This FTSE hidden gem now has a stunning 7.4% yield!

Even with the FTSE reaching record highs in 2025, there are still plenty of massive under-the-radar dividend yields to take advantage of.

Posted by

Zaven Boyrazian, MSc

Published 14 June

SUPR

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.Read More

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The FTSE’s filled with hundreds of dividend-paying enterprises. And even in 2025, with the FTSE 100 hitting new all-time highs, there remain plenty of high-yield opportunities for income investors to capitalise on. Supermarket Income REIT‘s (LSE:SUPR) a prime example of this, with a shareholder payout sitting at a whopping 7.4% this month. And as a cherry on top, the stock’s also trading at a near-10% discount to its net asset value.

The retailer’s landlord

As the firm’s name suggests, Supermarket Income REIT owns and leases a portfolio of 82 properties used by Britain’s and France’s biggest supermarkets. Its list of tenants includes Tesco, Sainsbury’s, Waitrose, Morrisons, Asda, Marks & Spencer, Aldi, and Carrefour. But it’s Tesco and Sainsbury’s that make up the bulk of the group’s rental income, at 43.5% and 30% respectively.

Investing in this sort of property has proven to be quite a lucrative niche. Large retailers tend to stick around for a long time. As such, the weighted average lease duration is around 12 years, providing ample long-term visibility into Supermarket Income REIT’s cash flow.

This business model makes management life easier in terms of capital allocation. But it also makes the dividend more reliable and predictable. So it’s hardly a surprise that shareholder payouts have increased every year since they were introduced in 2018 – even during the pandemic. And if the consensus forecasts from analysts prove accurate, this upward trajectory for payouts is on track to continue.

Needless to say, this sounds like a promising place to park some capital. Even more so, given the analyst team at Goldman Sachs has placed a 92p share price target on the stock, opening the door to some welcome capital gains. So what’s the catch?

Every investment carries risk

While Goldman Sachs is among the more optimistic institutional followers, even it’s identified some key risks worth careful consideration. I’ve already touched on the fact that over 70% of rental income originates from just two customers. This dependency isn’t likely to have gone unnoticed by the financial teams and Tesco and Sainsbury’s, granting them a fair bit of leverage when it comes to negotiating lease renewals.

On the macroeconomic front, there’s interest rate risk to consider as well. Like many REITs, Supermarket Income has relied heavily on cheap financing over the years. But now that interest rates have shot up, the cost of having a leverage balance sheet has also jumped, putting pressure on margins.

Having said that, the company doesn’t appear to be over-leveraged right now and considering the high yield paired with a robust business model, this FTSE stock could be a lucrative opportunity for income investors, making it worthy of closer inspection, in my opinion.

You decided to buy at 300p and the plan was to hold thru thick and thin, there will always be plenty of thin and simply re-invest the dividends back into the Trust.

If you had invested 5k you share would be worth 35k, remember to allow for inflation.

If you bought at 300p the dividend was 11p a yield of around 4%.

The current dividend is 29.10p a buying yield of nearly 10%.

Is a £250,000 pension pot enough to retire on?

What would your retirement income be with a £250K pension pot? Knowing how much you can get makes it easier to plan for your golden years.

(Image credit: Getty Images/Maskot)

By Marc Shoffman

The high cost of living means it remains crucial to have a large pension pot to prepare for retirement and ensure you have enough to fund your golden years.

UK inflation may no longer be in the double digits but it remains high amid rising energy bills and geopolitical tensions as well as Donald Trump’s trade tariffs.

There is also uncertainty about the future of the state pension and the triple lock, meaning it is unclear if you will have these payments to fall back on when you are ready to retire. It is therefore important to prepare yourself financially.

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It is hard to predict what your pension pot will be worth in the future after decades of saving for retirement, especially with volatility in recent years, but knowing how much income you can generate can help you plan and set a target for your golden years.

“One of the big questions when considering retirement planning is how much you are likely to need,” says James Corcoran, chartered financial planner at Lumin Wealth. “None of us have a crystal ball and there are some big unknown factors, such as how long you are going to live, whether you may need long-term care, and what type of support you may wish to provide to family members.

“However, with financial planning, what we will typically do is look at various scenarios to see whether people are on the right track for the retirement they want, and then see how we can help them achieve that. Cashflow forecasting can be a very helpful tool here.”

Can you retire on £250,000 ?

Let’s use the Snowball for an assumption, although you should never assume, as it can make an ASS out of U and ME.

We will use the 100k of seed capital, if you can add fuel to the fire you should be able to shorten the time lines.

AN ANNUITY

Lets start with the 250k and you intend to take out an annuity. Current rates for a 3% uplift around 5.5k.

OR

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22

Remember you have to surrender all your capital.

THE 4% RULE

Current value of the control share VWRP £129,476.

To get to 250k we will have to assume a time line.

Compounding at 7%, it could be more or a lot less, let’s say ten years.

A ‘pension’ of 10k p.a.

A SNOWBALL

The current income for this year will be 10k and in ten years it could be

a pension of 20k p.a.

Even if the figure for the Snowball was less than a 4% pension, the fact that you have a plan with a defined end and you can check your progress and pencil in next years income, it could be better than a 4% pension plan.

Ideas of the Week

Bag a 14% yield with this trust

Investors Chronicle

Investors are being paid to wait for a recovery in sentiment towards this energy efficiency trust

Published on June 12, 2025

by Val Cipriani

Investment Risk: High

Investment Style: Income

Investment Timescale: Long term

With every single renewable energy infrastructure trust trading well below its net asset value (NAV), pinpointing the best opportunities is tough. The entire sector looks cheap, but it is also facing significant headwinds, and catalysts for a quick recovery are in short supply. However, some of these trusts stand out for their juicy yields and especially disproportionate discounts – and SDCL Efficiency Income (SEIT) is an obvious example.

SDCL Efficiency Income bull points

• Outsized discount to NAV 

• Attractive yield
• Diverse portfolio of energy efficiency assets
• Potential for corporate action

More than 130 years later, this pragmatic trust still offers something new

Law Debenture boasts a unique structure with two valuable sources of outperformance.

12 June 2025

Questor is The Telegraph’s stockpicking column, helping you decode the markets and offering insights on where to invest for the past six decades.

The UK equity market has been a happy hunting ground for income-seeking investors, and it continues to offer a yield premium to other developed equity markets. However, more recent events, particularly across competing income-producing asset classes, have shifted the emphasis for equity income investors towards total returns, dividend growth and the benefits of a pragmatic approach to stock selection.

In the context of an evolving landscape of UK equity income strategies, few names stand out as consistently as Law Debenture. This venerable institution, with almost 136 years of history, combines an actively managed UK equity investment portfolio with the robust growth of its wholly-owned independent professional services (IPS) business, which is comprised of three divisions – pensions, corporate trust and corporate services. This combination creates a unique structure that supports the trust’s history of consistent outperformance.

The investment portfolio is managed by the experienced Janus Henderson duo of James Henderson and Laura Foll, and benefits from a contrarian and value-focused style. The investment approach followed by Henderson and Foll is unconstrained by the equity income mandate, can invest across the market cap spectrum and targets companies trading at reasonable valuations with conservative balance sheets and experienced management teams.

One of the standout features of Law Debenture is the IPS business, which accounts for around 19pc of its net asset value (Nav) and has funded approximately 30pc of its dividends over the past decade. IPS has delivered mid-to-high single-digit growth and around two thirds of IPS revenues are recurring.

Law Debenture has consistently delivered outperformance in the UK equity income sector. Over the five years to the end of April 2025, it reported a Nav total return of 108pc and a share price total return of 120pc, far beating the FTSE All Share Index’s 68pc. Over the past decade, the trust has outperformed the FTSE by 49 percentage points. This outperformance reflects its ability to navigate market volatility and deliver value to its shareholders through active portfolio management, supported by the steady growth and income generation of IPS.

In Law Debenture’s accounts, the IPS business has a valuation multiple of 10.5x by enterprise value over earnings before interest, tax, depreciation and amortisation (EV/Ebitda), which remained consistent year on year. The total valuation of the IPS business has increased by £116m (148pc) since the first valuation at end-December 2015. This valuation underscores the growth potential and stability of the trust’s business model.

The investment portfolio’s largest sector exposures as of April 2025 were financials (30pc) and industrials (23pc). Top holdings included names such as HSBC, Barclays, Shell, Rolls-Royce and Flutter Entertainment, but the portfolio is multi-cap and it is currently benefitting from mid and small-cap exposure in UK companies.

At the end of April 2025, Law Debenture’s net gearing was around 13.6pc. In the context of global uncertainty – whether policy-driven or macroeconomic – leading to heightened equity market volatility, the investment portfolio has benefited from access to a diverse list of companies and its valuation discipline. The investment portfolio’s average valuation (historic price-to-earnings ratio) of 11.6x compares favourably with the UK market of around 12.6x and the US market’s roughly 24x earnings.

Law Debenture has delivered an 8pc annual dividend growth over the past 10 years and has increased or maintained its dividend for 46 consecutive years. The board proposed a total dividend of 33.5p for FY24, up 4.7pc from 32p in 2023, resulting in a yield of approximately 3.5pc on the current share price. The diversified income stream provided by IPS to the trust provides a cushion against market volatility and supports its dividend distributions. This blended approach makes the vehicle an attractive option for income-focused investors.

The trust currently trades on a small premium to Nav, a positive reflection of the demand for the strategy and the returns generated for shareholders. Over the past five years, its share price has traded at an average premium of 0.4pc to Nav, supporting steady growth of the strategy over time. Law Debenture’s ongoing charges figure of 0.51pc is one of the lowest fees in its sector and one of the lowest fees across the entire investment trust universe.

In our view, Law Debenture’s unique structure supports its consistent outperformance. The ability to invest in an unconstrained manner and hold low or zero dividend yield shares, backed by the IPS business’s growth and income contribution, has made the company one of the best-performing trusts in the UK equity income sector.

With its strong record, diversified portfolio, robust IPS business and reliable dividend policy, Law Debenture presents a compelling case for investors seeking stability, income and growth potential. In addition, for those looking to diversify their investment portfolio and access the valuation opportunity in the UK equity market, the trust offers a compelling combination of actively managed stock picking, attractive yield and strong dividend growth.

Questor says: buy
Ticker: LWDB
Share price: £9.74

If Mr. Market ever offers you a yield of around 5% would be of interest to pair trade it with a higher yielder.

It’s general market consensus that a high dividend yield is something to be wary of but is the market always right ?

Re: Dividend Announcement

The Directors of TwentyFour Select Monthly Income Fund Limited (“SMIF“), the listed, closed-ended investment company that invests in a diversified portfolio of credit securities, have declared that a dividend of 0.5 pence per share will be paid, in line with the Prospectus, representing the regular monthly targeted dividend for the financial period ended 31 May 2025 as follows:
Ex-Dividend Date              19 June 2025
Record Date                       20 June 2025
Payment Date                    4 July 2025
Dividend per Share          0.50 pence (Sterling)

AEW

AEW fell during covid, one reason people were working from home and wouldn’t need a workplace.

You will note the yields had been rising, due to the higher interest rates, as the price falls the yield should rise, it accelerated during covid.

Now you would have been hesitant to press the buy button as you didn’t know if the price would continue to fall , it’s always easy with hindsight, if only you could bottle it. But if you liked the yield, you might have bought.

Currently you could have taken out your stake and still receive a yield of around eleven per cent on your remaining shares, which sits in your account at zero, zilch, nothing.

If you re-invested at say a yield of 9%, your running yield would be 20%

Remember all views of everyone in the market, including insiders, will appear in the chart first.