When building a robust second income, here are several shares that stack up well against the competition.

Plenty of options

For comparison, the FTSE 250 average yield is currently 3.52%. To try to push for a four-figure monthly passive income stream, I’d target companies with a yield double the average. Fortunately, this isn’t a crazy idea. In fact, 21 stocks currently have dividend yields above 7%. This means an investor has plenty of choices to pick a diversified mix of stocks.

Chesnara’s a classic cash cow insurer, focused on managing pension books that generate predictable, long-term cash flows. That steady stream of surplus capital has supported a long track record of progressive dividends, making it particularly attractive for income investors. The current dividend yield is 7.73%.

Supermarket Income REIT has a dividend yield of 7.64%. It owns large grocery stores, let to major UK supermarkets on long, inflation-linked leases. That combination of essential retail tenants and built-in rent increases provides highly visible, resilient income.

Primary Health Properties invests in GP surgeries and healthcare facilities, with most rents ultimately backed by government funding. I like the stock because it combines the defensive nature of healthcare demand with long leases and inflation-linked income. It has a yield of 7.79%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Each stock mentioned has its own risks, which should be carefully considered before making any investment decision.

Investing £600 a month in a range of stocks with an average yield of 7% could see a portfolio grow quickly. With dividends reinvested, it would take just under 15 years to have at least £1,000 a month being paid out on average. Of course, trying to forecast this far into the future is tough. So it could take more or less time in reality to reach this goal.

Ongoing transformation

Another example that could be considered for this strategy is Aberdeen Group (LSE:ABDN). Over the past year, the share price is up 53%, yet it still has a high dividend yield of 7.48%.

As a fund manager, Aberdeen’s revenues are closely tied to assets under management. When markets rise, so do client portfolios and the fees earned on them. Even with the volatility in March, the stock market performance in the past year has been very strong.

This has acted to stem outflows. For 2025, the business recorded a net outflow of £1.7bn, well below the £6.1bn in the year before.

Of course, I’d like the business to be posting net inflows. A key risk going forward is continued outflows. But the company’s undergoing a strategic transformation, so investors should be patient.

It’s changing from a traditional asset manager into a broader wealth platform. The acquisition and growth of Interactive Investor has been key here, with that division now contributing a significant chunk of profits and benefiting from the DIY investing boom. In other words, Aberdeen’s becoming less reliant on struggling active funds and more exposed to structurally growing areas.

I think all of this not only means the dividend is secure, but also makes it a stock I think investors could consider.

The post 4 FTSE 250 shares that could generate a 4-figure monthly second income appeared first on The Motley Fool UK.

In the past five years alone, it has paid the same 14.6p dividend. These generated respective market-beating annual average yields of 6.1%, 7.7%, 8.2%, 10.3% and 7.1%. By contrast, the current FTSE 250 average dividend yield is 3.4%, and the FTSE 100’s is just 3.1%.

Even better — analysts forecast that it will keep paying the same dividend over the medium term, at minimum.

So, how much could I make in the coming years from my £20,000 holding in the firm?

Dividend payouts trajectory

Based on Aberdeen’s current dividend yield of 7.5%, these shares would make me £22,241 in dividends after 10 years.

 This assumes the forecast yield of 7.5%, although dividend returns can change over time — down or up. It also reflects the payouts being reinvested into the stock to harness the supercharging effect of ‘dividend compounding’.

After 30 years on the same basis, the dividends could have increased to £168,431.

At the end of this 30-year investment cycle, the total value of the holding could be £188,431 (including the original £20,000 investment). And that could deliver a yearly income of £14,132 a year from dividends alone!

Potential for share price gains too?

Aberdeen shares have dropped 15% from their 16 January one-year traded high of £2.29. The fall has compounded the undervaluation that was already there, in my view, and leaves the stock looking cheap.

Compared to its competitors’ average of 26.6, its price-to-earnings ratio of 8.8 looks a bargain. These peers comprise RIT Capital Partners at 6.4, M&G at 22.2, Legal & General at 28.7, and Bridgepoint at 49.1.

The same is true of Aberdeen’s price-to-book ratio of 0.7 against the 2.7 average of its rivals. And it is also undervalued at a price-to-sales ratio of 2.5 compared to the peer average of 2.7.

How does its earnings growth look?

Rises in any firm’s dividends and share price are ultimately driven by increases in earnings (profits). A risk here for Aberdeen is the high degree of competition in its sector, which may squeeze margins. Another is any sustained further surge in the cost of living that may prompt customers to close accounts.

However, growth momentum looked strong in its full-year 2025 results, released on 3 March this year. IFRS profit before tax jumped 76% year on year to £442m, highlighting the operational leverage resulting from the firm’s reorganisation.

This involved removing layers of middle management, reducing costs, and sharpening the product offering to clients.

Net outflows improved materially, with the £1.7bn figure representing a sharp recovery from 2024. It underlined how a stronger investment performance — 84% of assets under management outperformed the relevant benchmarks — is helping rebuild client confidence and revenue momentum.

My investment view

With its market-beating dividend yield, clear undervaluation, and earnings momentum accelerating sharply, Aberdeen looks well placed to keep rewarding long-term investors.

For me, that combination of dependable income and improving fundamentals makes the compounding case especially compelling and I will be buying more of the stock soon.

Other high-yield shares that look cheap to me have also caught my eye in recent days.

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That creates a rare window. Investors buying today aren’t just picking up shares at lower prices — they could be locking in higher income streams for decades to come.

So how much difference could acting now make to the income a portfolio generates in the future?

How small return differences drive passive income

Small changes in annual returns during the contribution phase can have a big impact on future passive income. Over time, even a small gap in performance compounds into something far more meaningful.

The chart below highlights this clearly. By contributing £10,000 each year for 20 years, two different return scenarios — 7% and 9% — lead to very different outcomes.

At first, the gap might look small, but over two decades, the difference compounds dramatically, shaping how much passive income a portfolio can generate in retirement.

Chart generated by author

After years of compounding, that 2% gap leads to a £100,000 difference in the final portfolio value. Over a 25-year drawdown it could mean roughly £5,000 more in inflation-adjusted passive income each year.

While many FTSE 100 stocks are offering attractive yields, I’ve also been looking further down the market for opportunities.

Dividends and growth

Aberdeen (LSE: ABDN) may not make headlines every day, but its forward momentum is catching my attention. The stock has fallen 13% in the recent sell-off, lifting the dividend yield up to 7.5%. Its growth prospects, however, really stand out.

The company enters 2026 with outflows from its Adviser business at less than half of last year’s levels. Meanwhile, interactive investor continues to gain traction. Its flat pricing and platform innovations are resonating with investors. A recent high-profile outage at Hargreaves Lansdown could hand interactive investor extra market share — a reminder of how crucial trust is in this industry.

Shifting asset allocation

Structural market trends also play in Aberdeen’s favour. Volatility, elevated inflation, and a global shift away from US tech are creating opportunities for its Investments division. Emerging markets, alternative assets, and undervalued regions — areas where the asset manager has deep expertise — could drive growth over the coming years.

To illustrate these shifting trends, Aberdeen’s Gold ETF started with just $10m in 2009 and now manages over $7bn.

Outflows remain a key risk. Aberdeen is targeting a return to net inflows by 2027, but if funds continue to underperform global benchmarks, it may struggle to attract new independent financial advisers to its platform. This could limit future growth and keep pressure on the share price.

Long-term thinking

When markets wobble and the future feels uncertain, savvy investors with a long-term mindset act.

Structural growth drivers remain in place across the investment landscape. The responsibility for funding retirement is increasingly falling on individuals, while the advice gap continues to widen.

Intergenerational wealth from baby boomers will see tens of trillions of pounds transferred over the next 20 years.

These forces are creating opportunities for innovative companies with strong brands that can deliver financial solutions in a complex world.

For long-term investors, this isn’t just about growth — it’s about locking in a steady passive income for decades. And Aberdeen is far from the only opportunity I’m watching.

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Three popular names that have slipped this past month are Pets at Home (LSE: PETS), British Land and Aberdeen (LSE: ABDN), each sporting chunky yields between 6%-7%.

Pets at Home

Pets at Home makes most of its money from pet products, vet services and grooming, so its sales are tied to everyday (but emotionally-driven) pet spending rather than big-ticket items. The shares now yield roughly 6.7%, with dividends covered 3.6 times by cash and a payout ratio of 77%.

Recent results showed steady profits and continued dividend growth over the last decade, suggesting the board’s comfortable sharing cash while still investing in the business.

Valuation looks reasonable, with a price-to-earnings (P/E) ratio of 11.7 — lower than many UK consumer retailers. However, stubborn inflation poses a risk: while people rarely cut pet spending first, any deeper recession could slow discretionary purchases like toys or accessories.

Stiff competition from low-cost online retailers could pressure margins if shoppers look elsewhere.

British Land

British Land’s one of the UK’s big listed property companies, managing offices, retail parks and mixed‑use sites. Its shares currently offer a dividend yield of roughly 6%, with payouts accounting for only half of earnings. In its latest half‑year results for 2025/26, underlying profit rose 8% and earnings per share nudged higher, allowing management to lift the interim dividend by 1%.

Higher interest rates continue to challenge commercial property values, but as markets start to price in future cuts, yields on high‑quality property groups like British Land look more attractive.

The big risk is that if the UK economy weakens again, rental demand for offices and retail space could fall. That would pressure both income and property valuations.

Aberdeen

Aberdeen’s an asset manager that earns fees for running funds and portfolios for clients. The shares trade on a below-average P/E ratio and the dividend yield of 8% is very attractive. The company has kept the dividend going for 19 years and the latest numbers show a payout ratio around 80%. That’s a bit high but the dividend is still sufficiently covered by current earnings.

That limited cover’s a key risk though. If markets weaken and fee income drops, management could eventually decide to trim the payout to protect the balance sheet. On the flip side, a recovery in markets and fund flows would give it more breathing room, as rising asset values generally lead to higher fee revenue.

A rare income opportunity

For UK income investors, these three shares show why market dips can be useful moments to go shopping. Prices down 8%-10% can lift starting yields into the 6%-7% range.

Naturally, nothing’s risk free – from online competition to property cycles and market‑sensitive fee income. But the toss-up’s higher yields today to accept those risks, which can tilt the odds in your favour if you’re patient.

Any of these three may be worth considering but as always, I’d spread money rather than backing just one name, so that one bad egg doesn’t spoil an entire passive income portfolio.

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The business is now leaner, more focused and generating the cash flow needed to support that payout through the next phase of its transition. In effect, investors today are being paid a premium yield to wait for the strategy to mature.

So, how much can be made from the stock going forward?

The restructuring plan

Following its demotion from the FTSE 100, Aberdeen implemented a restructuring plan. This comprised three key elements: simplifying the organisation, reducing costs, and boosting profitability.

Simplification involved selling non-core assets and refocusing on its interactive investor (ii), Adviser, and Investments divisions.

Cost reduction focused on delivering at least £150m in annual savings by the end of 2025. Much of this came through removing layers of middle management.

And the final element was reshaping its core businesses through strategic repositioning and repricing to clients.

Has it been reflected in results?

A risk ahead is that this restructuring plan falters for some reason. However, Aberdeen’s full-year 2025 results, released on 3 March, appear to show the plan translating into strong operational momentum.

Profit before tax rose 76% year on year to £442m, driven by a robust operating performance. Diluted earnings per share increased 63% to 21.2p as higher profits and investment returns lifted the bottom line.

Adjusted capital generation grew 5% to £323m, supported by stronger operating profits and lower restructuring and transaction costs. Group assets under management and administration increased 9% to £556bn, with strong ii inflows offsetting outflows elsewhere.

Looking at 2026, management expects adjusted operating profit of at least £300m and net capital generation of around £300m in 2026. Capital generation over the medium term (to end-2028) is targeted to grow 5%–10% annually once the 2026 goal is met.

All these trends align with management’s three-year plan to rebuild flows, lift margins and shift the group further toward scalable, platform-led earnings. And this is a trajectory that underpins the dividend while the wider transition continues.

How much dividend income?

Aberdeen has paid the same 14.6p dividend every year since 2020. And analysts forecast it will continue to do so each year to the end of 2028.

On the current share price of £1.99, this gives a dividend yield of 7.3%. By comparison, the average dividend return of the FTSE 250 is just 3.3%.

So, my £20,000 holding in the firm could make me £21,410 in dividends after 10 years. This is based on an average 7.3% yield, although this can go down as well as up. It is also based on the dividends being reinvested back into the stock to harness the power of ‘dividend compounding’.

On the same basis, the dividends could be £157,523 after 30 years. Including the £20,000 stake, the holding could be worth £177,523 by then. And this could pay me £12,959 a year in dividend income by that point!

Given this and the potential for share price gains too, I will be adding to my holding in the company as soon as possible.

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FY25 results

Aberdeen (LSE: ABDN) delivered a solid FY25 on Tuesday (3 March), with adjusted operating profit up 4% to £264m and IFRS statutory profit before tax soaring 76% to £442m, helped by gains on its Standard Life (formerly Phoenix) stake. Net capital generation remained robust at £239m, comfortably supporting the 14.6p dividend — currently a 7% yield.

The standout performer was interactive investor (marketed as ‘ii’). Profits jumped 34% to £155m, fuelled by record trading activity, 500k customers, and a 30% rise in SIPP accounts. Its flat pricing and ongoing platform innovations continue to resonate strongly with individual investors.

Adviser posted lower profits after strategic price cuts aimed at enticing independent financial advisers, but net outflows almost halved to £2.2bn, signalling the first steps of a long-awaited turnaround.

In Investments, net flows stabilised, with a modest positive £0.1bn — nothing dramatic, but perhaps the first signs the business is finally beginning to turn the corner.

The transformation programme exceeded its £150m target, delivering £180m in annualised savings while enabling reinvestment in technology and customer experience.

With a high dividend yield and the momentum from ii, Aberdeen is showing the early signs of a business that could recover from years of outflows — and one that investors may soon start to notice.

Shifting global markets

Aberdeen has struggled over the past decade mainly because passive investment vehicles dominated, with US tech giants absorbing the bulk of global capital flows. If you weren’t in the Magnificent 7, beating the market was nearly impossible.

That backdrop is changing. Volatility is returning, the dollar looks historically high, and investors are reallocating capital.

Emerging Markets, Asia Pacific, the UK, and Europe have all outperformed the US for the first time in years. Defensive assets, like gold and silver, have also attracted attention. Aberdeen’s Gold ETF, launched in 2009 with $10m, now manages over $7bn. The market is evolving fast.

Its Investments business serves global sovereigns, institutional investors, and other large clients — typically slow to shift mandates, but a meaningful change could be a major boost. Meanwhile, independent financial advisers may turn to Aberdeen if client portfolios underperform.

With a leaner Investments business, disciplined cost management, and strong capital coverage, the asset manager is gradually building the infrastructure to capture these long-term structural trends. The turnaround is a marathon, not a sprint, but the potential payoff is significant.

What’s the verdict?

In my view, Aberdeen is a classic contrarian play. Market trends are shifting away from concentrated US tech dominance toward broader, more volatile opportunities. Emerging markets, alternative assets, and undervalued regions now present structural tailwinds for its sizeable Investments division.

At the individual level, people are increasingly taking control of their finances, which is reflected in growing SIPP portfolios and record engagement on interactive investor. This demonstrates that Aberdeen can capture everyday investor demand while steadily building long-term structural strength.

With disciplined cost management, a leaner Investments business, and a strong capital position, the company is gradually laying the foundations to benefit from these evolving market dynamics. For all these reasons, I recently bought the shares myself.

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The investment management company has had a tough five years, down 33%. But it’s been staging something of a comeback since early 2025 — up 78% since its 52-week low last April.

The main concern I think investors have to watch is that the dividend hasn’t risen in the past few years. And forecasts show it not moving for the next three years either. Over a period of high inflation, the cash value of the Aberdeen dividend has been falling in real terms.

January’s Q4 trading update revealed a 9% rise in assets under management. And the firm’s investment platform saw growth of 500,000 new customers. Aberdeen sounds like a long-term income investment to consider — but I want to see those dividend grow.

Building back

Taylor Wimpey (LSE: TW.) gives us the full 2025 lowdown on 5 March. And this time we’re looking at a fat 8.3% predicted yield. The house builder earlier announced 10,614 UK home completions excluding joint ventures, up from 9,972 in 2024. That’s around the middle of management’s guidance range.

The overall average selling price edged up to £335k, from £319k. At the end of December we were looking at an order book valued at £1,864m, down a bit from £1,995m the previous December.

Net cash declined a bit, from £565m at the end of 2024 to £343m. And that might raise a little concern about the dividend. Analysts see it steady, but not rising in the next few years — and only barely covered by earnings by 2027.

So a dividend cut is the biggest danger I think I see — and I’d expect it to cause a share price dip. But I reckon long-term investors could do well to consider all the main UK house builders.

Insurance cash cow

It’s the turn of Legal & General (LSE: LGEN) on 11 March, with its forecast 7.9% dividend yield currently the biggest on the FTSE 100. Forecasters don’t expect 2025 earnings to cover the dividend. But they do see cover returning in 2026, and then growing in 2027.

I think my biggest concern right now is a forward price-to-earnings (P/E) ratio of 16. That might seem good — and barely above the Footsie’s long-term average — by usual standards. But this can be a very cyclical sector. And I’m not sure the current share price has enough safety room to cope with any volatility downturn.

But for investors who aren’t worried about short-term ups and downs? I see Legal & General as a potential long-term cash cow. And I definitely rate it as one of my top income possibilities right now. In fact, I’m thinking of adding to my same-sector holding in Aviva.

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When you break down the calculations, the potential savings can be highly advantageous. But how does one do that, and what’s a realistic goal?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Crunching the numbers

A decent target to aim for is four figures of passive income every month from dividends. With an average 7% yield, £1,000 in dividends a month (£12,000 a year) needs a pot of roughly £170,000. For £1,200 to £1,300 a month, it would need closer to £200,000 to £220,000.

So the real question is: how long might it take to grow your ISA to that size?

Say you drop in the full £20,000 ISA allowance this year, then keep adding £300 a month. With an average 7% yield and moderate market growth, you might be looking at a total return of roughly 8–10% a year (assuming dividends are reinvested). That is not a promise, just a reasonable working number based on long‑term stock market returns.

With £20,000 up front and £300 a month going in, hitting around £200,000 could take roughly 15 years (in a strong 10% scenario). If returns are nearer 8%, it could take closer to 18 years.

Either way, it is a long game, not a quick win. But the compounding starts to do the heavy lifting after a decade or so.

Now, what could you actually own inside that ISA? 

Identifiying dividend gems

Abrdn (LSE: ABDN) is one example of a UK dividend share for income hunters to consider. It’s a big wealth and investment group, managing over £500bn for clients worldwide, with assets under management and administration of about £511bn at the end of 2024.

Recent prices put its forward dividend yield a touch above 7%, so it fits my above example well.

Financially, Abrdn has started to look a bit steadier in recent years. In 2024 it delivered adjusted operating profit of about £255m, slightly up on the year before, and swung to an IFRS profit before tax of £251m (instead of a loss).

The full‑year dividend was held at 14.6p per share again, the same level paid since 2020, showing the board is keen to keep income flowing even while it reshapes the business.

Challenges to consider

Despite the impressive yield, dividends haven’t grown in cash terms for several years, and the three‑year dividend growth rate is negative. That’s not ideal if you want rising income. It also pays out a large chunk of its earnings as dividends, with recent payout ratios around the 80% mark. That leaves little for operations if profits dip, risking a dividend cut.

To meet rising costs and profit headwinds, the group is cutting around 500 roles, which brings execution risk. On top of that, its business is tied to stock markets and investor confidence, so bad years for markets can hurt.

To mitigate these risks, consider including some lower-yielding defensive stocks like Tesco or National Grid. While some payouts may be smaller, their long-term reliability can be advantageous.

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These projections look well supported to me by a reorganisation programme that continues to show real traction.

So, how much dividend income can I make going forward?

Earnings growth momentum

The reorganisation plan followed its demotion from the FTSE 100 in September 2023. It involved delivering at least £150m of cost savings to reshape the group’s core operations.

This included removing around 500 jobs and cutting management layers to boost efficiency and improve the product offering to customers.

A risk to Aberdeen is any failure to continue adhering to these principles going forward. However, by the end of 2023, it had already exceeded its initial £75m cost-cutting target. The remaining £75m in cuts is expected to be announced in its 2025 results to be released on 3 March.

Aberdeen delivered a £251m profit in its 2024 annual results against a £6m loss in 2023. And its H1 2025 results saw profit up 47% year on year to £252m. Net capital generation rose 7% to £111m, and diluted earnings per share soared 48% to 13.5p. Assets under management (AUM) also increased — to £517.6bn — beating analysts’ forecasts of £511.5bn.

In its latest trading update (Q4), AUM increased to £556m. And Aberdeen reiterated its 2026 targets of £300m+ in adjusted operating profit, and net capital generation of around £300m.

How much dividend income?

Aberdeen has paid the same 14.6p dividend every year since 2020. These have generated average annual dividend yields in those respective years of 5.2%, 6.1%, 7.7%, 8.2%, and 10.3%. The variations occur because dividend yields move as share prices (and payouts) alter.

The current dividend yield is 6.8%, based on the same 14.6p dividends and the present £2.16 share price.

Looking ahead, the consensus forecast of analysts is that Aberdeen will pay the same dividend until at least end-2028.

So, my £20,000 holding in the stock would make me £19,402 in dividends after 10 years. This also factors in the dividends being reinvested back into the shares — known as ‘dividend compounding’. It is a similar idea to leaving savings to accrue in a bank account, and it effectively turbocharges dividend returns.

On the same basis (which is not guaranteed, of course), the dividends would increase to £132,929 after 30 years. At that point, the holding would be worth £152,929 (including the original £20,000 investment).

And that could pay me a yearly income from dividends of £10,399.

My investment view

Aberdeen’s appeal to me ultimately rests on the rare combination of a dependable dividend and it building earnings momentum. This is reinforced by a restructuring plan that is already delivering exactly what management said it would.

These are the reasons why I bought the stock in the first place and have added to it since. They are also the reasons why I think the shares are well worth the attention of other investors.

I also have my eye on other high-dividend-yielding stocks in the financial and other sectors.

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The shares offer a chunky 7% dividend yield that analysts expect to remain unchanged until the end of 2028. And there may be capital gains too, as it looks undervalued on key measures against its peers.

These positive factors are underpinned by the company’s recent run of results. They show clear progress in its ongoing restructuring plan.   

So, is now the time for me to add to my holding in this global investment management firm?

What’s the plan?

Aberdeen began restructuring shortly after being demoted from the FTSE 100 in September 2023. This involves simplifying its business, cutting costs by £150m, and focusing on areas where it has genuine competitive strength.

From a £6m IFRS loss in 2023, Aberdeen delivered a £251m profit in its 2024 results, released on 4 March 2025.

Its April Q1 trading update saw the firm forecast a £300m+ operating profit and around £300m of net capital generation in 2026.

And its H1 2025 results, published on 30 July, saw IFRS profit up 47% year on year to £252m. Net capital generation rose 7% to £111m, and diluted earnings per share soared 48% to 13.5p.

Assets under management (AUM) also increased to £517.6bn, beating analysts’ forecasts of £511.5bn. And its most recent update — 22 October’s Q3 numbers — showed AUM rise 6%.

Aberdeen also reiterated its 2026 targets of £300m+ in adjusted operating profit, and net capital generation of around £300m.

Share price gains in view too?

Ultimately, it is earnings (‘profits’) growth that drives any company’s dividends and share price higher over time.

A risk for Aberdeen is any further rise in the cost of living that could prompt customers to withdraw funds.

However, the stock looks undervalued to me on several key measures compared to its competitors. Its 0.7 price-to-book ratio is the lowest in its peer group. This includes RIT Capital Partners at 0.8, M&G at 2.2, Bridgepoint Group at 2.6, and Legal & General at 6.2.

Its 11.9 price-to-earnings ratio also looks cheap against its peers’ average of 37.3. And so does its 2.9 price-to-sales ratio compared to its competitors’ average of 3.9.

How much could I make in dividends?

Aberdeen has paid the same 14.6p dividend every year since 2020. And consensus analysts’ forecasts are that it will continue to do so each year to the end of 2028.

On the current share price of £2.10, this gives a dividend yield of 7%. By comparison, the average dividend yield of the FTSE 250 is just 3.4%.

So, my present £10,000 holding in the firm could potentially make me £10,097 in dividends after 10 years. This is based on an average 7% yield, although this can change a lot over time. It is also based on the dividends being reinvested back into the stock.

On the same basis, the dividends would be £71,165 after 30 years. Including the £10,000 stake, the holding would be worth £81,165 by then. And this would pay me £5,682 a year in dividend income by that point!

Given this and the potential for share price gains too, I will be adding to my holding in the company very soon.

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