The London Stock Exchange has some of the largest dividend yields in the world. And even in 2026, following a year of impressive capital gains, there remain plenty of high-yield opportunities for investors to capitalise on.
But is it possible to unlock some extremely high payouts?
Experienced investors will know that any dividend stocks supposedly offering a double-digit yield are likely too good to be true, with an extremely high probability of a payout cut. But for long-term investors willing to be patient, there are proven ways to sustainably earn 15%+ yields that keep on growing.
Here’s how.
Focus on cash flow, not yield
While it may seem counterintuitive, exclusively looking at the stocks offering the biggest dividends is a rookie mistake. Instead, investors should focus on identifying dividend-paying companies that generate an absurd amount of free cash flow.
Don’t forget, free cash flow is ultimately what funds shareholder payouts. And if a company can consistently generate excess cash while simultaneously investing in its long-term growth, investors could be rewarded with steadily expanding dividends.
A perfect example of this is Safestore Holdings (LSE:SAFE).
The self-storage business has very few ongoing operating expenses beyond building or buying new properties. As such, it enjoys high-margin, predictable, recurring monthly revenue, positioning the company as a cash-generating machine. And the results speak for themselves.
Anyone who invested £10,000 back in January 2014 has gone from earning an initial 3.6% dividend yield to 19.1% today.
With so much excess cash flow, Safestore’s grown its dividend by 434% over the last 12 years. That means, so long as the company keeps on paying out to shareholders, that initial £10,000 investment will continue generating almost £2,000 passively each year.
Still worth considering?
The scale of Safestore’s operations today is significantly larger than in 2014. After all, it’s now one of the largest self-storage companies in the UK.
Yet, despite taking a big bite of the overall market, self-storage remains highly fragmented. In 2025, Safestore earned £167.5m in revenue from its UK stores versus the industry’s total £1.2bn turnover. But when combined with the rest of Europe, the total estimated market size of self-storage is £20.7bn.
In other words, Safestore’s barely scratched the surface. And if it can replicate its British success across the channel, investing £10,000 today could still go on to unlock a massive double-digit yield a decade or so from now.
Of course, like all investments, there are no guarantees. Self-storage is a cyclical industry, strongly linked to the wider property market. When interest rates are low, people renovate or move houses more frequently, driving up self-storage demand. But as we’ve seen firsthand in the last few years, the opposite’s also true.
The negative impact of higher interest rates is only amplified by the group’s outstanding debts. Management has used its cash generation capabilities to borrow more money and fuel its European expansion. But when interest rates rise, that means more free cash flow’s gobbled up by interest, leaving less flexibility to hike dividends.
Nevertheless, with an impressive capital allocation track record, the risk-to-reward ratio looks promising, in my eyes. That’s why I’ve already added this dividend-growth stock to my portfolio, watching the yield slowly start to climb.
