Savvy investors looking to earn generous levels of passive income know that high-yielding shares should always be treated with caution. Sometimes, their high returns are an indication of a loss of investor confidence.
But it’s important not to tar all of them with the same brush. Here are two stocks yielding more than 6%. Does this sound too good to last? Let’s see.
Changing habits
ITV’s (LSE:ITV) having to adapt to a changing world. When I was growing up, it was just one of three television channels. And until Channel 4 came along in 1984, ITV had a monopoly on TV advertising revenue. Nowadays, it has to compete with other linear broadcasters, US streamers, and the internet.
In some respects, it’s remarkable that in February, UK viewers spent an average of 28 hours and five minutes watching its programmes. Despite such fierce competition, this is higher than the figures for Netflix and YouTube.
But concerns that viewers are moving away from traditional broadcasters have been weighing on the company’s share price, which has been stuck in a relatively narrow range for the past three years or so. Occasionally, it will leap on takeover rumours — there’s been recent speculation that Sky wants to buy its broadcast channels and streaming platform – but nothing’s come of these.
Since the pandemic, the group’s maintained its dividend at 5p. This lack of growth is a potential red flag to me.
| Financial year | Share price (pence) | Dividend (pence) | Yield (%) |
|---|---|---|---|
| 2021 | 110.55 | 3.30 | 3.0 |
| 2022 | 75.16 | 5.00 | 6.7 |
| 2023 | 63.28 | 5.00 | 7.9 |
| 2024 | 73.60 | 5.00 | 6.8 |
| 2025 | 82.35 | 5.00 | 6.1 |
Although I think it’s a little early to write off the group – ITVX is performing well and its production arm continues to grow — I see advertising revenues shrinking over the long term. I suspect this summer’s football World Cup will give it a bit of a boost, especially if England and Scotland do well. Otherwise, it looks like a case of managed decline to me. And if I’m right, its dividend’s likely to come under pressure. The stock’s not for me.
Bricks and mortar
On the other hand, I think the 6.9% yield offered by Land Securities Group (LSE:LAND) is more sustainable. It owns a £10.8bn portfolio (at 30 September 2025) of offices, retail parks, and shopping centres.
Admittedly, the UK commercial property market is cyclical but history shows that the sector regularly delivers above-inflation returns. This gives me some confidence that the group’s dividend can keep growing, albeit at a relatively modest rate. In cash terms, its payout was 3.4% higher for its March 2025 financial year than it was three years earlier.
Importantly, Land Securities Group qualifies as a real estate investment trust (REIT). In return for certain tax privileges, this means it must return at least 90% of its annual rental profit to shareholders by way of dividends. For those who want to invest in commercial property without having to find a huge amount of capital – or borrow – a REIT can be an attractive investment vehicle.
One issue to keep an eye on is the group’s debt. Higher interest rates will increase borrowing costs and lift its loan-to-value stance. This could restrict its future borrowing capacity or, worse, lead to a breach of lending covenants.
Looking ahead, the group’s scaling down its exposure to offices and moving into residential property developments. This should boost its future rental yield. On balance, I think the stock’s one that could be considered by income investors.
