We have some exciting news to share! The Motley Fool UK has now become The Twelfth Magpie — an independent, UK-owned company, led by our long-serving UK management team — Mark Rogers, Chris Nials and Heather Adlington. In practical terms, it’s the same team you know, now fully focused on serving our UK readers and members.
Just as importantly, our approach remains unchanged: long-term, jargon-free, and on your side. This site is our new home, and there will be extra tweaks made across the coming few days as we settle in. So if anything looks a little off, please bear with us!
How to turn a £20k Stocks and Shares ISA into a second income over time
How to turn a £20k Stocks and Shares ISA into a second income over time
Andrew Mackie looks at how time and compounding can turn a stocks and shares ISA into a meaningful second income.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
A Stocks and Shares ISA is not a shortcut to instant passive income — it’s a long-term compounding vehicle.
That matters because many investors focus on what a £20,000 portfolio can generate today, when the real opportunity lies in how that figure can grow through disciplined investing over time.
Used properly, a Stocks and Shares ISA can become the foundation of a second income stream — but only if investors understand how compounding, dividends, and reinvestment work together.
Compounding effect
When building a Stocks and Shares ISA, it’s easy to focus on how much is invested. But the chart below shows something more important than contribution levels or return assumptions.
It compares two investors using the same 8% return over 20 years. One invests a £20,000 lump sum at the start. The other invests £1,000 a year for 20 years.
The outcome is driven by one factor: time.
Money invested earlier has longer to compound. That compounding builds on itself year after year, and the gap widens simply because one portfolio starts working sooner.
This is the core point the chart is designed to show. Not the exact contribution method. Not the precise return assumption. But the effect of time.
Everything else investors tend to focus on — timing, structure, even total contributions — becomes secondary to that simple reality.
The longer money is invested, the more powerful compounding becomes. That’s what drives the difference in outcomes.
Chart created by author
Quality compounder
One business that fits this idea of long-term consistency and compounding is RELX (LSE: REL).
At first glance, recent weakness in the share price reflects concerns that AI could disrupt its legal, scientific, and risk analytics businesses. On the surface, that sounds like a credible threat — particularly in areas like legal research, where large language models are improving rapidly.
However, the business is not built around static content or easily replaceable information. Its strength lies in proprietary datasets built up over decades — particularly in legal and risk markets where precedent, accuracy, and verification matter as much as raw information.
In law especially, AI tools may improve access to information, but they don’t remove the value of structured, validated, and continuously updated legal databases. If anything, the demand for trusted data becomes more important as AI-generated outputs increase in volume.
That’s why RELX has been integrating AI into its own platforms rather than resisting it. Across its divisions, it is using machine learning tools to improve workflow efficiency for lawyers, insurers, researchers, and risk professionals — all within its existing subscription ecosystem.
This creates a different type of investment profile. Growth is not driven by cycles or one-off wins, but by steady subscription renewals and incremental expansion over time.
What could go wrong
The main risk is not sudden disruption, but slower structural growth if AI meaningfully reduces demand for human-led professional services.
Even so, the attraction for me lies in consistency. RELX has demonstrated an ability to compound earnings through multiple cycles, without relying on aggressive assumptions.
The chart earlier illustrates how powerful time can be when compounding is allowed to work uninterrupted. To me, the same principle applies to investing itself. Quality businesses such as RELX are built around long-term consistency rather than short-term excitement — and that is often where lasting wealth creation begins.
I believe investing in UK shares is a great way of aiming to build long-term wealth. Moreover, I reckon The Twelfth Magpie is a fabulous place to start for those looking for ideas which stocks to consider buying.
With this in mind, I’ve been taking a closer look at the rhyme from which the website takes its name. What does it tell us?
One for sorrow
Savvy investors know that having a diversified portfolio is a means of spreading risk. Owning just one share could be a bad decision. Putting all of your investment eggs in one basket is a bad idea.
Two for joy
It’s a great feeling when a portfolio performs well.
Three for a girl, four for a boy
As well as having a diversified portfolio spread across various companies, sectors, and countries, it’s also important to ensure it’s balanced. What does this mean? Essentially, I believe a mix of growth and income stocks is ideal.
Five for silver, six for gold
Appropriately, some of the best performing UK shares over the past 12 months have been miners. Since May 2025, Fresnillo (LSE:FRES), the Mexican gold and silver producer, has seen its share price more than triple as investors have increasingly turned to precious metals as a ‘safe haven’.
However, the stock’s at the riskier end of the scale. Although metal prices have done well, this could quickly change. As a result, it’s impossible to accurately predict the group’s earnings from one period to the next. Also, mining’s operationally challenging.
But demand for gold’s rising, with many of the world’s central banks being the biggest buyers.
Silver’s used in more industrial applications than gold but the market’s been in supply-demand deficit for some time. Solar energy and AI data centres could help push prices higher.
On balance, I think it’s a stock to consider.
We anticipate that at least one of our advanced prospects will join our development portfolio in the coming two to three years. With demand for silver and gold forecasted to exceed supply, driven by the green energy transition and the safe-haven status of gold, Fresnillo is well-positioned to capitalise on the opportunities ahead.
Alejandro Baillères, Chairman, Fresnillo
Seven for a secret never to be told
Sniffing out those hidden bargains is one way of achieving investment success.
Eight for a wish
But it’s essential not to get carried away. It’s important to invest based on a company’s fundamentals rather than sentiment or to follow the crowd.
Nine for a kiss
UK shares have a great reputation for paying generous dividends. For example, there are currently 53 on the FTSE 350 that are paying more than 6%. Of course, dividends are never guaranteed.
10 a surprise you should be careful not to miss
Every now and again, the stock market will throw up something unexpected. The key is to be ready to act quickly.
11 for health
There are plenty of UK shares with strong balance sheets. Understandably, lots of attention is paid to earnings but these are underpinned by a company’s financial health as reflected by its assets and liabilities.
12 for wealth
Ultimately, building wealth is what it’s all about. Personally, I think UK shares are a great way of achieving this.
True North Commercial REIT (TSX:TNT.UN) is one of the resilient office property owners with high portfolio occupancy rates. It’s monthly income distributions yield 8.4% annually, and they are well-covered by cash flow at just 38% of AFFO.
Units trade at a 68.6% discount to their most recent $26.10 NAV.
Canadian passive-income seekers looking to find a high-yielding dividend stock that deposits cash into their brokerage accounts every single month may wish to check out True North Commercial Real Estate Investment Trust (TSX:TNT.UN), or True North REIT.
After suspending its distributions during a turbulent 2023 for office real estate, this pure-play Canadian office REIT made a major comeback by reinstating its monthly payouts in early 2025. Today, its well-covered payout sports a juicy 8.4% annual dividend yield. But is this high-yield REIT a safe bet for your portfolio in May 2026? Let’s take a closer look.
Source: Getty Images
True North REIT: The rebirth of a high-yield passive income stream
True North Commercial REIT’s reinstated monthly distribution promises a reliable, well-covered high-yield passive income payout that could help compound investors’ wealth.
The office REIT owns a portfolio of 37 office properties spanning 4.4 million square feet of gross leasable area (GLA) located across five provinces. While it has some notable concentration of 41.6% of its GLA in the Greater Toronto Area (GTA), the trust’s properties are reasonably diversified across Canada, and it has maintained resilient occupancy levels post-pandemic.
Although overall occupancy rates experienced a dip later in the past year, falling from 92% by March 2025 down to 90% by December, the REIT’s core portfolio boasted a stellar 95% occupancy rate as of March 31, 2025, excluding properties held for sale. To optimize its portfolio, True North has disposed of three properties since the first quarter of 2025, including an Ottawa property held for sale that was vacated in the fourth quarter of 2025.
Crucially, the Canadian national office market continues to trend positively, marking two straight years of positive net absorption and ending 2025 with 2.2 million square feet of net absorption nationally. True North is capitalizing on this leasing momentum, renewing and signing leases at average rates 5% above expiring rents during the first quarter, with tenants locking in a long average lease term of 6.9 years.
An unprecedented safety net
When a dividend stock yields over 7%, the first question investors should ask is whether the high-yield passive income payout is reasonably safe. For True North, the answer lies in its jaw-dropping distribution coverage, with its diluted Adjusted Funds From Operations (AFFO) payout rate sitting at an incredibly conservative 38% for the first quarter of 2026. AFFO measures the most recurring distributable cash flow for REITs, after considering property maintenance and leasing costs.
During the first quarter of 2026, the REIT paid out $2.5 million in distributions while generating $7.3 million in adjusted cash flow from operating activities. It had the capacity to pay more than double its current distribution, proving that the payout is exceptionally well covered by rental cash flows. Furthermore, the REIT’s underlying cash flow is backed by institutional-grade tenants: about 74% are either government tenants (36%) or credit-rated corporate tenants (38%), presenting an exceptionally low default risk.
A deeply undervalued real estate investment trading at 32 cents on the dollar
Perhaps the most compelling reason to consider True North REIT is its wildly high discount to net asset value (NAV). As of March 31, 2026, True North units had an NAV of $26.10, yet the same units exchanged hands at around $8.19 in the public stock market at writing.
Deeply undervalued TNT.UN units trade at a staggering 68.6% discount to their fair value, allowing new investors to buy quality real estate at 32 cents to the dollar. Management has also renewed a unit repurchase authorization that allows it to buy back up to 10% of its outstanding equity units at these heavily discounted prices to create long-term value.
Investor takeaway
True North REIT’s 8.4% high yield monthly payout is a compelling offering for passive income purposes. However, the deep discount on units implies above-average risks. The market is skeptical of the office market since the pandemic, and a recovery is not yet convincing as the Canadian economy shrugs off recessionary pressures.
That said, because regulation requires REITs to distribute most of their earnings to unit holders so they can remain income tax-exempt, the high yield distribution remains a core focus. With an 8.4% yield, an ultra-safe payout ratio, and a massive valuation discount, this monthly cash-payer is well worth a look for passive income seekers today.
A list of high-yielding dividend stocks to consider buying now.
By Matthew DiLallo – Updated May 3, 2026 at 1:48 PM EST | Fact-checked by Frank Bass
Key Points
High-yield dividend stocks typically offer a yield that’s at least double the S&P 500’s level.
Investors should focus on dividend sustainability and company quality over yield alone.
Key stocks like AbbVie and Duke Energy offer stable dividends due to strong financial health.
There’s no official definition of a high-yield dividend stock. However, most investors would classify it as a stock with a dividend yield above a common benchmark, such as the S&P 500 index or a 10-year U.S. Treasury note.
In early May 2026, the dividend yield on the S&P 500 averaged around 1.1%, approaching its record low. Meanwhile, the yield on the 10-year note was around 4.4%, down from its recent peak above 4.8% in early 2025 after the Federal Reserve started lowering interest rates.
Many investors would consider a stock to have a high dividend yield if it were twice the S&P 500 yield; others would require a payout at or above the 10-year Treasury yield. Those baseline measurements aside, investors shouldn’t buy a stock solely because of its dividend yield.
They need to make sure the dividend payments are sustainable. The company should be high-quality, with durable cash flow, a strong balance sheet, and visible growth potential. With all that in mind, here are 20 of the best high-yield dividend stocks to consider buying for dividend income.
Drugmaker AbbVie (ABBV+0.69%) has had an excellent dividend track record. From its inception in 2013 through early 2026, AbbVie has increased its payout by a whopping 330%, including a 5.5% increase in October.
AbbVie has invested heavily in developing new therapies and made several blockbuster acquisitions, including closing its $2.1 billion deal for Capstan Therapeutics in mid-2025. It’s also investing $1.4 billion to build a new manufacturing campus to support the production of immunology, neuroscience, and oncology medicines. These investments put AbbVie in an excellent position to keep dividend income flowing and growing.
As one of the largest apartment owners in the country, Mid-America Apartment Communities (MAA+0.87%) benefits from collecting steady rental income to support its high-yielding payout. The real estate investment trust (REIT) also boasts a top-tier financial profile, which allows it to expand its apartment portfolio by developing and acquiring new communities.
Since its 1994 initial public offering (IPO), Mid-America has never suspended or reduced its dividend. As of early 2026, it had raised its payment for 16 consecutive years, growing it at an 8.3% compound annual rate over the last five years. With demand for apartments continuing to grow, the REIT should be able to keep increasing its dividend in the coming years. The landlord had over $600 million of apartment communities under construction to support its continued growth.
Brookfield Infrastructure (BIP-0.28%) operates a diversified portfolio of infrastructure businesses focused on utilities, transportation, energy (midstream), and data. The businesses generate relatively stable cash flow to support Brookfield’s growing dividend. The infrastructure stock delivered its 17th consecutive annual payout increase in 2026, up 6% from the prior level.
Brookfield envisions increasing its dividend at an annual rate of 5% to 9% over the long term. The company’s growth drivers of inflation-linked rate increases, volume growth as the global economy expands, expansion projects, and acquisitions should grow its funds from operations (FFO) per share by more than 10% annually over the next few years.
Brookfield Renewable (BEP+0.48%) is a sibling company of Brookfield Infrastructure. Brookfield Corporation (BN-0.15%) controls both companies.
This Brookfield entity focuses on renewable energy, including hydroelectric, wind, solar, and energy storage facilities. The assets generate steady cash flow backed by long-term power purchase agreements with utilities and other users, supporting Brookfield’s high-yield dividend.
Brookfield Renewable delivered its 15th straight year of raising its payment by at least 5% in 2026. The company expects to increase its payout at an annual pace of 5% to 9% over the long term. Like its sibling, Brookfield Renewable expects a combination of organic growth drivers and acquisitions to power more than 10% annual FFO per share growth through at least 2031.
Duke Energy (DUK+0.81%) is a leading utility. The company’s electric utilities serve 8.7 million customers across six states, while its natural gas utilities serve 1.6 million customers across five states. Its businesses generate very stable cash flows backed by government-regulated rate structures, enabling Duke to pay dividends since 1926.
Duke has a large-scale investment program underway ($103 billion of capital spending from 2026 through 2030) to expand its transmission and distribution network. These investments should grow its earnings per share by 5% to 7% annually through 2030. Earnings growth should enable the utility to continue increasing its dividends, which it has done each year since 2007.
Main Street Capital (MAIN-2.72%) is a business development company (BDC) focused on providing capital solutions (private debt and private equity) to lower middle market companies (those with annual revenues between $10 million and $150 million). It also provides debt capital to middle-market companies ($150 million+ in annual revenue).
The company’s debt investments generate interest income, while most of its equity investments provide it with dividend income. As a BDC, Main Street Capital must pay out 90% of its taxable net income to shareholders. It does so through a sustainable, steadily rising monthly dividend (136% growth since its 2007 IPO). Main Street Capital also periodically pays a supplemental quarterly dividend (18 consecutive quarters). The company has increased its base monthly dividend payment by 4% over the past year and 11 times since the end of 2021.
The big oil giant’s top financial priority is to sustain and grow its dividend. In 2026, the company delivered its 39th consecutive annual dividend increase, one of the longest streaks among oil stocks. Chevron (CVX+0.26%) has delivered peer-leading dividend growth over the past decade.
Its integrated operations, low-cost oil business, and lower-carbon energy investments position Chevron to sustain and grow its dividend. Chevron expects to grow its free cash flow at a more than 10% compound annual rate through 2030 at $70 oil. As a result, Chevron should have plenty of fuel to continue increasing its high-yielding dividend.
Canadian pipeline and utility giant Enbridge (ENB+0.43%) has been an outstanding dividend stock over the years. It has paid dividends for over 70 years and has increased its payout (in Canadian dollars) in each of the past 31 years.
While the world is transitioning its fuel supply from oil to cleaner alternatives, Enbridge is adapting by investing in infrastructure to support natural gas and renewable energy. The investments have the company on track to increase its cash flow per share by a 3% to 5% annual rate for the next several years, which should support continued dividend growth. Enbridge raised its dividend payment by 3% in December 2025.
Enterprise Products Partners (EPD+0.41%) ranks as one of the top players in the midstream oil and gas market. The master limited partnership (MLP) has increased its payout at least once annually for 27 consecutive years. Its latest raise in January 2026 was 2.8% above the level it paid in early 2025.
The company continues to invest heavily to expand its midstream operations. It had $5.3 billion of major capital projects under construction that it should complete by 2027. The MLP also has a history of making accretive acquisitions. These and future investments should give Enterprise the fuel to continue increasing its dividend.
Procter & Gamble (PG+0.72%) is a leading consumer products company. Procter & Gamble owns top brands that include Bounty, Charmin, and Gillette. Demand for these essential household consumer products is very resilient and steadily rising.
The company has paid dividends for 136 straight years and delivered its 70th consecutive annual dividend increase in April 2026. Procter & Gamble’s strong portfolio of brands positions it to continue growing its high-yielding dividend in the coming years.
Leading healthcare REITHealthpeak Properties (DOC+0.46%) owns a diversified portfolio of healthcare real estate, including medical office buildings, lab space, and retirement communities. These properties generate healthy rental income, giving the REIT great income now and more later.
Healthpeak Properties switched to paying monthly dividends in 2025. It also resumed dividend growth. Healthpeak is upgrading its portfolio by selling some of its outpatient medical properties to fund development projects and lab acquisitions. It created a new REIT (Janus Living) to unlock the value of its senior housing properties. These enhancements should enable the REIT to continue growing its high-yielding dividend.
Regions Financial (RF+0.43%) is one of the country’s largest banks, focusing on the South and Midwest. It has a long history of paying dividends. While the company reset its payment level during the 2008-09 financial crisis, it has increased the dividend 20-fold since that time.
It gave investors another raise in 2025 (a relatively minor one at 6%). With its banking and financial services businesses growing, Regions should be able to continue increasing its high-yielding payout in the future.
Extra Space Storage (EXR-0.42%) is a REIT focused on owning, operating, and managing self-storage facilities. Over the past decade, it has been one of the best-performing self-storage REITs.
A big driver is its rapidly rising dividend. Extra Space Storage has increased its payout by a peer-leading 10.3% annualized over the last 20 years, and more growth seems likely. The self-storage REIT has a strong balance sheet, giving it ample flexibility to continue making new investments as opportunities arise.
Will AI create the world’s first trillionaire?
One little-known company, called an “Indispensable Monopoly” owns the technology Nvidia, AMD, and Intel cannot function without. And it is still just a fraction of Nvidia’s size.
We just released a brand-new report with the full story and the company’s name. Continue ›
NNN REIT (NNN+0.04%) is a REIT focused on single-tenant retail properties secured by triple-net (NNN) leases. That lease structure provides it with very stable rental income, supporting its high-yielding dividend.
The company has one of the best dividend track records in the REIT sector. It extended its annual dividend growth streak to 36 straight years in 2025, the third-longest streak in the industry. Its strong financial profile should enable NNN REIT to continue expanding its portfolio and dividend payments.
Pfizer (PFE-0.12%) has paid dividends for 350 consecutive quarters, increasing them for 16 consecutive years. The pharmaceutical giant’s investments in research and development (R&D) are paying off. The company developed one of the first COVID-19 vaccines and followed up with a successful oral treatment.
The commercial successes have enabled Pfizer to continue making research and development investments and strategic acquisitions (it bought Metsera for up to $10 billion in cash in late 2025). These investments should boost Pfizer’s cash flow, enabling it to continue increasing its dividend payments.
VICI Properties (VICI+0.00%) is a REIT focused on owning experiential real estate, such as casinos and bowling entertainment centers. The company leases those properties back to operating companies under long-term NNN leases. The agreements supply it with steadily rising rental income from annual rate increases.
The company also steadily invests in new gaming and nongaming real estate. VICI Properties’ growing income has enabled it to increase its dividend in each of the eight years since its formation. It has grown its dividend at a peer-leading 6.6% compound annual rate since 2018, well ahead of the sector’s 2.3% average.
Realty Income (O-0.34%) lives up to its name. The REIT, which pays a monthly dividend, has made 670 consecutive payments. Even better, it has increased its payout more than 134 times since its IPO in 1994, expanding it at a 4.2% compound annual rate. That adds up to 31 consecutive years of steady dividend growth.
A steady diet of acquisitions has driven its growth. Realty Income purchases properties in sale-leaseback transactions, acquires larger property portfolios, and merges with other REITs to grow its portfolio, rental income, and dividend. It plans to invest $8 billion in new properties in 2026, which should increase cash flow per share and drive continued dividend growth.
Telecommunications giant Verizon (VZ+0.17%) has been a great income stock over the years. In late 2025, the company delivered its 19th consecutive annual dividend increase, the longest current streak in the U.S. telecom sector.
Verizon should be able to continue increasing its dividend as it invests to transition its mobile network to 5G, bringing faster data speeds to its customers. The company closed its $20 billion acquisition of Frontier Communications in early 2026, a deal that will increase the scale of its fiber operations and its earnings.
Mutual fund manager T. Rowe Price (TROW+1.41%) has a long history of paying dividends.
The company raised its payment by 2.4% in early 2026, marking its 40th straight year of dividend growth. That steady dividend growth should continue as the company grows its assets under management (AUM) and its clients entrust it with more of their money.
PepsiCo (PEP+1.16%) has an illustrious record of paying dividends. The global snacking and beverage giant extended its dividend growth streak to 54 in a row in 2026. That put it in the elite group of Dividend Kings, a company with 50 or more years of annual dividend increases.
The iconic company invests heavily in new product innovation, productivity enhancements, and other drivers to grow its revenue and profit margins. It also routinely acquires snack and drink brands that consumers love (it paid almost $1.7 billion for Poppi in 2025). PepsiCo’s continued investments should enable it to maintain its exceptional track record of dividend growth.
What to consider before investing in high-yield dividend stocks
Whether the company has the financial strength to sustain its high-yielding dividend if market conditions deteriorate.
If investing in a company with a lower yield but higher growth and total return potential may be better for your financial situation.
Signs that the stock might be a dividend yield trap.
If the company can increase its dividend in the future.
Pros and cons of investing in high-yield dividend stocks
Investing in high-yield dividend stocks has its share of benefits and drawbacks. Some of the pros include:
More income: Investing in high-yield dividend stocks enables you to generate more dividend income from every dollar you invest compared to lower-yielding stocks or those that don’t pay a dividend.
Lower volatility: High-yielding dividend stocks tend to be slower-growing companies and are often less volatile.
Higher long-term total return potential: Higher-yielding dividend stocks can often deliver higher total returns over the very long term as dividend income accumulates.
On the other hand, here are some cons of investing in higher-yielding dividend stocks:
Potentially higher risk profile: Some higher-yielding dividend stocks are at greater risk of dividend reductions due to high payout ratios or weaker financial profiles.
Slower growth: Most higher-yielding dividend stocks are slower-growing companies.
How to invest in high-yield dividend stocks
Here’s a step-by-step guide on how to invest in high-yield dividend stocks:
Open your brokerage app: Log in to your brokerage account where you handle your investments.
Search for the stock: Enter the ticker or company name into the search bar to bring up the stock’s trading page.
How to Build a High-Yield Dividend Portfolio
Buy at least 10 stocks
Diversify across several sectors
Invest in a mix of higher-yielding, slower growth stocks as well as those offering a lower yield but more dividend growth potential
Focus on dividend sustainability and growth over a stock’s current yield.
The bottom line
All 20 of these dividend stocks offer above-average yields, making them stand out in a time when many companies don’t pay high dividends. Even better, each one has a solid track record of steadily increasing its dividend and showing no signs of stopping. That makes them great income stocks to buy and hold for the long haul.
Lots of posters post they have top sliced a position but this is where it gets technical.
Because the profit is deducted from all the shares held in the SNOWBALL, the actual booked profit after charges is £14.18. Although it provides £300 to re-invest in the SNOWBALL
The profit for FGEN is £484.88 and the unrealised profit is £462.36
A profit is not profit until the whole position is sold and the cash sits in your account.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
Lloyds‘ (LSE: LLOY) shares have had a solid run. They’re up more than 22% in the last year, and 88.5% over five. I own the stock, so I’m happy.
In fact, I’m sitting on even bigger gains than that. How come?
The first reason’s luck. I invested £4,000 in 2023, just before the Lloyds’ share price really took off. With a price-to-earnings (P/E) ratio of 6.5, and forward yield of 5.5%, I thought the FTSE 100 bank looked unmissable value.
Timing stock purchases is hit and miss, but I got that one dead right. My Self-Invested Personal Pension (SIPP0 tells me my shares have climbed 120% since I bought them at an average price of 45.3p. Today, they trade at around 100p.
The second reason I’m ahead is down to dividends, which don’t show up in the performance figures. Originally, I bought 9,259 Lloyds shares. I’ve received six dividends so far, and reinvested every single one. Today, I’m the proud owner of 10,240 shares and my total return’s 156%. That original £4k is now worth £10,225. Not a bad return in less than three years.
Why are dividends so powerful?
UK blue-chips boast some of the highest yields in the world. Over the longer run, as much as half the total return from FTSE 100 shares comes from reinvested dividends. Well-run companies aim to increase shareholder payouts every year, turbo-charging the overall compounding effect. Lately, Lloyds has increased its dividend by 15% a year.
On Tuesday (19 May) I received my seventh dividend. That was the second and final payout for the 2025 financial year, worth 2.43p per share. I got just over £248… a passive income that requires me to do pretty much nothing.
Once my SIPP reinvests that I’ll bag another 245 shares, or so. And remember, these are still early days.
With retirement 10 years away, there’s plenty more time my Lloyds shares to compound and grow. I’ll draw those dividends as income when I stop working.
Should you consider this dividend hero today?
So is today a good time to buy Lloyds shares? With a forward P/E ratio of 14.3, they’re pricier than when I bought them. The forward yield for 2026 is lower at 4.3%. But that’s forecast to hit 5.1% in 2027.
Even a solid bank like this one has risks. Remember the financial crisis? Also, Lloyds is very much a UK-focused operation, and our economy’s struggling today. That could hit demand for mortgages and increase loan impairments, hitting profits. After a strong run, the shares could easily slow, or even fall.
I still think Lloyds is well worth considering today as part of a balanced portfolio of FTSE 100 stocks. Investors shouldn’t wait too long for the perfect moment to buy. Timing stock purchases is almost impossible. I got lucky here, but I’ve been unlucky too.
In my view, the sooner investors take advantage of the long-term compounding effect, the better.
Wall Street is busy chasing the loudest stories, while some high-quality income investments continue quietly rewarding shareholders.
We highlight two overlooked dividend payers with durable cash flows, resilient business models, and the ability to continue generating dependable income through market volatility.
We are building wealth, one dividend at a time. Check out our top picks with +6% yields.
Looking for more investing ideas like this one? Get them exclusively at High Dividend Opportunities.
niuniu/iStock via Getty Images
Co-authored with Hidden Opportunities
The best things are often the least obvious and sometimes less known or less advertised.
I recently visited Toronto and went to Añejo Restaurant in Downtown. The reason for the choice of restaurant was that my wife was craving Tres Leches, and this was the only place nearby that featured it on the menu, according to Google. Google also seemed to tell us that Añejo is a popular spot, known for its lively atmosphere, drink selection, and tacos. During my visit, I got the sense that this is the kind of place you’d visit if you were looking for a fun night out. We were there only for a specific dessert; we had already finished our dinner elsewhere.
Now, Añejo’s Tres Leches is different. On the physical menu, it said “lemon cake”, “dulce de leche,” and “candied lemon,” and I told my wife, “This may not be what she was craving,” but she agreed to give it a try.
We received a slightly unconventional take on the popular Latin American dessert, but it was much better than the original. It was not flashy or heavily promoted and certainly not the reason most people walk through the door (in fact, the waitress appeared a bit disappointed when we only ordered two of these desserts and did not go with anything on their popular drinks menu). Yet, it ended up being extremely delicious and easily became the most memorable part of our trip.
That’s often how it works. The things that deliver the best value aren’t always the ones that get the most attention. They sit quietly in the background, overlooked, underestimated, and underappreciated. Investing is no different.
While headlines chase the loudest names and the most talked-about opportunities, some of the best income-generating investments remain largely unnoticed, quietly doing their job, quarter after quarter.
Today, we’re going to look at two such opportunities.
Pick #1: KRC – Yield 6.3%
Readers often ask how large our portfolio is since we discuss some ideas every day. Portfolio management is an art; it requires careful analysis not only at the time of buying but also periodic updates based on business performance. This due diligence is reserved for members of High Dividend Opportunities, and as such, we don’t normally share our Buys and Sells.
Kilroy Realty Corporation (KRC) is one such company we have never publicly discussed but have covered several times within HDO since our purchase a couple of months ago. KRC is an internally managed REIT that develops, acquires, and manages office, life science, and mixed-use property types in Los Angeles, the San Francisco Bay Area, Seattle, and Austin. KRC is the 46th largest property REIT in the United States by market cap, with a portfolio of 123 buildings, leased to 438 tenants, and a portfolio occupancy of 77.6% as of March 31, 2026. In addition, KRC also has 608 residential units in San Diego, with an occupancy of 95% as of March 31, 2026. KRC stock is up ~15% since we began buying, and this equity REIT has a lot more to deliver as we look ahead.
During Q1, KRC reported record leasing activity, totaling 568K sq. ft. About 40K sq. ft. of the leases were on previously vacant properties, while 80K sq. ft. was new leasing on occupied spaces. Leases for 82K sq. ft. were renewed.
Asset Dispositions and Acquisitions
During the quarter, KRC sold $350 million in non-core properties, and management noted having used the proceeds from asset disposition towards debt repayments and share repurchases. In April, KRC repaid the $50 million of its 4.300% Private Placement Senior Notes Series A due July 2026, at par. During the quarter, the REIT purchased 2.4 million shares of common stock for $72.7 million.
In February 2026, KRC entered into a Joint Venture, by acquiring a 97% ownership interest in a land site in Downtown Redwood City, supporting a 251K sq. ft. office building. Construction will commence in 2027 and will cost $330 to $350 million, and the project is 58% pre-leased via a 20-year lease with a leading global law firm—Cooley LLP—for 145K sq. ft. Management expects delivery to be in 2030.
Operating Results & Enhanced Guidance
Q1 2026 revenues were relatively flat YoY at $270.1 million, while FFO (Funds From Operation) dropped to $108.8 million ($0.91/share). As originally guided, KRC’s net occupancy levels and FFO will be lower in 2026 due to KOP2 (Kilroy Oyster Point Phase 2) being added to its square footage, largely unoccupied but incurring costs. Excluding the new development at KOP2, the REIT’s occupancy was 81.5% with 84.3% leasing as of March 31, 2026. Management shared their upgraded guidance for 2026, expecting FFO between $3.49 and $3.63 (from the previous range of $3.25 to $3.45). This places KRC’s $2.16 annual dividend at a modest 60% payout ratio.
KRC continues to invest in high-quality assets, and as these developments move through the buildout phase, we are seeing a temporary YoY dip in operating metrics. This is part of the value creation process, not a sign of deterioration. Meanwhile, investors are paid to wait. The dividend remains well-covered and steady, allowing us to collect steady income while today’s capital investments position the company for future FFO growth.
Pick #2: WES – Yield 8.2%
In our February article on Western Midstream Partners, LP (WES), we noted that management was eyeing accretive acquisitions as part of its capital allocation in 2026.
WES’ capital allocation plans also indicate potential pursuit of accretive acquisitions in 2026, similar to the Aris transaction, for inorganic growth and asset expansion. – HDO, February 27, 2026
We didn’t have to wait too long to find out more. On May 6, WES announced the agreement to acquire Brazos Delaware II for $1.6 billion. Brazos Delaware is one of the largest privately held gathering and processing platforms in the Texas-Delaware Basin. It owns and operates ~900 miles of pipeline and 460 Mcf/d natural gas processing capacity. The transaction will involve $800 million in cash and $800 million in stock and is expected to close towards the end of Q2 2026. In 2025, WES generated ~62% of its Adj. EBITDA through its operations in the Delaware Basin. Source
Investor Presentation
This proportion is expected to rise after the Brazos transaction closes, supplemented by the completion of the Pathfinder Pipeline and North Loving II in 2027. We will note that Brazos comes with long-term contracts with a weighted-average life of over 9 years and with its top seven customers (leading energy names in the U.S. like ConocoPhillips, Exxon Mobil, Diamondback Energy, etc., accounting for ~80% of total volumes).
WES has been one of our strongest performers since we added it to the HDO model portfolio in December 2023. The partnership delivered three distribution raises and market-beating total returns through our ownership, and there is a lot more of it as we look ahead.
During Q1, WES generated a record Adj. EBITDA of $683.1 million, a 15% YoY increase, as a result of a full-quarter contribution from the Aris acquisition. Higher commodity prices towards the end of Q1 and a 7% reduction in operation and maintenance expenses provided further tailwinds. WES reported record crude oil (4% YoY) and NGL (6% YoY) throughput in the Delaware Basin, while produced water throughput reached 2,795 MBbls/d (a 140% YoY increase primarily driven by the full quarter contribution from the Aris acquisition).
From a balance sheet standpoint, WES paid down $440.5 million of senior notes due 2026 with proceeds from the senior notes issued in the fourth quarter of 2025 ($600 million of senior notes due 2031). The company ended Q1 with liquidity of over $2.6 billion and maintains an investment-grade BBB- balance sheet.
WES management has raised its 2026 guidance and expects Adj. EBITDA between $2.50 billion and $2.70 billion and Distributable Cash Flow between $1.85 billion and $2.05 billion, while affirming its CapEx between $850.0 million and $1.00 billion.
The most memorable experiences often come from the least expected places. Similarly, some of the best income opportunities are likely the ones quietly operating outside the spotlight.
Wall Street often focuses on what is exciting and trendy. Income investors, however, are paid to focus on what works, quietly. Our two picks discussed in this article, KRC and WES, will never dominate headlines, but both continue to quietly generate steady cash flow and reliable income. This is how we build wealth at High Dividend Opportunities, quietly, one dividend at a time.
