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Dividends from UK shares are never guaranteed. As we saw during the Covid-19 crisis, even the most generous and financially secure company can postpone, suspend or eliminate payments to shareholders when catastrophes occur.
But as investors, we can take steps to minimize the chances of dividend disappointment. One tactic is to choose defensive companies that enjoy stable earnings (such as utilities, healthcare providers, and food manufacturers).
So is selecting companies with strong balance sheets, leading market positions and diversified income streams. This can protect profits when economic conditions suddenly worsen.
It is also important to distribute capital among a variety of different stocks. This diversification reduces the impact of company- and industry-specific factors on investor returns.
<h2 class="wp-block-heading" id="h-three-top-stocks“>Three main actions
With all this in mind, here are three super-safe dividend stocks on my watch list today.
| dividend participation | Forward Dividend Yield |
|---|---|
| asura (LSE: AGR) | 8.2% |
| Legal and general | 9.5% |
| Diageo | 3.1% |
As I say, dividends are never a sure thing and brokers' projections can sometimes fall short. But if current forecasts are correct, an investment of £20,000 distributed equally across these dividend stocks would provide a passive income of £1,380 this year alone.
A top REIT
Of this group, let's first delve into Assura. As the graph above shows, this FTSE 250 The company has a long history of growing dividends even in times of crisis.
City analysts expect this proud record to continue as well, even as the threat of high interest rates persists.
As a result, the company's dividend yield will increase to 8.5% next year and 8.6% the year after that.
High interest rates depress the net asset values (NAVs) of real estate stocks and can significantly increase your borrowing costs. But the defensive nature of Assura's operations (it owns and rents primary health care properties, such as doctors' offices) allows it to pay a large and growing dividend each year.
The real estate investment trust (REIT) is expanding rapidly to help it grow its profits beyond the medium term. But industry rules mean this costly program does not have catastrophic implications for dividends.
Under REIT regulations, Assura must pay out a minimum of 90% of annual rental profits in the form of dividends. Combined, these factors make the business a rock-solid income option in my opinion.
Please note that tax treatment depends on each client's individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any type of tax advice.
FTSE 100 Dividend Stars
Combined with Legal & General and Diageo in one portfolio, I think it could enjoy a truly spectacular dividend in the coming years. As you can see, these two stocks also have a long history of sustained payout growth.
Financial services company Legal & General does not operate in a defensive sector. In fact, future sales may remain vulnerable if interest rates remain high.
But he FTSE 100 The company's balance sheet has still allowed it to regularly increase dividends over the past decade. And with a Solvency II capital ratio of 223%, it remains cash rich today.
Meanwhile, Diageo is another reliable dividend stock thanks to its strong position in the largely resilient alcoholic beverages market. While facing extreme competitive pressures, fashion brands such as Guinness and Captain Morgan help reduce this threat.
I also like the wide diversification of the Footsie brand into different geographies and beverage segments. This gives earnings (and therefore dividends) greater stability.
