bit on the pricey side. Nonetheless, it’s a price I’m willing to pay for a company with such an established monopoly. The post 3 top high-yield British stocks appeared first on The Motley Fool UK. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 3 of the best cheap stocks to buy in June 3 top FTSE dividend shares to buy now 2 FTSE 100 shares I’d buy this June 3 FTSE 100 shares I’d buy today with £3,000 Best shares to buy for income? I’d pick these FTSE 100 stocks 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.
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  40. 10-YEAR TREASURY YIELD VERSUS S&P 500 DIVIDEND YIELD (07/03/2021 - Reddit Stock Market)
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  41. S&P 500 dividend yield vs 10-Year government bond yield (05/03/2021 - Reddit Stock Market)
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  42. My best shares to buy now list: 1 FTSE 100 dividend stock I like right now (12/02/2021 - The Motley Fool UK)
    My best shares to buy now list is split into different categories. One of these categories is for dividend stocks I believe can make me a passive income. With that in mind, I’ll tell you why I like FTSE 100 energy supplier SSE (LSE:SSE) right now. Defensive capabilities SSE is the third-largest supplier of electricity and gas in the UK. It supplies electricity and gas under the Southern Electric, Scottish Hydro Electric, SWALEC, and Atlantic brands. It currently services over 7m customers. There are a few utility companies on my best shares to buy now list. Utility companies possess excellent defensive capabilities, as they are essential bills. The recent economic downturn may have forced consumers to cut back on luxuries. Bills such as mortgages, council tax, and utilities are essential, however. In general, utilities businesses tend to be favourable income investments as utilities are in a generally stable industry. SSE can rely on long-term contracts with customers, usually a minimum of a year in most cases. This provides a healthy regular income stream. Why is it on my best shares to buy now list? SSE is classed as a blue-chip stock and I believe it carries less risk than a smaller business. Every investment has some level of risk, however, organisations as big as SSE have more mechanisms in place to prevent issues from arising. If problems do crop up, big companies are often better equipped to handle them more effectively. SSE has long been considered one of the UK’s best blue-chip stocks. The FTSE 100 offers an average dividend yield of close to 3%. At the time of writing, SSE currently supports a dividend yield of just over 5%, which is very tempting. At current levels, SSE’s share price is nearly 15% lower than at this time last year, trading at 1428p per share as I write. It currently trades at 16.1 times earnings. I wouldn’t class that as cheap, but it’s not expensive either. Apart from its size and operational reach, I really like SSE as it is diversifying its operations towards renewable energy. Renewable energy presents a big challenge for traditional energy firms as they commit to net carbon zero. SSE is developing the world’s largest offshore wind farm. In addition to this, it is involved in many other projects as part of joint ventures across Europe. Risk and reward Many firms across the FTSE 100 had to cut dividends when the market crashed due to the global pandemic.The risk with SSE is that it could cut its dividend, which it did recently to meet capital spending requirements. Furthermore, a high dividend yield might indicate a business in distress. The yield could be high because the company’s shares have fallen in response to financial troubles, and the struggling company hasn’t cut its dividend yet.  Management has reaffirmed its commitment to the dividend for at least the next year. In the near term, it looks sustainable. As with all of my best shares to buy now list, I look at the long term rather than short-term buy and sell strategies. SSE is firmly in the long term section of my list. Here is another FTSE 100 dividend stock I really like right now. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Why I’d buy these 3 FTSE 100 dividend stocks today A FTSE 100 UK renewable stock with promise. Are SSE shares a strategic investment? I reckon these 2 FTSE 100 dividend stocks may be among the best shares to buy now UK renewable energy stocks: 3 shares I’d buy today Jabran Khan 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. The post My best shares to buy now list: 1 FTSE 100 dividend stock I like right now appeared first on The Motley Fool UK.
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  43. Here are 3 dividend stocks to buy for a passive income (30/05/2021 - The Motley Fool UK)
    I think owning stocks and shares is one of the most straightforward ways of generating a passive income. As such, I’m always on the lookout for dividend stocks to add to my portfolio. Here are three such companies I would buy to generate a passive income. Income stocks The first company on my list is water supplier United Utilities (LSE: UU). This firm has become an income champion thanks to its steady revenue stream. As consumers will always need access to fresh water, I think the business will always generate a steady stream of profits, a percentage of which can be returned to investors.  At the time of writing, the stock supports a dividend yield of 4.3%. It also has a long track record of increasing its dividend in line with inflation. That’s why I would buy the company for my portfolio of passive income investments. However, the company also faces some risks, which could impact its dividend credentials. These include the threat of regulation and higher costs. If Ofwat decides to reduce the amount of profit United Utilities is allowed to earn, the group’s profits could fall. This may force management to reduce the dividend.  Passive income Another company on my list of income stocks to buy is cigarette producer British American Tobacco (LSE: BATS). At the time of writing, this stock offers a dividend yield of 7.7%. This market-beating yield reflects the risks facing the business. For example, smoking is a well-known cause of cancer, and governments worldwide are always trying to think of new ways to reduce consumption. It may only be a matter of time before outright bans are introduced in some of the company’s largest markets. This could have a devastating impact on its profitability. Management would almost certainly cut the dividend in this scenario.  However, we’ve known about the risks of smoking for decades. So far, this has had a limited impact on tobacco consumption. Indeed, a recent report suggests cigarette consumption is at an all-time high.  Therefore, I would buy the company for my portfolio of income stocks, although I’m aware not all investors may be comfortable owning a tobacco producer.  FTSE 100 income champion The final company I would buy for my portfolio is Legal & General (LSE: LGEN).  I think this passive income champion has similar qualities to United Utilities. The financial giant manages pension and life insurance policies for millions of people. As such, it has to operate conservatively and not take excessive risks. These products also generate a steady stream of revenues and profits for the group.  I think this stream of profits can support the group’s 6.1% dividend yield. That’s why I would buy the stock today.  That sais, a critical risk facing the business is the possibility of another financial crisis. In the last financial crisis, the company had to slash its dividend as it took heavy losses. Unfortunately, there’s no guarantee the same won’t happen again.  The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Why this FTSE 100 stock is my contrarian pick 3 FTSE 100 stocks with 6%+ yields 2 FTSE 100 shares for income 3 FTSE 100 dividend stocks to buy Two 7%+ income shares I’d buy Rupert Hargreaves owns shares in British American Tobacco. 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. The post Here are 3 dividend stocks to buy for a passive income appeared first on The Motley Fool UK.
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  44. 2 top dividend stocks with 6% yields (03/06/2021 - The Motley Fool UK)
    Dividend investing is a powerful strategy that can help my wealth accumulate over time. There are two important factors when it comes to building long-term wealth. One is the longer duration I can give to allow my investments to grow, the better. The other is topping up the pot. Dividend reinvesting is one way to top up the pot with little effort. Get started now When it comes to time, the here and now matters. Getting started right away is always preferable to putting it off. It doesn’t matter if I can only afford to invest a small amount each month, what counts is that I start. The power of compounding means that gradual-but-steady investments build up over time. The key lies in getting started. Putting it off until later achieves nothing. It’s been proven time and again that the younger investors are when they start in the stock market, the more likely they’ll bank considerable sums in the future. The younger the better Interest rates also matter. The higher the interest earned on an investment, or via the dividend yield, then the faster I can accumulate wealth. For instance, if I invest a lump sum of £2,000 and regularly top up £250 a month from age 19, earning interest at 5% a year, I can accumulate over £536k by the time I’m 65. If I start at age 26, then I can only expect to achieve £363k by retirement. Meanwhile, if the interest rate is 9%, then by investing from age 19 to 65 I can expect to achieve £1.8 million, and from age 26 just over £1 million. I think this captures the power of compound interest and the importance of getting started from as young an age as possible, even though I also know I might not achieve those returns. Two dividend stocks So with all that in mind, here are two dividend stocks with yields over 6% that I’d consider buying today. FTSE 100 stock Legal & General is a major insurance and pensions provider with several revenue streams. It’s a well-established and recognised brand. As a dividend stock, I find it attractive because I think it’s not overpriced and offers a generous yield. The Legal & General price-to-earnings ratio (P/E) is 10, earnings per share (EPS) are 27p and its dividend yield is 6%. Dividend cover is only 1.5 times earnings, so that makes it more at risk if the company runs into trouble, but I’ll take my chances for now. Top global mining company Rio Tinto has seen its share price soar in the past year. It’s prone to volatility, but its 6% dividend yield helps calm the ride. The FTSE 100 stock has a P/E of 14 and EPS are 426p. I think Rio Tinto should be monitored more closely than other dividend stocks due to the cyclical nature of mining. But for now, commodities are in rising demand and for that reason I’d buy shares in this miner for my Stocks and Shares ISA. I’ve started later in life, but I think the power of compounding can still help me generate a decent nest egg. That’s why I like dividend stocks to set me up for a financially healthy future. For regular stock market investing ideas and help choosing the best shares to buy now, sign up to The Motley Fool today. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 3 dividend stocks I’d buy in June 2 top British dividend income stocks I’d buy today Here are 3 dividend stocks to buy for a passive income FTSE 100 shares I’d buy for large and growing dividends 2 FTSE 100 shares for income Kirsteen 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. The post 2 top dividend stocks with 6% yields appeared first on The Motley Fool UK.
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  45. 3 FTSE 100 dividend stocks to buy (22/05/2021 - The Motley Fool UK)
    I think owning income shares is a straightforward way to increase my income. So, with that in mind, I’ve been looking for FTSE 100 dividend stocks to add to my portfolio. Here are three blue-chip companies I’d buy for income today.  FTSE 100 dividend stocks The first company on my list is precious metal miner Polymetal International (LSE: POLY). Precious metals have been rising in value recently, which could translate into higher profits for this business. Indeed, net profit at the group more than doubled last year after a significant increase in gold and silver prices. Off the back of this growth, management hiked the company’s dividend by more than 100%. At current levels, the stock offers a dividend yield of 5.4%. I wouldn’t rule out a further dividend increase as precious metals prices increase. Unfortunately, commodity prices can fall as fast as they rise. This means the company may have to cut its dividend if prices fall significantly. That’s always going to be a risk of investing in mining businesses.  Still, it would be one of the FTSE 100 dividend stocks I’d buy based on its income potential. Defensive industry Utility companies can be the perfect income stocks. I reckon United Utilities (LSE: UU) fits the bill perfectly. At the time of writing, shares in the water company support a dividend yield of 4.4%. I think that looks attractive in the current interest rate environment.  The provision of water and wastewater services is an incredibly defensive industry. Consumers will always need access to this precious commodity. This suggests United will be able to earn steady profits for years to come. The company should also be able to increase profits and its dividends in line with inflation as prices rise. However, the one major challenge the firm faces is regulation. Ofwat essentially controls how much profit water companies are allowed to earn on their assets. If the regulator decides to clamp down and reduce profitability, United may have to cut its payout.  Even after taking this significant risk into account, I’d still buy the company for my portfolio, based on its potential. Housing market The UK housing market is currently firing on all cylinders. This bodes well for homebuilders like Persimmon (LSE: PSN). This business is currently struggling to meet the demand for new properties, which is an excellent position to be in considering the overall economic environment.  City analysts believe the business will earn a net income of £778m in 2021, up from £638m in 2020. This could support a dividend of 236p per share, the highest level of income in five years. That would give a dividend yield of 7.6% on the current share price. This level of income is far from guaranteed, but I think it showcases the company’s potential. Key risks and challenges to growth include a sudden increase in interest rates, which may hit demand for new-build properties. Rising labour costs could also hurt profit margins.  Considering the overall outlook for the UK housing market, I’d buy this company for my portfolio of FTSE 100 dividend stocks.  The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 3 UK income shares I’d buy 7% dividend yield! Top UK shares I’d buy in May This FTSE 100 stock is back with a bang. Here’s what I’d do now The Persimmon share price is up nearly 50% in a year. Should I buy more? 3 FTSE 100 stocks I’d buy for passive income 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. The post 3 FTSE 100 dividend stocks to buy appeared first on The Motley Fool UK.
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  46. Buying the Lloyds Bank share? Here are 3 metrics I’d consider first (30/03/2021 - The Motley Fool UK)
    The Lloyds Bank (LSE: LLOY) share price has had a good run in the last six months. Vaccine development and the stock market rally, being allowed to pay dividends again, and an improved economic outlook have given momentum to the stock.  So should I buy it now? I’d consider the following three metrics first before making the call: #1. Share price change In the past half-year, the Lloyds Bank share price has risen more than 60%. This is strong growth, but the question I would ask here is – how does it compare to its peers’ performance?  Of the other FTSE 100 banking entities – Barclays, HSBC, Standard Chartered and NatWest – I compared it to the first two. Standard Chartered has not seen any appreciable share price increase in the past year and Natwest is loss-making right now, so they were not similarly comparable. The Lloyds Bank share price has indeed risen faster than HSBC, which has grown 42%. But it is still far lower than Barclays’ 90% share price growth.  #2. Dividend yield What the Lloyds Bank share lacks for in terms of price increase, however, it can make up for in dividend yield.  Here too, the Lloyds Bank share sits somewhere in the middle. It has a dividend yield of 1.5%, compared to Barclays’ smaller yield of 0.5% and HSBC’s higher yield of 2.5%.  Considering both share price increase and dividend yield in mind, the Lloyds Bank share is not unattractive. But I would bear two more points in mind here: There are FTSE 100 growth stocks with higher dividend yields around (like, Rio Tinto). I would look at these too, rather than restrict myself to banks. Banks’ dividends are capped for now by guardrails set out by the Bank of England. This is a temporary measure, but it does mean that banks’ yields are likely to be less competitive than other stocks for the time being.  #3. Earnings per share To assess if it can pay a higher dividend, I look at the earnings per share (EPS) number as well. A higher EPS indicates that the bank can continue to pay dividends and possibly even increase them.  The Lloyds Bank share is in a weak place on this measure. Its EPS, at 1.2p, is way lower than that for both Barclays and HSBC at 8.6p and 19p respectively. While I would keep this in mind, given that 2020 was a bad year I would take it with a pinch of salt for now. The verdict for the Lloyds Bank share On the whole, based on these three metrics, the Lloyds Bank share does have merit. Right now, it is a growing stock that pays a dividend. Its dividend yield, however is low and going by its current EPS numbers, it does not look likely that this FTSE 100 stock will become a huge income generator anytime soon. At the same time, I think things can improve for the Lloyds Bank share as the economy reopens and rebounds, and banks’ business takes off. It is on my investing radar.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds share price is up 76% in six months. Am I too late to buy? UK shares to buy now: 3 I think can double my money in 3 years The Lloyds share price still looks cheap to me! I’d buy it today in an ISA The Lloyds share price is rising: should I buy now? Why I’d ignore the Lloyds share price and buy this cheap UK share right now Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, HSBC Holdings, Lloyds Banking Group, and Standard Chartered. 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. The post Buying the Lloyds Bank share? Here are 3 metrics I’d consider first appeared first on The Motley Fool UK.
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  47. 3 UK dividend stocks yielding 6%+ to buy now (12/06/2021 - The Motley Fool UK)
    Last week, I wrote about a FTSE 100 dividend share with an 8% yield that I’d buy now. In this piece, I want to look at three more high-yielding UK dividend stocks. All three companies are expected to deliver a cash return of at least 6% this year. They’re all stocks I’d be happy to buy as long-term holdings for my income portfolio. A 6.5% income from gold? Shares in FTSE 100 gold miner Polymetal International (LSE: POLY) have risen by nearly 15% since I last covered the stock in March. My view hasn’t changed though. I continue to hold the stock and see this Russia-based group as a good way to benefit from the strong market for gold. Polymetal benefits from all-inclusive mining costs of less than $1,000 per gold ounce. With gold trading at nearly $1,900 per ounce, as I write, it’s easy to see why the company’s generating plenty of cash at the moment. Management is targeting modest production growth over the next 18 months, but the main attraction for me is the stock’s forecast yield of 6.5%. In my view, this looks comfortably affordable at the moment. The main risk is that a gold price slump could cause future payouts to fall. However, I’m comfortable with this risk, given Polymetal’s low costs and good scale. This dividend stock is still a buy for me. An unloved 8.6% yield Tobacco group Imperial Brands (LSE: IMB) is one of the cheapest stocks in the FTSE 100. The company’s shares trade on just 6.5 times 2021 forecast earnings and offer a dividend yield of 8.6%. The risks are obvious enough. Tobacco is dangerous and highly regulated. Smoking rates in European markets — where Imperial sells most — are falling. I think there’s a risk that, at some point, selling cigarettes could become unviable in some countries. However, I don’t expect this to happen for many years, if at all. Right now, Imperial’s performance is improving under its new chief executive. The company’s high-profit margins and strong cash generation are supporting an attractive dividend. As a shareholder, I think the Imperial’s valuation already reflects the likely risks facing the business. I’d be happy to buy more at current levels. A below-the-radar dividend stock My final choice is a FTSE 100 share, but it isn’t a household name. Phoenix Group (LSE: PHNX) is a life insurer that buys ‘closed books’ of insurance policies from other insurers and then runs them to maturity. Phoenix is now the biggest player in this market in the UK. I’ve followed this business for several years and it’s been a reliable performer. In my experience, management forecasts are generally accurate and cash generation is strong, funding a 6.5% dividend yield. The business came through last year’s market crash without much difficulty. The main risk I can see is that Phoenix might struggle to keep growing. To address this, the company has recently gained the right to use the Standard Life brand. This will help increase the company’s sales of new insurance policies. Insurance businesses have quite complex financials, but I’m comfortable with Phoenix’s track record. This is a dividend stock I’d be happy to buy and forget for a few years. The post 3 UK dividend stocks yielding 6%+ to buy now appeared first on The Motley Fool UK. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 2 FTSE 100 dividend shares I’d buy and aim to hold for 10 years 2 top British dividend income stocks I’d buy today Top British stocks for June Does Imperial Brands share price weakness offer me a top dividend buy? 2 high-dividend-yield stocks to buy now Roland Head owns shares of Imperial Brands and Polymetal International. The Motley Fool UK has recommended Imperial Brands. 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.
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  48. 2 high-dividend-yield stocks to buy now (25/05/2021 - The Motley Fool UK)
    In the low-interest-rate world we’re experiencing, I want to try and make my investments work harder. One way I can do this is by targeting high-dividend-yield stocks. In this way, I can achieve an income payout that’s higher than I could get with my money sitting in cash. Obviously this carries a higher risk and I need to be aware of this. Being happy with the risk/reward balance, here are two stocks I’d take a look at. A cash cow Phoenix Group (LSE:PHNX) is a large UK-based insurance group. It services 14m customers and is well established in its market. One of the appealing features of this industry in general is the high level of cash generated. Paying this out enables Phoenix to be classified as a high-dividend-yield stock. At present, the yield sits at 6.47%. Reading through the 2020 report, it’s clear that the dividend policy is a key focus for the company. It shows how the dividend per share has grown in almost all of the past 10 years. Back in 2010, it stood at 32.2p a share. Now it’s at 47.5p.  As long as the business is functioning well, I’m confident Phoenix will remain a high-dividend-yield stock. The outlook does seem robust, with the business growing operating profit in 2020 to almost £1.2bn versus £810m in 2019.  One risk is that I don’t know how much of the company growth is organic. The company has grown in part through multiple acquisitions, most recently ReAssure during 2020. Taking on this book automatically generates revenue from existing clients. The risk to me going forward is that without further purchases, growth could stall. Another high-dividend-yield stock Next up is M&G (LSE:MNG). I wrote about the company back in February from an income perspective when the yield was almost 10%. It’s reduced now, as the share price has risen from around 190p to 237p. The higher share price has reduced the dividend yield to 7.67%. Even with this, it’s still a high-dividend-yield stock. It operates as a savings and investment firm, again an area that offers good levels of liquidity. After all, M&G collects fees and commissions from the assets held under management (AUM). As long as performance is good, assets should increase and fees will follow. I think the outlook for the company looks strong. AUM grew in 2020 to £367.2bn, up from £351.5bn the year before. However I do need to note that this rise is largely due to an acquisition during the year. Savings and asset management posted a net outflow of £6.6bn. I think this was largely due to the market crash, and was a blip. Given the fact that we haven’t had another market crash since March 2020, I’d imagine inflows should tick higher throughout this year. This sensitivity to the broader stock market can be seen as both an opportunity and a risk. Another risk I need to note is the fact that M&G is a relatively new independent company, being spun off from Prudential in 2019. Therefore it’s hard to put a fair value on what the stock is worth after only a limited trading history alone. Overall, both high-dividend-yield stocks offer me the ability to hopefully pick up some good income. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 3 FTSE 100 stocks with 6%+ yields These UK shares have doubled and still yield over 7% The best shares to buy now: 3 FTSE 100 bargains 7% dividend yield! Top UK shares I’d buy in May jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. The Motley Fool UK has recommended Prudential.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. The post 2 high-dividend-yield stocks to buy now appeared first on The Motley Fool UK.
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  49. FTSE 100 investment ideas: 4 ways I’m trying to make my cash work harder (26/02/2021 - The Motley Fool UK)
    The Bank of England base rate is currently 0.1%. When I factor-in inflation (around 0.7%), cash in my bank account is losing me value. Obviously, I need cash for various reasons. It’s great to have a rainy day fund, and cash on hand for other liabilities I wasn’t expecting. But for excess cash that I don’t really need, I personally think I should be looking at FTSE 100 investment ideas. The aim is to try and make my cash work harder for me, outperforming interest rates for my cash. Ideas for income and protection My first FTSE 100 investment idea is to target dividend shares. What kind of yield should I be expecting? Some FTSE 100 stocks have cut dividends due to the impact of the pandemic. Others have maintained the payout level, and due to a falling share price, offer a generous yield. These yields can be seen at 6% or higher. The FTSE 100 average is just above 3%.  The risk of this investment idea is that no dividend yield is guaranteed. It’s a constantly changing yield depending on the share price movement and the dividend per share. If companies struggle in 2021 and beyond, dividends may be cut again. This would decrease my income received and could be lower than I was expecting to make. A second investment idea I like at the moment is buying FTSE 100 defensive stocks. I recently wrote a piece looking at utility companies and supermarkets. From digging deeper into the financial results from 2020, it’s clear that these sectors have continued to perform well despite the pandemic. This gives me confidence to buy into these stocks now with my excess cash. Even if we see a prolonged recession in the UK, these stocks could help me to beat the FTSE 100 average performance. On the downside, defensive stocks will underperform the market if the UK economy really shines in the second half of this year. From that angle, I’d be better off buying high-growth stocks instead that perform better on positive sentiment. However, I’d try to counter any risk by splitting up my cash and investing in a mix of defensive and high-growth stocks Staying invested with a diversified portfolio This mix of FTSE 100 stocks is my third investment idea. I don’t specifically know which stock is going to be the top performer. So I’ll shake it up and own several to diversify myself. For example, I can bucket defensive stocks in one part, high-growth stocks in another, dividend stars in yet another. This mix should not only ‘blend’ my performance, but also reduce my risk to one company. Finally, my last idea is to reduce my ‘tactical trading’ once I’ve bought my FTSE 100 stocks. With cash rates low, I don’t really want to be selling out and holding cash as I wait for a new opportunity. Buying and selling frequently can actually reduce my returns. A great statistic I saw was that if I’d missed the 10 best trading days over the past 30 years by sitting in cash, my return would be reduced by 2% a year.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Stock investing: why I’d drip-feed £300 a month into an ISA Why I’m still buying FTSE 100 shares in this stock market rally Why I’d buy these 2 FTSE 100 stocks after their big events I will continue to invest regularly in dividend stocks inside a Stocks and Shares ISA in 2021 3 FTSE 100 stocks I’d buy for the dividends jonathansmith1 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. The post FTSE 100 investment ideas: 4 ways I’m trying to make my cash work harder appeared first on The Motley Fool UK.
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  50. FTSE 100 income stocks: how I’m aiming to make £10k a year from dividends (15/04/2021 - The Motley Fool UK)
    The FTSE 100 currently offers an average dividend yield of 3.03%. So in general, FTSE 100 income stocks can offer me a better place to generate money than other alternatives (such as a Cash ISA). Of course, not all FTSE 100 stocks currently pay out a dividend. Also, depending on the alternative, I might be able to generate a higher yield by taking on more risk. For me, I like the risk/reward ratio of getting income from stocks, and am aiming to get to £10k a year from this investment strategy. Getting income from FTSE 100 stocks Before I get to the £10k specifically, I think it’s important to to look at the metrics behind getting income from FTSE 100 stocks. I want to ensure that the dividends I receive are spaced out. Getting a lump sum of £10k once a year is handy, but for my cash flows needs I’d much prefer to receive payments on a quarterly (or even monthly) basis. I can achieve this by holding a portfolio of FTSE 100 income stocks, instead of just one or two. In this way, companies will pay dividends at different points during the year. By owning enough companies, I can ensure that my payment stream is regular, which fits in with my aim a lot better. Another metric that’s important to me is to ensure I don’t have to buy and sell FTSE 100 income stocks regularly due to dividend cuts. This would not only increase my transaction fees, but also create more work for me. I’d have to find another stock to replace the one that has cut the dividend. What can I do to prevent this? Well there isn’t a perfect solution, as some issues pop up unexpectedly. One point I do like doing is checking the dividend cover of a company. This shows me how much its earnings cover the dividend. It’s a simple ratio but a powerful one. For example, if I see the dividend cover is below one (that is, its earnings don’t cover its dividend), then I’ll probably stay away from it, even if the yield is very attractive! How can I make £10k a year? Let’s now turn to the numbers to get to £10k a year from FTSE 100 income stocks. I need to assume a dividend yield for this. I’m going to use one example with the average yield of circa 3%, and another one with a higher yield of 6%. This higher yield can be obtained by being selective in the stocks I choose to buy. If I wanted to get this passive income starting right away, I’d need to invest either £333k (3%) or £166k (6%). Both are sizeable lump sums to put to work, so I need another option. By putting away £1,000 a month and reinvesting the dividends I initially receive, it would take me pretty much bang on 20 years to reach my target. This is with the 3%-yielding stocks. With 6%, the timeframe needed would decrease by a decade! This shows the power of a higher yield over time. Of course, I could also lose my money and there’s no denying that stocks carry greater risk alongside their rewards. 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Would I buy today? jonathansmith1 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. The post FTSE 100 income stocks: how I’m aiming to make £10k a year from dividends appeared first on The Motley Fool UK.
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