10%+ dividend yields! 3 top dividend stocks to consider in 2025

Considering these high-yield UK dividend stocks could be the key to unlocking a huge long-term passive income, Royston Wild explains why.

| 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.

Close-up of British bank notes

Image source: Getty Images

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.

Searching for the greatest high-yield dividend stocks to buy? Here are three worth further research whose forward dividend yields smash the FTSE 100 average of 3.6%.

M&G

At 10.1%, financial services provider M&G (LSE:MNG) offers the second-largest yield on the Footsie today.

Companies with double-digit dividend yields often come with danger. Such high yields can signal financial distress, an unsustainable dividend, or a falling share price. Some or all of these may signal deeper issues with the business.

Should you invest £1,000 in Moderna right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Moderna made the list?

See the 6 stocks

However, M&G doesn’t fall into any of these categories, in my book. It’s raised dividends each year since it was spun off from Prudential in 2019, and looks in good shape to continue this.

A Solvency II capital ratio of 210% as of June implies it remains in good financial health. This gives it enough scope to keep paying large dividends while investing for growth.

I think M&G could deliver huge long-term returns as demographic changes boost demand for wealth and retirement products. I’m also encouraged by its plans to build the Asset Management and Wealth divisions, areas which are building a head of steam.

Remember, though, that profits may come under pressure in the near term if interest rates fail to fall significantly and consumer spending remains under pressure.

Global X Nasdaq 100 Covered Call ETF

By investing in a basket of assets, the Global X Nasdaq 100 Covered Call ETF (LSE:QYLD) can help investors spread risk while targeting a market-beating passive income.

For this financial year, this exchange-traded fund (ETF)‘s dividend yield’s a huge 10.9%.

As its name indicates, the fund buys stocks on the Nasdaq 100 and sells covered calls on them. The income it generates is then distributed to shareholders in the form of dividends.

There are plenty of covered call funds to choose from today. What I like about this one is that it allows investors to own tech growth shares like Nvidia and Tesla while also delivering a substantial passive income.

On the downside, the fund’s focus on growth shares leaves it vulnerable to underperformance during economic downturns. Yet I still think it’s worth serious consideration from long-term investors.

SDCL Energy Efficiency Income Trust

In an era where cutting energy usage is gaining increasing importance, the SDCL Energy Efficiency Income Trust (LSE:SEIT) has the potential to also deliver blowout returns. With a 12% forward dividend yield too, income chasers in particular should give it special attention.

SDCL’s trust is extremely diversified, which allows it to absorb shocks at group level and continue paying large dividends. The business — which has raised shareholder payouts each year since its initial public offering in 2018 — invests across multiple sectors like healthcare, retail and data centres across the globe.

The threat of interest rates staying at higher-than-normal levels shouldn’t be taken lightly by investors. Yet I believe the danger this poses to earnings is more than baked into its rock-bottom valuation.

Trading at 52.7p per share, the trust’s dealing at a near-40% discount to its estimated net asset value (NAV) per share.

AI Revolution Awaits: Uncover Top Stock Picks for Massive Potential Gains!

Buckle up because we're about to dive headfirst into the electrifying world of AI.

Imagine this: you make a single savvy investment in some cutting-edge technology, then kick back and watch as it revolutionises entire industries and potentially even lines your pockets.

If the mere thought of riding this AI wave excites you and the prospect of massive potential returns gets your pulse racing, then you’ve got to check out this Motley Fool Share Advisor report – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And here’s the kicker – we’re giving you an exclusive peek at ONE of these top AI stock picks, absolutely free! How’s that for a bit of brilliance?

Get your free AI stock pick

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 recommended M&g Plc, Nvidia, and Tesla. 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

3 shares I’ve bought in the 2025 stock market sell-off

The stock market has experienced a lot of turbulence in recent weeks. Edward Sheldon has been taking advantage and buying…

Read more »

Investing Articles

Investors considering HSBC shares could aim for £8,453 a year in passive income from just £5 a day!

A relatively small daily investment in HSBC shares over several years can produce an extraordinary level of annual passive income…

Read more »

Investing Articles

The Rolls-Royce share price has fallen! Is this the moment investors have been waiting for?

Even the Rolls-Royce share price can't escape current stock market volatility, falling slightly over the last week. Should investors consider…

Read more »

Modern suburban family houses with car on driveway
Investing Articles

Down 59% from its 12-month highs, is this FTSE 250 stock too cheap to ignore?

Shares in FTSE 250 housebuilder Vistry are almost certainly too cheap to ignore. But are they discounted enough to offset…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

As the S&P 500 struggles to recover, here’s what Warren Buffett’s doing

The S&P 500 is fighting to regain its February highs amid ongoing trade tariff uncertainty. Our writer looks to the…

Read more »

Investing Articles

When will Lloyds shares hit £1?

Lloyds shares have surged over the past 12 months, but where will they go next? Dr James Fox thinks there’s…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Stock-market crash: the meltdown of the Magnificent 7

Just before Christmas, these Magnificent Seven stocks were riding high. But after the worst quarter for US stocks since autumn…

Read more »

Investing Articles

Wow! IAG shares are undervalued by 47%, according to analysts

IAG shares have surged over the past 18 months, but analysts are pointing to more growth. Dr James Fox takes…

Read more »