5% and 9% dividend yields! 2 of the best shares to buy now

These UK dividend stocks offer the sort of yields that make mincemeat of the competition. Here’s why I think they’re some of the best shares to buy today.

| More on:

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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The economic landscape remains fraught with danger as the public health emergency rolls on and inflationary pressures rise. I haven’t stopped buying for my Stocks and Shares ISA despite the uncertain outlook for corporate earnings though. And I’m still looking for the best shares to buy for my portfolio today.

One of the best green shares to buy

I believe UK shares involved in the business of renewable energy are top buys today. Demand for low-carbon energy is booming and legislative pushes across the globe means it should continue to do so too. This is where Greencoat Renewables (LSE: GRP) comes into the equation. The company operates a portfolio of wind farms, predominantly located in Ireland, and it’s expanding aggressively to drive the bottom line.

Greencoat acquired four wind farms on the Emerald Isle last year. And the company has been taking action to expand its wingspan on Continental Europe too. It started the ball rolling by purchasing three French wind farms in 2020. The UK share also entered Finland last month by spending €60m on a project that’s set for completion in 2022.

Remember that City forecasts can be blown off course (so to speak) by deteriorating trading conditions. And in the case of Greencoat Renewables this can be caused by the unpredictable nature of wind flows.

High and unexpected costs due to extreme weather damaging turbines can also hit the bottom line. But right now, analysts reckon this UK share’s profits will rise more than 170% year on year in 2021.

Windmills for electric power production.

This makes Greencoat Renewables one of the best value dividend shares to buy right now. Those earnings projections leave the UK energy stock trading on a forward price-to-earnings growth (PEG) ratio of 0.1. A reading below 1 can suggest a stock is undervalued. At current prices the company carries a mighty 5.2% dividend yield too.

A FTSE 100 dividend star

I think those seeking gigantic dividends should also give housebuilders close attention. It’s possible that a slow economic recovery from the Covid-19 crisis could hit homes demand in Britain. Naturally this means newbuild sales could hit the skids. But I still think some of the dividend yields in this sector make these UK shares worthy of a close look.

Take FTSE 100 stock Persimmon (LSE: PSN) for instance. The dividend yield here sits at a mighty 9.1% yield for 2021. I believe trading conditions should remain strong enough for the company to keep paying large shareholder dividends long into the future as well.

Government support for buyers remains substantial and, this month, it introduced a mortgage guarantee scheme that allows Britons to buy with just a 5% deposit. It’s possible that the Help to Buy equity scheme will run well into the 2020s as well. I expect Persimmon to remain a robust profits-making machine long into the future.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Just released: Share Advisor’s latest ‘Hold’ recommendation [PREMIUM PICKS]

In our Share Advisor newsletter service, we provide buy, sell, and hold guidance for our universe of recommendations.

Read more »