- Be careful high yields aren't a red flag.
- Stay true to your investing philosophy.
Our large-cap screens give a spread of ideas for a portfolio of UK-listed income shares. When judging the small-cap and Aim-listed results, however, the investment case can instead often be one based on contrarian value.
High dividend yields can be a sign of value or even a warning. If the shares have sold off for some good reason, the trailing yield (i.e., based on what was paid out over the last twelve months) can look high but there may be cause to expect the dividend will be cut. This dynamic can apply to companies of any size but especially careful consideration should be made before buying small-cap shares on the basis of their high dividend yield.
