This dull-and-reliable investment offers stability amid stomach-churning volatility
This company’s stable share price and attractive cash returns make it favourite for top fund managers

Algy Hall

Questor is The Telegraph’s stock-picking column, helping you decode the markets and offering insights on where to invest.

We all crave fun and excitement. In the stock market, that means dull-and-reliable investments often get overlooked. But during periods of stomach-churning volatility, as we have experienced during 2025 so far, the virtues of the dull stuff suddenly become much clearer.

Dull-and-reliable investments tend to make themselves known through two key attributes. One is relatively stable share prices. The other is attractive cash returns; what could be duller after all than a business with nothing more exciting to do with its cash than to dutifully hand it back to its owners.

US employee benefits specialist Unum displays both these characteristics. This may help explain why top investors have been increasing their bets on its shares.

Nine of the world’s best fund managers, all among the top-performing 3pc of over 10,000 equity pros monitored by financial publisher Citywire, hold Unum’s shares. And increased smart money interest has this month seen the company propelled to be among the 74 constituents that make up Citywire’s Global Elite Companies Index, which represents the very best ideas from around 6,000 stocks held across the portfolios of the world’s best money managers.

Unum is an insurance company that specialises in selling a range of work-related financial protection and wellbeing services through employers and also directly to individuals. Its portfolio includes disability, life, accident, critical illness, cancer, dental and vision cover.

Offering such a broad range of policies makes it attractive as a one-stop-shop to clients, especially as employers increasingly look to compete for staff based on the overall benefits they offer as opposed to just salary.

Unum is more profitable than most of its peers. Its leadership in disability insurance is a particular advantage that underpins its competitive position. The complexities of disability insurance limits competition and differentiates Unum to customers. This is reflected a return on equity of over 20pc reported by Unum in 2024. Meanwhile, book value per share has grown at an annualised rate of 9pc over the last ten years.

The company generates large amounts of cash from its business, too, which it returns through share buybacks as well as dividends. Buybacks have more than halved Unum’s share count since 2007.

Buybacks are only a real benefit to shareholders if the shares bought offer the prospect of a good return. Fortunately, in the case of Unum this looks like the case based on its shares’ forecast free cash flow yield of over 10pc and a price equivalent to less than nine times forecast earnings for the year ahead.

Unum has said it will aim to buy back between $500m (£376m) to $1bn of shares this year and is forecast to pay out over $300m in dividends. Taking buybacks at the proposed mid-point, that’s equivalent to a hearty total shareholder yield (buybacks and dividends as proportion of market capitalisation) of 7.3pc.

British buyers of the shares, which are available through all the UK’s main brokerage platforms, need to fill out the correct paperwork to minimise withholding tax on dividends and should also check for any additional overseas dealing charges.

The company looks particularly well set up for cash returns given there is $2.2bn of liquidity at the holding company level, which is expected to rise to $2.5bn by the year end. That’s well above a target level of about $500m.

The strong financial position has been helped by a reinsurance deal covering a $3.4bn chunk of Unum’s closed book of long-term care insurance policies, equating to 20pc of the total.

Closed books are made up of policies that have previously been sold and are still being serviced but are no longer being marketed. The deal reduces risk as well as freeing about $100m of capital.

Business risks have also been reduced over the last several years by moving the investment portfolio into safer assets.

However, taking on risk is what the insurance game is all about, which means the possibility for upsets always exists. One such recent worry for investors has been an uptick in disability claims in Unum’s first quarter. Management believes this is nothing out of the ordinary, though, and consistent with long-term trends.

More generally, sales growth and premiums are both strong and the company believes digital investments will continue to help it attract new customers while nudging up the persistency of policies that have already been taken out.

There’s plenty to take comfort from. During times of uncertainty, that’s a valuable thing, especially when it is accompanied by large cash returns.

Questor says buy

Ticker: NYSE: UNM

Share price: $82.15

From landlord to investor: why buy-to-let owners may be switching to stocks for a second income
Story by Mark Hartley

Housing development near Dunstable, UK

UK landlords may be considering new ways to earn a second income as rising costs and tighter regulations diminish their returns. Instead, some are looking to the stock market as a potentially more lucrative investment, or so a recent report in The Times claimed

Legislative changes also add new layers of complexity and expense, including the abolition of ‘no-fault’ evictions and stricter energy efficiency requirements.

These challenges have hit the buy-to-let market hard, with data revealing only 10% of homes purchased this year were bought by landlords — the lowest since 2007. And nearly half of them may consider selling their properties, citing unmanageable costs and regulatory burdens.

Of course, this doesn’t entirely negate the value of buy-to-let. Falling interest rates or a change in legislation could bring back profitability. Furthermore, the intrinsic value of owning physical real estate is always a bonus.

Searching for new second income avenues

Those who have made the switch cite lower maintenance, greater liquidity and long-term growth potential as key advantages over property ownership.

Everything from gold and government bonds to dividend shares and investment trusts can be placed in an ISA. And property’s not off the table — real estate investment trusts (REITs) offer an inexpensive, maintenance-free way to gain exposure to the UK real estate market.

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.

UK property stocks

The UK’s home to several top-performing REITs, such as LondonMetric Property, Land Securities Group and British Land. These investment vehicles are popular for their high dividend yields, often exceeding 6%.

It has a smaller yield than most, at only 4.4%, but its growth and reliability make it an attractive option. Since 2014, dividends have increased every year without fail, at an annualised rate of 7.3%.

Sadly, its price action’s less impressive. It’s down 21% in the past five years — a common theme with REITs. Since Covid, the fund’s suffered under a high-interest-rate environment — an ongoing issue. It also faces additional risks from rising vacancy rates and falling rent prices, putting pressure on margins and threatening profits.

Fortunately, things look to be improving. Since 2022, the company’s net margin has increased from -33.7% to 88%, with it turning profitable last year. Earnings per share (EPS) is expected to reach 36p this year, up from 29p in 2022.

With a low price and strong dividends, I think the stock’s worth considering for both value and income investors alike — particularly those looking for exposure to the UK property market.

There is also a payment from VPC for £1,933.10, payable around the 12th June

Those that have been paying attention will know that the Snowball needs to invest in a new Trust to replace VPC as it winds down.

AIRE, can be deleted from the list because of the discount to NAV

SEQI and GCP deleted as they are loan arrangers and the Snowball already has similar positions.

PEYS as I know absolutely nothing about the Trust apart from it invests in Private companies.

On 12 May 2025, the Board of VPC Specialty Lending Investments plc (the “Company“) announced a second distribution to shareholders of £43 million through the issue and redemption of B Shares.

Pursuant to the authority received from shareholders at the General Meeting on 5 April 2024, B Shares of 1 penny each will be issued to all Shareholders on 22 May 2025 by way of a bonus issue at a ratio of 15.45226301 new B shares for each Ordinary Share held at the Record Date of 6:00 p.m. on 21 May 2025. The Redemption Date in respect of this initial return of capital is 29 May 2025. The B Shares will be redeemed at 1 penny per B Share. The Company will not allot any fractions of B Shares and entitlements will be rounded down to the nearest whole B Share. The proceeds from the redemption will be sent to uncertificated Shareholders through CREST or via cheque to certificated Shareholders on or around 12 June 2025.

Company Type Amount Currency Ex-Dividend Date Impact Payment Date

abrdn Asia Focus PLC Interim 1.6 GBX 22May 0.52% 23Jun25
Aquila European Renewables Interim 0.0079 EUR 22May 1.24%13 Jun25
BlackRock Greater Europe Investment Trust PLC Interim 1.75 GBX 22May 0.30% 18Jun25
Bluefield Solar Income Fund Ltd Interim 2.2 GBX 22May 2.41% 27Jun25
HICL Infrastructure PLC Final 2.07 GBX 22May 1.80% 30Jun25
JPMorgan Global Growth & Income Final 5.7 GBX 22May 1.03% 23Jun25
JPMorgan UK Small Cap Growth & Income Quarterly 3.76 GBX 22May 1.17% 01Jul25
NextEnergy Solar Fund Ltd Final 2.11 GBX 22May 3.10% 30Jun25
Regional REIT Ltd Quarterly 2.5 GBX 22May 2.08% 11Jul25
Scottish American Investment Co PLC Interim 3.625 GBX 22May 0.70% 19Jun25
Town Centre Securities PLC Interim 2.5 GBX 22May 1.84% 13Jun25
Tritax Big Box REIT PLC Interim 1.915 GBX 22May 1.32% 13Jun25
TwentyFour Select Monthly Income Fund Ltd Monthly 0.5 GBX 22May 0.59% 06Jun25
Weiss Korea Opportunity Fund Ltd Interim 4.0788 GBX 22May 2.84% 23Jun25

You can enjoy an entire year of Contrarian Income Report for just $39. That’s 60% off the published price!

How to Retire on 8%+ Dividends Paid Monthly Dear Reader, You’ve no doubt heard pundit after pundit say that you need at least a million dollars to retire well. Heck, we’ve all heard it so often, I bet it’s the first number most people think of when someone says “retirement savings”! Let me explain why this endlessly repeated fallacy is dead wrong. You’ll actually need a lot less than that. I’m talking about just $600,000. And in some parts of the country you could easily do it on less: a fully paid-for retirement for just $500,000. Got more? Great. I’ll show you how you can retire filthy rich on your current stake. I know that sounds ridiculous in these inflationary times, but stick with me for a few moments and I’ll walk you straight through it. The key is my “8% Monthly Payer Portfolio,” which lets you live on dividends alone—without selling a single stock to generate extra cash. And you’ll get paid the same big dividends every month of the year – so that your income and expenses will once again be lined up! This approach is a must if you want to quickly and safely grow your wealth and safeguard your nest egg through the next market correction, too! This isn’t just a dividend play, either: this proven strategy also positions you to benefit from 10%+ price upside potential, in addition to your monthly dividends. That’s the Power of Monthly Dividends We’ll talk more about that price upside shortly. First, let’s set up a smooth income stream that rolls in every month, not every quarter like the dividends you get from most blue-chip stocks. You probably know that it’s a pain to deal with payouts that roll in quarterly when our bills roll in monthly. But convenience is far from the only benefit you get with monthly dividends. They also give you your cash faster—so you can reinvest it faster if you don’t need income from your portfolio right away. More on that a little further on. First I want to show you … How Not to Build a Solid Monthly Income Stream When it comes to dividend investing, many “first-level” investors take themselves out of the game right off the hop. That’s because they head straight to the list of Dividend Aristocrats—the S&P 500 companies that have hiked their payouts for 25 years or more. That kind of dividend growth is impressive. But here’s the problem: these folks are forgetting that companies don’t need a high dividend yield to join this club—and without a high, safe payout, you can forget about generating a liveable income stream on any reasonably sized nest egg. Worse, you could be forced to sell stocks in retirement—maybe even into the kind of plunges we saw in March 2020 or throughout 2022—just to make ends meet. That’s a nightmare for any retiree, and leaning too hard on the so-called Aristocrats can easily make it a reality: the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which holds all 69 Aristocrats, still yields just 2% as I write this. Solid Monthly Payers Are Rare Birds … You can certainly build your own monthly income portfolio, and the advantage of doing so is obvious: you can target companies that pay more than your average Aristocrat’s paltry payout. Trouble is, only a handful of regular stocks pay in any frequency other than quarterly, so we’ll have to patch together different payout schedules to make it happen. To do that, let’s cherry-pick a combo of well-known payers and payout schedules that line up. Here’s an “instant” 6-stock monthly dividend portfolio that fits the bill:Procter & Gamble (PG) and AbbVie (ABBV) with dividend payments in February, May, August and November.Target (TGT) and Chevron (CVX), with payments in March, June, September and December.Sysco (SYY) and Wal-Mart Stores (WMT), with payments in January, April, July and October.Here’s what $600,000 evenly split across these six stocks would net you in dividend payouts over the first six months of the calendar year, based on current yields and rates: You can see the consistency starting to show up here, with payouts coming your way every single month, but they still vary widely—sometimes by $1,025 a month! It’s pretty tough to manage your payments, savings and other needs on a lumpy cash flow like that. And the bigger problem is that we’re pulling in $17,300 in yearly income on a $600,000 nest egg. That’s not nearly enough for us to reach our ultimate goal of retiring on dividends alone, without having to sell a single stock in retirement. We need to do better.

 ORIT’s average asset life has increased from 28 to almost 30 years over the last four years through active management, which is crucial for maintaining and increasing dividend cover over the long term. This gives us further reassurance that the progressive dividend policy can be maintained in the future.

The Holy Grail of Investing for the Snowball is to own mainly Investment Trusts that pay a ‘secure’ dividend, no dividend is completely secure but some dividends are more secure than others.

A Trust that pays a dividend of 7% returns your capital in 14 years, less if it’s a progressive dividend, then you have a share in your Snowball that pays income at a cost of zero, zilch, nothing.

The dividends could either be re-invested back into the Trust or another Trust earning more dividends to be re-invested back into the Trust or another Trust.

Octopus Renewables Infrastructure (ORIT)14 May 2025

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Octopus Renewables Infrastructure (ORIT). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

ORIT shows the tangible benefits of asset diversification…

Overview

Octopus Renewables Infrastructure (ORIT) owns a c. £1bn portfolio of renewable energy generation assets. A key strength is its diversification, with operating assets located in several different countries and spread across different technologies, principally solar, onshore and offshore wind. In the Portfolio section, we look at the tangible benefits of diversification. ORIT also has equity stakes in developers, giving it access to projects at an early stage, with the potential to generate higher returns. 2024’s sale of a fully operational Swedish wind asset for an 11% IRR provides a case study for the ORIT team’s ability to move a project from pre-construction to operation and then sale, generating returns above the trust’s long-term targets.

ORIT currently yields c. 8% and since 2021 has established a track record of increasing its fully covered dividend in step with UK CPI inflation. The dividend target set by the board for the financial year ending 2025, if achieved, would mean the fourth consecutive year of dividend increases in line with inflation. ORIT has a relatively high proportion, 84%, of its energy prices fixed over two years and almost 50% of its assets have inflation linkages over ten years.

ORIT’s high dividend yield is in part a function of its c. 27% discount and in response to this the board has adopted a capital allocation policy that is focussed on reducing debt, buying back shares, and selling some strategically selected assets while maintaining the ability to make selective new investments. We look at this policy in more detail in the Discount section.

ORIT’s manager, Octopus Energy Generation (OEGEN) is one of Europe’s largest investors in renewable energy and the team managing ORIT directly, led by David Bird and Chris Gaydon, has access to over 150 professionals with experience across all aspects of investment and management, covering multiple geographic markets and technologies.

Analyst’s View

ORIT has no direct exposure to the US, where a significant policy shift away from renewables is underway, and is invested across a range of countries that maintain a very constructive approach to renewables. Indirectly, the team reports that equipment supply chains are not affected by tariffs, as generally, the US does not export equipment involved in renewables. Conversely, supply chain pressures could ease if the US imports less. Consequently, the team see the US’s position as, at worst, neutral for ORIT.

In the Dividend section, we show how ORIT’s average asset life has increased from 28 to almost 30 years over the last four years through active management, which is crucial for maintaining and increasing dividend cover over the long term. This gives us further reassurance that the progressive dividend policy can be maintained in the future.

The US is, however, weighing heavily on wider investor sentiment, not least because it clouds the picture for interest rates and inflation, and the knock-on effect for ORIT and its peer group is a continuation of the wide discount. In response, ORIT’s capital allocation policy includes an expanded £30m share buyback programme and a reduction in total debt, funded by asset disposals at or above NAV. These have demonstrated the team’s ability to move a project from pre-construction, through to operation, to generate returns above the trust’s targets. If the very wide discount continues to narrow, investors could achieve returns considerably higher than this.

Bull

• Diversification provides quantifiable benefits to power output
• An 8% yield backed by a covered dividend growing in line with inflation
• Robust capital allocation policy enacted to address the discount

Bear

• Investor sentiment toward listed renewables is weak
• Capital allocation policy reduces ORIT’s ability to acquire new operational assets
• Gearing can amplify losses as well as gains

The Snowball will need to build a new position to replace VSL as it winds down.

Deleted from the watch list of the higher yielding shares.

BSIF,FGEN,NESF,RECI,RGL,SEIT and VSL as they are already in the Snowball.

NCYF,HFEL,TFIF,MGCI and SDV as they currently trade at a premium to NAV.

Deleted

GSF as that ship has already sailed.

SHIP,GRP as they are quoted in U$, another layer of complexity, unless you trade from over the pond.

The final decision would be if you want to add diversification to your Snowball or buy another Trust in a sector where you think the safest yields are.

Of course a lot could change before the cash from VSL arrives, so no decision needs to be made just yet.