With the current deadline for the UK leaving the European Union being 31 October, politicians are adding to market volatility. We still do not know whether the UK will leave with a deal, or without one. There may be an extension to the October deadline, or not. There may be a general election very soon, or not.
Despite the uncertainty and volatility, there are three high-yield dividend stocks that I think could perform well regardless of what happens with Brexit.
Black gold
The first company I favour is BP (LSE: BP). It has a stellar history dating back over one hundred years as one of the largest oil and gas companies in the world. The worldwide nature of the firm is the reason I like it with all the uncertainty here in the UK.
For example, one third of the operations of BP come from the US, along with other major markets that do not involve the UK. This makes it less sensitive to the domestic issues in Westminster than other companies within the FTSE 100.
BP’s dividend yield is 6.5%, giving investors comfort that even with volatility in the share price, they can still pick up some income.
Britain’s biggest bank
HSBC (LSE: HSBA) is my second pick. It is currently the largest bank here in Britain, and the seventh largest bank in the world (when using total assets as a yardstick).
Whilst the business will be impacted by Brexit should we see consumer borrowing and spending decrease, it has enough of a presence across commercial and institutional levels to ride this out. HSBC has a diversified business model in the UK, which allows it to generate revenue from a wide variety of sources.
Added to the above, the business has already factored in Brexit into planning. It has already moved bankers to Paris and Frankfurt from London, avoiding an estimated £1bn-worth of losses should the trading facility between the UK and EU be cut off quickly. I think this was smart and shows the strategy of HSBC remains to be a global bank.
Regarding the dividend yield, it currently sits at over 6.6%.
Turn on the TV
The final stock that I am positive on is ITV (LSE: ITV). While being a very domestic business, offering media communications and production in the UK, I do not see this as a negative. This is because I believe it benefits from inelastic demand for its services.
The business generates most of its revenues from selling advertising slots on different channels. This is a straightforward business model at the core, and is likely to remain strong despite what happens regarding Brexit. Consumers will still watch television post-31 October, arguably even more as they tune in to the latest developments! With an audience there, businesses will continue to advertise to capture this space, fueling ITV’s revenue.
The current dividend yield for ITV is 6.34%.
