I’m building a portfolio of high-yielding dividend shares and with a new Stocks and Shares ISA allowance at my disposal, . The good news is there are plenty of bargains out there. By which I mean top blue-chips trading at low valuations while offering ultra-high yields.
I love bagging cut-price stocks. By purchasing them while they’re cheap, as measured by the price-to-earnings ratio, I reduce the risk of overpaying. Also, there’s no speculative premium in the price, as can happen with shoot-the-lights-out .
FTSE 100 bargain hunt When a company’s share price falls, the yield rises. So bargain stocks can often combine with a super-high dividend income as well. The danger is that the shares are cheap because they aren’t much cop.
I could even fall into a value trap, where the stock never recovers, and the dividends slowly dry up as the company struggles to boost profits and generate cash. I’m optimistic that the five stocks listed here won’t fall into that lethal trap but, as ever with investing, there are no guarantees. One of my favourite portfolio holdings is wealth manager ( ).
The attraction’s obvious, as its shares yield a mighty 9.89%. That’s almost double the interest on a best buy easy access savings account.
Ultra-high yields can be vulnerable but when I bought the stock last year, I decided M&G was generating enough cash to sustain such a generous shareholder. Whether the board wants to is a different matter. It only increased the 2023 dividend per .
