Coupons & Offers

2 of the best UK high-dividend shares

For-long term investors, it’s highly likely returns from dividends will make up a sizeable part of overall returns. That’s why I want to buy dividend shares and today I’m looking at two from the UK.
A high dividend share
First is real estate investmen…


For-long term investors, it's highly likely returns from dividends will make up a sizeable part of overall returns. That's why I want to buy dividend shares and today I'm looking at two from the UK.

A high dividend share

First is real estate investment trust (REIT) Primary Health Properties (LSE: PHP). It's well established and specialises in the rental of primary healthcare facilities within the UK and Ireland.

The group's portfolio comprises 513 primary healthcare facilities, valued at GBP2.6bn. Many of the assets are GP surgeries. Primary healthcare going more digital (a trend accelerated by the pandemic) could be considered a threat and could hold back the share price.

Overall, though I think Primary's assets should rise in value and provide good recurring revenue. An ageing population mean there should still be a big need for physical consultations with a GP in future. 

The REIT structure and the dividend

A pro and a con of the REIT structure is that it must pay out 90% tax-exempt income profits to shareholders. This is good for getting income when markets are steady.

The flip side is, it provides fewer reserves and room to manoeuvre when markets become trickier. Yet with a dividend yield of 4% and clients who have steady state-funded income, I think this is a solid dividend share. That's why I'll be happy to add it to my own portfolio when I'm looking for another income stock.

Another share yielding over 4% 

The second dividend share I like is investment trust Murray International (LSE: MYI).

The trust invests internationally with top holdings including Taiwan Semiconductor, Grupo Aeroportuario, GlobalWafers, CME and Roche. It's one I already hold and happily, it has seen good share price growth in recent times, even though it's high-yielding. This is probably partly to do with the post-Covid recovery and the preference for value shares at the moment.

The shares come with a dividend yield of 4.5%. Given that the strong recent share price performance will have pushed down the yield, it's still a strong high-dividend share, in my opinion.

The downsides of this dividend share

The downsides with this trust are that it's hard for a UK investor to know much about any of the holdings. From the top five holdings I've only heard of Roche, for example.

As an investor I need to put faith in management to select the right companies.   Another downside of buying the shares now is that they are at a slight premium to the net asset value. Usually this would put me off, but the shares have good momentum and could continue to benefit from the Covid recovery.

Ongoing charges of 0.68% are competitive for a trust that invests internationally and given the portfolio is very different from any tracker, is a price worth paying, in my opinion. What I mean is it would be hard as a UK investor to replicate what Murray International does, so I think it's worth paying for the manager. I like the trust as it provides my portfolio with geographic diversification, as well as holding a wide range of income-producing companies and bonds.

For me it's a very good high-dividend share.

5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic... And with so many great companies trading at what look to be 'discount-bin' prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you're a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down... You see, here at The Motley Fool we don't believe "over-trading" is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That's why we're sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you're 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Andy Ross owns shares in Murray International. The Motley Fool UK has recommended Primary Health Properties.

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro.

Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.