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I’ve been weighing up new revenue shares to purchase in an effort to spice up the common yield of my portfolio. After screening for money protection, payout ratios and dividend historical past, I created a good shortlist of choices:
| Inventory | Sector | Yield | Money protection | Payout file (years) |
|---|---|---|---|---|
| Investec (LSE:INVP) | Finance | 6.20% | 2.47 | 24 |
| Aberdeen Group (LSE: ABDN) | Finance | 5.80% | 2.30 | 20 |
| Imperial Manufacturers | Tobacco | 5.80% | 2.40 | 29 |
| BritishAmerican Tobacco | Tobacco | 5.3% | 1.68 | 46 |
| Reckitt Benckiser | Shopper items | 4.30% | 1.87 | 46 |
| Severn Trent | Utility | 4.20% | 2.6 | 37 |
I already personal shares in Reckitt and British American Tobacco. Since I don’t need one other tobacco inventory and already maintain shares in Nationwide Grid, I made a decision one other utility is pointless. So I made a decision to slim it all the way down to a selection between Investec and Aberdeen Group.
Let’s see how they evaluate.
Aberdeen Group
Aberdeen hasn’t had the very best run of late. The share worth has fallen virtually 50% since early 2018, prompting administration to take measures to enact a restoration. What adopted was a catastrophic rebranding try and subsequent reversal.
Regardless of all that, the eventual final result turned constructive — the worth recovered 26.6% over the previous 12 months. Now, with a meaty 5.8% yield, the dividend attraction’s clear. If this restoration has legs, I think the group will quickly resume dividend progress, which was paused through the pandemic.
If that’s the case, the mixed capital beneficial properties and dividend returns could possibly be substantial. However that turnaround isn’t assured, which is the place the danger lies. If the working enhancements don’t translate into larger margins and capital technology, it may wrestle to maintain paying dividends.
Investec
Investec is a British/South African funding financial institution that was not too long ago upgraded to the FTSE 100 from the FTSE 250. What I discover enticing is that the enterprise remains to be rising, not simply paying out outdated earnings. Newest outcomes present income up 4.2%, earnings up 5.2%, and a 5.48% dividend improve.
The financial institution’s newest outcomes present robust capital and liquidity buffers, with CET1 ratios of 13% and 13.6% (equal to Lloyds). Mixed with the robust outcomes, that offers me confidence dividends are dependable and can continue to grow.
Nonetheless, not like Aberdeen, share worth progress has been muted — they’re up solely 11.6% since July 2025. Plus, it’s extra uncovered to dangers round credit score losses, weaker lending demand and decrease borrowing exercise. If the UK or South African economic system experiences a downturn, Investec’s earnings would take a success.
On the plus facet, separate world operations add diversification.
My verdict
On stability, I’d say Aberdeen appears just like the riskier possibility, with an unsure restoration forward. Nonetheless, if issues go nicely, the expansion potential is notable. For traders eager on progress and revenue (and glad to abdomen some volatility), it’s value contemplating.
Investec, however, displays extra stability and stronger dividend sustainability. As such, it’s the choice that I really feel is healthier suited to my long-term revenue objectives. It’s already been on my watchlist for a while, so I plan to construct a small place within the inventory over the approaching months.
Must you make investments £5,000 in Investec Group proper now?
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Mark Hartley owns shares in British American Tobacco, Nationwide Grid, Lloyds, and Reckitt Benckiser.
