Investing in UK shares for dividends can be a rollercoaster ride, with payouts never guaranteed. Just like the Covid-19 crisis showed us, even the most stable companies can suspend dividends when faced with unforeseen disasters.
However, as investors, there are strategies we can implement to reduce the risk of dividend disappointment. Opting for defensive companies with consistent earnings, like utilities, healthcare providers, and food manufacturers, is a smart move. Additionally, choosing companies with a strong financial position, leading market positions, and diversified revenue streams can safeguard dividends during economic downturns.
Diversifying your investment portfolio is crucial to mitigate the impact of industry-specific factors on returns. Spreading your capital across various stocks can provide a buffer against fluctuations in individual companies’ performance.
Three Top Stocks for Dividends
To navigate the dividend landscape, here are three secure dividend shares worth considering:
- Assura (LSE:AGR) – Forward dividend yield: 8.2%
- Legal & General – Forward dividend yield: 9.5%
- Diageo – Forward dividend yield: 3.1%
While dividends are never guaranteed, based on current projections, an equal spread of £20,000 across these dividend shares could potentially yield a passive income of £1,380 this year.
Assura: A Top REIT
Delving into Assura, a FTSE 250 company, reveals a stable dividend history even in challenging times. Analysts expect this trend to continue despite high interest rate risks. The company’s defensive operations, primarily owning and leasing out healthcare properties, contribute to consistent dividend growth.
Despite an aggressive expansion strategy to drive future earnings, Assura adheres to REIT regulations requiring at least 90% of rental profits to be distributed as dividends. This commitment enhances the company’s reputation as a reliable income choice for investors.
FTSE 100 Dividend Stars
In conjunction with Legal & General and Diageo in a diversified portfolio, investors can enjoy enduring dividend streams. Legal & General, a financial services giant with a strong balance sheet, has a history of dividend growth, despite operating in a non-defensive sector.
Similarly, Diageo, a reputable player in the alcoholic beverages market, navigates competitive pressures with iconic brands like Guinness and Captain Morgan. The company’s global diversification across various drinks segments adds stability to its earnings and dividends.
By strategically investing in reliable dividend-paying stocks, investors can potentially secure a steady income stream for the long term.
Remember, the information provided here is for reference purposes only and should not be construed as financial advice. Tax implications may vary based on individual circumstances and are subject to change. Evaluate investments carefully and consult a financial advisor if needed.
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