CryptoPlankton wrote:Hi floyd
I was only trying to illustrate that it is possible to create (at least most of, if you are restricted by ethical concerns or a narrower view of sectors than some) a well diversified HYP without having to look beyond a fairly well established group of large caps from the FTSE 100. I am hesitant about recommending or advising against any of the shares for several reasons:
1) I no longer tend to research them in any depth as my "HYP" has been pretty complete for some time
2) I have no more investing skill than the next man/woman
3) The list was pretty much off the top of my head and others may disagree with some choices and think other companies should be included (in retrospect, I think I do myself!)
4) Ultimately, you need to buy shares that YOU feel comfortable holding
I think TJH has given a pretty good summary of how to go about it. I would start by looking at the whole of the FTSE 100 rather than just those listed - the following site summarises the yields:
https://www.dividenddata.co.uk/dividend ... et=ftse100As TJH implies, it is important not to assume the dividends will continue at the same levels and you should investigate any companies that make your short list further before choosing them (this is where you have to choose your own "safety" criteria such as dividend cover, years of rising dividend, debt, whatever makes you comfortable - as well as the market news and "smell" that TJH speaks of).
FWIW, looking at the above list, this is how I personally would start off:
Firstly, as the FTSE 100 average yield is currently about 4%, I would disregard AZN, DGE, ULVR, RB., BA., ADM, SBRY and NXT.
That would leave the following shares as the highest yielders in their sectors (as I see sectors, you may feel differently), with the next highest, where applicable, in brackets:
HSBA 5.54% (LLOY 5.04)
RDSB 5.73% (BP 5.67)
IMB 5.97% (BATS 4.70)
GSK 5.11%
RIO 6.32% (AAL 4.84)
VOD 7.38%
SSE 7.45% (NG. 5.61)
BT.A 6.85%
LGEN 5.91% (AV. 5.67)
DLG 6.39%
UU. 5.38% (SVT 4.38)
BLND 4.71%
RMG 5.15%
PSN 9.50% (BDEV 4.75)
WPP 4.86% (ITV 4.67)
MKS 6.18%
So, on the face of it, the "usual suspects" (as scratched together fairly haphazardly by me) are offering quite a juicy HYP spanning 16 sectors at the moment! Of course, it isn't quite as simple as that and more work should go into deciding a final selection. Would BATS be a better pick than IMB, given their histories and market news? Would NG. be a safer bet than SSE now for the reason TJH gave? Are BT. in a position to maintain that dividend? PSN's yield is 9.5% - that surely needs investigating - and so on...
It isn't a precise science, and we all need to apply our personal priorities and do our own research to satisfy ourselves that we are happy to invest in each company - and never accept that somebody else's opinion is any better than our own. Some people may be well informed and pass on useful information and advice, but the ultimate decision is our own. The only reason I suggested that we needn't look much further than the usual subjects is that it helps reduce the risk associated with investing in smaller companies but, if you are happy that the risk in adding one or two of those to your portfolio is acceptably low, then I'm certainly not saying it's wrong or you shouldn't - I have!
Good luck.
CP (a very average private investor)