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The FTSE 100 has a superb fame on the subject of dividends. Loaded with mature, financially sturdy firms, the index is a pure looking floor for buyers in search of the perfect dividend shares to purchase.
However is the Footsie’s crown starting to slide? Information reveals that smaller firms on the London inventory market could also be higher choices for giant dividends as we speak and sooner or later.
May dividend hunters who concentrate on blue chips be lacking out on potential riches elsewhere?
Leftfield dividend heroes
In response to Octopus Investments
each the FTSE SmallCap (excluding funding trusts) and the FTSE 250 proceed to supply the next dividend yield than the FTSE 100, which has declined over latest years as large-cap firms seemed to rebuild dividend cowl after the Covid pandemic.
Octopus believes this represents a gorgeous investing alternative for dividend lovers. In response to their fund supervisor Chris McVey,
we imagine it’s an anomaly that these firms are persevering with to fly beneath the radar for conventional revenue buyers. Traders ought to reap the benefits of this now as UK smaller-cap shares can supply them a compelling alternative when it comes to each absolute and relative worth, in addition to revenue, benefitting from engaging and rising dividend streams.
4 prime revenue shares
He’s not improper. I personally have been constructing a procuring record of non-FTSE 100 shares to think about for a big and sustained passive revenue. It’s a set that continues to develop.
Miner Central Asia Metals, inexperienced infrastructure inventory Gore Avenue Power Storage Fund, and financial institution Lion Finance have all caught my eye lately. Their dividend yields for 2026 are 7.4%, 8.3%, and 6% respectively.
The Schroder European Actual Property Funding Belief (LSE:SERE) sits on the prime of my wishlist although. This inventory lets out industrial actual property in Continental Europe and distributes the rents it receives in dividends.
Given its geographic footprint, there’s international change threat for earnings and dividends when the belief converts euros into kilos. Encouragingly, although, the corporate has a robust document of delivering juicy money rewards regardless of this hazard.
This displays the long-term contracts Schroder has its broad vary of tenants locked into. It’s additionally due to the corporate’s classification as a REIT — beneath sector guidelines, at the very least 90% of annual rental earnings have to be paid in dividends.
For 2026, the belief’s dividend yield is a gigantic 8.2%.
Please observe that tax therapy relies on the person circumstances of every consumer and could also be topic to vary in future. The content material on this article is supplied for data functions solely. It isn’t meant to be, neither does it represent, any type of tax recommendation.
Right here’s what I’m doing now
I’m not saying that I plan to shun FTSE 100 shares when in search of dividends in future. I personal a big number of large-cap revenue heroes in my portfolio, and lately added extra Aviva and HSBC shares for his or her passive revenue prospects.
Nonetheless, it’s price trying additional afield for prime revenue shares as properly, as you’ll be able to see. Not doing so might price buyers a fortune in misplaced dividends.
