They say the first sign of madness is doing the same thing and expecting a different result, so here goes, the SNOWBALL has bought 1113 shares in RGL.
The basis being that you are buying property for 50p in the £.
Yield 11%
Discount to NAV 56%.
I have bought for the SNOWBALL 1313 shares in TMPL for 5k.
Combined with the purchase of MRCH the blended yield is 4%, which equates to a loss of income for the Snowball of around £400. MRCH/TMPL would have to go up by 40% and then the profit crystallized and re-invested at 10% to equal the loss of income.
Whilst the loss of income will not alter the fcast of £10,500 it will make the target more difficult to achieve.
Thinking of stuffing a SIPP with high-yield shares? 3 things to consider
A SIPP filled with shares offering juicy dividends can seem tempting. Christopher Ruane explains some potential pros and cons of the approach.
Posted by Christopher Ruane
Published 31 March
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
Some investors take a very clear approach when it comes to investing their Self-Invested Personal Pension (SIPP). They focus on high-yield dividend shares and try to build substantial income streams, compounding the dividends along the way.
This approach can have both pros and cons. Here is a trio of things to think about when deciding whether it might make sense for your own SIPP.
Growth and income can both help you build wealth
Seeing dividends pile up can feel good, partly because they are not subject to tax while inside the SIPP wrapper.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
By contrast, putting money into a growth share and holding it potentially for decades without receiving a single dividend may seem less exciting. But growth shares can help build wealth, if they end up being sold at a higher price.
Dividend shares and growth shares typically offer different routes to trying to increase a SIPP’s value. In fact, it is possible for both to do so.
High yield can a red flag, but isn’t always
As a general rule, I think it makes sense to invest by finding good companies and then assessing whether their share price is attractive. In practice, a juicy dividend can sometimes distract investors who aim to do that.
They start by finding a high-yield share. They look at whether the payout is covered by earnings. Then, they try to convince themselves that the risks (such as the dividend being cancelled) are manageable.
Sometimes, though, a high yield can be a red flag that the City has doubts about whether a firm will be able to maintain its dividend.
Such dividends are sometimes cut or even cancelled. Others stay the same or grow – and investors can earn chunky passive income streams.
So I think it is important as an investor to be honest about the risks of a given share, not just the potential rewards.
Staying diversified always matters
Often, high-yield shares cluster together in certain stock market sectors.
Right now, for example, three of the FTSE 100’s five highest-yielding shares are financial services firms. The other two are property companies.
The FTSE 250 shows a different bias but the same pattern. All five of its highest-yielding shares are linked to renewable energy.
It is always important to manage investment risk by diversifying. With high-yield shares clustering in certain sectors, that can take a concerted effort.
By nature, a SIPP is a long-term investment vehicle. Its lifetime will likely involve periods when cyclical shares are at different points in the economic cycle. That could mean depressed share prices, dividend cuts, or both.
I did not own any renewable energy shares in my portfolio recently, so I took the chance to add Greencoat UK Wind (LSE: UKW).
The company owns stakes in a number of wind energy projects. That has helped it grow its dividends annually in recent years. The current dividend yield is 10.7%.
The share also sells for a substantial discount to its net asset value, suggesting it could be a bargain.
Still, as the past year’s share price performance and high yield suggest, some investors are nervous about the prospects for energy funds, including this one. Changing attitudes on energy policy combined with current energy price volatility could hurt profitability.
I reckon those fears are more than factored into the current share price, though, so I happily bought the share for its passive income potential.
UKW
Yield 10.8%. Next xd date early May
Discount to NAV 28%
2 “Defensive” Dividends Growing Fast (Thanks to AI)
Brett Owens, Chief Investment Strategist
Updated: March 31, 2026
Fear is up, markets are down—and we contrarians know that times like these are when we go shopping.
Yes, stocks are wobbling. And yes, those hoped-for rate cuts have dried up. Even one may be a stretch this year. But as worrisome as the situation in the Middle East is, as investors, we need to look beyond it.
Truth is, in the long run, AI will cap wage growth (it already is). That will take a bite out of inflation, and rates, while boosting profits—and our dividends along with them.
Fading Short-Term Fears
At times like this, we come back to our “Dividend Magnet” plays: Stocks growing payouts fast—and pulling up their share prices as they do. In the last few weeks, Middle East tensions have knocked many of these stocks behind their dividend-growth pace. That’s our cue.
Below are two examples. Both have pulled back, even though neither has anything to do with the Middle East. Plus, both are “stealth” AI plays that aren’t getting their due.
WM: More Trash, More (Dividend) Cash
Waste Management (WM) does two things we love:
- Raises its dividend and …
- Grows its free cash flow (and its share price along with it!).
Geopolitics doesn’t touch this business: It just goes on quietly collecting trash.
Not just that: It actually controls the entire waste, er, management cycle: as of year-end 2025, WM owned 257 landfills, 482 transfer stations, 162 recycling depots and 17 medical-waste incinerators. All that trash has been rocket fuel for WM’s dividend:
A Trash-Powered Dividend Magnet
Impressive as those numbers are, they’re first-level stuff—known by anyone who takes a glance at the company. Our second-level analysis kicks in with the dividend. With a yield of just 1.5%, most folks dismiss WM.
Here’s what they’re missing: As you can see above, this payout isn’t just growing, it’s accelerating. The latest hike, declared March 2, was 14.5%. This is WM’s 23rd straight year of increases.
That fast growth clip grows an investor’s yield on cost in a hurry. Anyone who bought just 10 years ago, for example, would be yielding around 6.6% on that buy now.
Cash Pile Grows Faster Than Management Can Give It Away
Here’s something else few first-level investors realize: Even with its fast payout hikes, WM’s payout ratio (as a percentage of free cash flow) has been falling for years.
Dividend Surges—and Gets Safer
I expect that to continue, especially with CEO Jim Fish stating in the company’s latest earnings report that he sees FCF growing 30% this year.
That’s in part because WM is investing in AI—and it’s paying off. Management has earmarked $1.4 billion between 2022 and 2026 for automation, including robots that—thanks to machine learning and top-flight imaging tech—can identify and pluck up to 1,000 items an hour from the waste stream. That’s more than 10 times “human speed.”
WM is never “cheap” (its P/E ratio is 34), and it’s gained 3% this year, as of this writing, beating the market. But since Middle East hostilities broke out, the stock has dropped 6%. That’s a solid deal on this top-notch dividend grower.
GILD: Another “Stealth” AI Play
Gilead is just as insulated from the Middle East as WM, and its AI connection is stronger.
That’s because AI is poised to shave a lot of time off of drug development—as much as six years, according to some studies.
That’s a lot more time for companies to profit off a drug before generics move in. Companies can also use AI to game out new treatments in computer simulations, letting any potential failures happen there, not in the middle of a pricey FDA trial.
How do we play this shift? We look for drugmakers with strong pipelines. This sector is also a great place to bargain-hunt because it was hammered last year, first by worries about RFK, Jr. at HHS and then by tariff fears.
My take? AI gains are going to way more than offset these worries.
Which brings me to Gilead Sciences (GILD), which we last discussed a month or so ago. It was a good deal then, and it looks better now. That’s because, like Waste Management, GILD has gained this year, while pulling back since the start of hostilities, to the tune of around 7% as of this writing.
Middle East Situation Tees Up Another Shot at GILD
That’s overdone: Gilead focuses on oncology and HIV treatments that generate predictable revenue, and its pipeline is loaded: 25 treatments in Phase 1 trials, 13 in Phase 2 and 15 in Phase 3.
GILD isn’t afraid to put its cash on the line, either: Last year, it spent $5.7 billion, or almost 20% of revenue, on R&D. With AI, it’ll be able to further “de-risk” that spend, while giving itself more treatments to test (and potentially push through to market).
No doubt Gilead’s efforts will be quarterbacked from the new 180,000-square foot AI-enabled research center it started building at its California HQ late last year.
Which brings me to the dividend: Like Waste Management, Gilead shares look uninspiring from a current-yield standpoint, at around 2.7%. But there’s something interesting happening under the hood here:
GILD’s Dividend Magnet Gets a Shot in the Arm
As you can see above, after lagging the payout for the last three years, the stock has nearly caught up. Moreover, its latest dividend hike was bigger than usual: $0.03 instead of $0.02.
An extra penny? Sounds small, but it is a 50% hike. There’s reason to believe more are on the way (beyond the AI bump). For one, in the latest quarter, free cash flow jumped 10%, to $3.1 billion, easily covering the $1 billion in dividends (and $230 million in buybacks) the company kicked out.
Finally, GILD trades at a reasonable 15.7-times forward earnings, even with its latest jump. That shows the market still hasn’t caught on to the AI-driven potential here.
For any new readers, where have you been ?
There are only 3 rules.
Rule 1
Rule 2
Rule 3
I’ve bought for the SNOWBALL 5k of MRCH 864 shares. Until the current oil crisis is resolved it’s likely the price will continue to fall and the yield will rise, enabling me to buy more shares with any earned dividends. If the market bounces when the ceasefire is announced there may be a short term gain to be made.
In the future when you look at the chart, for Dividend Hero Trusts, the current time will just be another blip.
I was buying more SEIT at 40p last week at a £432m market cap, I’ve been deep diving it further too. Even taking a foray into the chattersphere. Where I find the OB is the topic of conversation.
“The OB is losing it” says one “he’s a ramper” declares another – ah the poisonous crowd in the chattersphere – “He makes broad brush estimates” and “doesn’t really understand the accounting in SEIT…. his analysis is superficial”.
I rarely visit the chattersphere but when I do I’m reminded of why I don’t.
Interesting to see that SEIT’s portfolio gross value has grown over time. There is no collapse to the valuation, compared with the share price. The assets are actually very resilient.
SEIT
The reduction in the RCF with an interest cost of 6.4% saves over £9m interest per year.
How? £133m x 6.4% = £8.5m per annum vs the interest cost in 1H26 of £9m so £18m annualised. Are there some additional costs such as amortisation of arrangement costs in that £9m… perhaps, but £m’s per year? I doubt it.
We know that the “Big 5” are 66% of the Portfolio value in £m terms but delivered 75% of the EBITDA in 1H26 and 2H25 – and an even greater proportion in 1H25 (Oliva was a drag more recently) so losing about a quarter of the “Non Big 5” is an 6% reduction of EBITDA pro rata (25% of 25% is 6% right?), so about a -£4.5m reduction of EBITDA.
So even with costs and the discount taken into account the effect is up to ~£5m net positive for the Fund’s ongoing cash income (excluding one-off costs), implying up to 8% boost to net cash after interest costs from £43m to nearer £48m, even based on a static performance (which appears to be anything but static).
The positive news flow from Primary Energy (Nippon Steel is investing $3bn into US Steel) and Red Rochester (25% growth due to new customers) alongside Driva (Sweden) and Oliva (Spain) being beneficiaries to the current troubles for more expensive European energy there’s reasons to believe Cash Flows from the Big 5 will have grown in FY26 and will have a far brighter outlook for FY27.
Meanwhile project level debt has reduced too, even though 55% of it is amortising out of cashflow and project debt is at a weighted average cost of 5.7%.
This is my estimate of the impact of the portfolio assets sale on the NAV.
On a pence per share you’re paying 40p a share to own about 132p of real assets less the equivalent of -56p of debt so 40p gets you 86p of net assets.
132p of real assets generate 13p of cash (historically) of which -2.5p gets paid going forwards on interest leaving 10.5p cash earnings.
Your 44p per share of project debt is amortising at -1.5p a year, fees cost you -0.9p a year so after all of that 10.5p reduces to 8.1p and it is paying out 6.32p in dividends.
So SEIT is delivering a 15.8% yield to shareholders out of a total return of 20.3%.
If you look at the Fund’s income and expense the growing income from holdings is apparent too. The green line shows growing dividend income. It’s true that the blue bars are reductions through fair value losses – through rising discount rates (an eyewatering 9.7%) and falling power curves.
Power Curves in 2026 are definitely rising again since the Iran conflict erupted and 65% of income is index-linked. All of that is positive for the NAV – and the attractiveness of its assets.
If you consider the growing income from the portfolio (dividend income and loan interest income) below, and then contrast that with the fair value gains and losses you can see a clear disconnect between the trajectory of each. Why do assets with a lower fair value deliver growing income? Does that actually make sense?
Dividend income (from the portfolio) is pictured below in green and is growing each period. The blue fair value gains and losses reflect a growing discount rate
Regards
The Oak Bloke
Disclaimers:
This is not advice – you make your own investment decisions.
Micro cap and Nano cap holdings including REITs might have a higher risk and higher volatility than companies that are traditionally defined as “blue chip”.
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Thursday 2 April
BlackRock Energy & Resources Income Trust PLC ex-dividend date
Finsbury Growth & Income Trust PLC ex-dividend date
Gore Street Energy Storage Fund PLC ex-dividend date
Henderson High Income Trust PLC ex-dividend date
Invesco Asia Dragon Trust PLC ex-dividend date
Mobius Investment Trust PLC ex-dividend date
New Star Investment Trust PLC ex-dividend date
Personal Group Holdings PLC ex-dividend date
Pollen Street Group Ltd ex-dividend date
Real Estate Investors PLC ex-dividend date
RIT Capital Partners PLC ex-dividend date
Social Housing REIT PLC ex-dividend date
STS Global Income & Growth Trust PLC ex-dividend date
The simple number that makes an investment worthwhile
Questor: Never forget the bond market and the ‘risk-free rate’
Russ Mould
Published 30 March 2026
Questor, The Telegraph’s investing column, takes a weekly view of the markets – what is moving them, what lies ahead and how all of this could affect your portfolios and financial goals.
It has long since passed into lore that James Carville – once a senior adviser to Bill Clinton, the former US president – said that if there was such a thing as reincarnation, he would want to come back as the bond market so he could “intimidate everybody”.
At present, investors may be paying more immediate attention to the commodity markets – especially oil and gas – but they are doing so partly because of the possible knock-on effects that higher hydrocarbon prices could have upon inflation and, in turn, interest rates – all of which eventually hit the bond market.
From the end of the global financial crisis in 2009 to Covid-19 and Russia’s attack on Ukraine at the start of this decade, investors were able to take low inflation, low interest rates and low bond yields for granted.
The world is different now and, as a result, investors may need to think and approach markets in a different way if they are to protect and augment their wealth.
Gilt-edged option
The key benchmark to note is the 10-year gilt yield. This represents the “risk-free rate” for investors because, in principle, the British government will not default on its liabilities.
The last time the UK defaulted was the 1672 Stop of the Exchequer under King Charles II – although some financial market historians argue that 1932’s reduction of the 1917 War Loan coupon to 3.5pc from 5pc was tantamount to a default, even if the government portrayed the reduction as a voluntary one on behalf of patriotic investors.
In sum, the British Government will always make its interest payments (coupons) on time and return the initial investment (principal) once the bond matures, even if it must print money to do so. The investor will receive all the interest they are owed and their money back, assuming they buy the gilt upon issue and hold it until it matures.
At the time of writing, the 10-year gilt yield is 4.89pc. This is therefore the minimum, nominal, annual return on any investment that an investor should accept over their preferred investment time frame.
Risk measurement
The 10-year yield is approaching 5pc. That figure comfortably exceeds the 3.3pc forecast yield on the FTSE 100 for 2026.
The test now is whether investors settle for a higher risk-free rate and buy gilts, or stick with stocks, hoping for their near 7pc earnings yield, judging by the FTSE 100’s 14-times forward earnings multiple for this year.
At the same time, investors may also decide they want to pay lower valuations and prices for riskier assets such as equities because they do not need them quite so badly in their search for a return on their capital.
More things can go wrong with a shareholding than a bond, too – not least that the share price can go down, management can cut the dividend or the earnings forecasts can be wrong (or all three).
Ratings game
If gilt yields rise, investors are likely to demand higher returns from equities to compensate for the risk.
This can mean paying a lower valuation, or multiple of earnings and cashflow, but they can also demand a higher dividend yield. This can be achieved by increasing payouts or simply by buying at a lower share price.
Remember: the total return from a share is determined by capital return plus dividend yield. The capital return will be, in crude terms, a function of both earnings growth and the multiple or rating paid to access that earnings growth.
In its simplest form, the price-to-earnings (p/e) ratio is a helpful tool here.
Earnings will go up (or down) depending on the economic cycle and the fortunes of the company’s target industry, as well as the management’s strategy and business acumen.
Many factors can influence the price, or multiple, the investor wishes to pay – including the company’s finances, managerial competence and governance, as well as the predictability and reliability of its operations and financial performance.
Interest rates will have a big say in the multiple, too.
If gilt yields are rising, investors may feel less inclined to take risks and decide to pay lower prices and multiples, forcing a lower p/e in effect.
This maths helps to explain the FTSE 100’s pull-back from late February’s record high. Equally, the opposite can hold true, as evidenced between 2009 and 2021 when share indices rose as interest rates hit – and stayed at – rock bottom.
However you invest, never forget the bond market.
RULE 1 for Traders.
Stubbornly holding on to small losses.
Most investors could get out cheaply but because they are human their emotions take over. You don’t want to take a loss, so you hope, until your loss gets so large it costs you dearly. The rule is to cut all losses when a stock falls 7-8%.
For a dividend re-investment plan, re-invest your dividends at those higher yields than you could have got a month ago.