I am looking to boost my passive income streams this year by finding dividend shares to buy. There are some high-yield shares I would buy for my portfolio today if I had spare cash to invest. Here are three of them.
Fund manager M&G (LSE: MNG) was a bit disappointing for shareholders, including myself, last year, slipping 8% in value over the past 12 months. More positively though, the company delivered on its objective of maintaining or raising the dividend. Currently the yield is a juicy 9.6%.
One reason the shares fell last year is investor nervousness about the asset management sector. A worsening economic environment could push down asset values, adding to investor withdrawals. That might hurt revenues and profits.
However, I think the shares offer good value for my portfolio. M&G is a well-established brand, demand for financial services is set to remain strong over the long term and the business has proved it can be consistently profitable, albeit earnings last year fell sharply compared to the prior 12 months. That concerns me, but with a long-term investing mindset I see the current M&G share price as a buying opportunity for my portfolio.
I would also buy Direct Line (LSE: DLG) for my portfolio if I had spare funds to invest.
The insurer is a household name. It also benefits from resilient demand as most people will insure their homes and motor vehicles no matter what happens to the wider economy. By sticking to mainstream insurance lines, the firm is able to avoid the outsized losses that can hit rivals who underwrite catastrophe insurance and the like.
The company yields 9.8%, meaning that if I put £1,000 into its shares today I would hopefully generate almost £100 in annual passive income. One risk I see is falling profits if the company loses customers, as happened in the first half. Hopefully, in the long term, Direct Line’s strong brand and deep commercial experience will enable it to remain highly profitable.
Income and Growth
Another of the high yield shares I would add to my portfolio if I had spare cash is the Income and Growth Venture Capital Trust (LSE: IGV).
Its yield of 10.4% is certainly attractive to me, although the dividend tends to move around based on the performance of the trust’s investments. It puts money into a variety of growing companies early in their development and tries to benefit from their success.
Such a strategy involves a risk that the trust loses money on some of its investments. Hopefully though, it may also get in early on some great opportunities, as it has done in the past. That can help the firm pay out dividends to shareholders.
While I am also hopeful of the opportunity for capital growth, in the past year the share price has actually fallen 16%. Income is the main attraction for me here and the falling share price has led to a higher yield.
The post 9%+ dividends! 3 high yield UK shares I’d buy today appeared first on The Motley Fool UK.
C Ruane has positions in M&g Plc. 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.
Motley Fool UK 2023