The Motley Fool

5 Shares Yielding 5% Or More: BHP Billiton plc, Amlin plc, Lancashire Holdings Limited, SSE PLC & Greencoat UK Wind plc

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

BHP Billiton (LSE: BLT) is likely to face a shortfall in operating cash flow to fund its dividends and capital spending requirements. So far, though, BHP has committed to its dividend plan. But with net debt steadily rising, the miner would at some point need to re-prioritise lowering its level of indebtedness, unless commodity prices make a substantial recovery from today’s levels.

The volatility of commodity prices makes mining companies less attractive income plays. But BHP’s size and financial strength means that its dividend is safe for at least another two or three years. And as the company is increasingly judged by its yield, which stands at 6.5%, shares in BHP Billiton are unlikely to fall much further in the short to medium term.

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 a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!


Business-focused insurer Amlin (LSE: AML) has recently seen a benign level of claims. In 2014, it achieved a combined ratio of 89%. A combined ratio of below 100% represents underwriting profits.

But with the market softening; underwriting profitability going forward is likely to be significantly lower. Nevertheless, the insurer’s lean operating cost base and its stable combined ratios show it is competitively placed in the market.

Analysts expect its earnings will fall by 14% this year, which implies a forward P/E of 11.9. Its prospective dividend yield of 6.0% is particularly attractive, and it is covered by 1.4x earnings.

Lancashire Holdings

Diversified insurer Lancashire Holdings (LSE: LRE) had a combined ratio of 68.7% in 2014, which reflects an even higher level of underwriting profitability per dollar of premiums earned.

Including the value of special dividends, analysts expect Lancashire is set to yield 9.9% this year, and 9.1% for 2016. Lancashire is able to pay substantially all of its earning over the next few years; because it is in a strong capital position, and underwriting profitability had been particularly robust.

According to current analysts’ forecasts, Lancashire is currently trading at a forward P/E of 10.3, despite estimates of a 28% decline in underlying earnings as the market softens.


SSE (LSE: SSE) is widely considered as a dividend stalwart, as the electric utility company almost invariably pays a dividend yield in excess of 5% every year. Because of lower wholesale electricity prices, electricity generation margins are likely to continue to worsen. Analysts expect adjusted EPS will fall by 11% to 110.1 pence for 2015/6. This will give SSE a modest P/E of 13.6 and its expected dividend yield will be 5.8%.

The main attraction of SSE is that half its underlying earnings comes from its regulated assets, which generate stable cash flows, even when wholesale electricity prices fall or when electricity demand slumps. This helps to ensure that its dividend is fully funded, even though its dividend cover on earnings is relatively low, estimated at 1.2x on 2015/6 forecasts.

Greencoat UK Wind

Greencoat UK Wind (LSE: UKW) is an investment company focused on onshore wind farms. The end of the Renewable Obligation Certificate (ROC) subsidy scheme will no doubt hurt the expected returns of new onshore wind projects in the longer term, but this should also increase the value of its existing portfolio of wind assets. In addition, the newer contract-for-difference (CFD) scheme are not as bad as they initially seem, and investment returns should continue to be relatively attractive.

Because wind farms receive a significant proportion of their revenues through subsidies, their cash flow is typically more stable than fossil fuel electricity producers. This also allows Greencoat to pay out almost all of its earnings to its shareholders through dividends.

Greencoat currently supports a dividend yield of 5.4%.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.