Picture supply: Domino’s Pizza Group plc
It wouldn’t be an exaggeration to name the UK market a dividend inventory investor’s dream. It’s house to actually a whole bunch of revenue shares, a lot of that are providing yields of 5% or extra.
Listed below are two shares — one from the FTSE 100 and the opposite the FTSE 250 — that I reckon have the potential to ship common revenue and share value development on prime. They’re each yielding above 6% on a forward-looking foundation.
Pizza
Domino’s Pizza Group (LSE:DOM) has had a horrible 2025, plunging 45%. And this implies the FTSE 250 pizza inventory is now 62% decrease than it was at the beginning of 2022. Ouch.
This displays sluggish development and ongoing margin strain on the UK grasp franchise of the Domino’s model. Consequently, the dividend has been a bit all over, falling from 14.7p per share in 2020 to 10p in 2022 then rising to 11p final 12 months.
Given the weak client setting, this isn’t a inventory with out threat. In November, administration warned that “the robust working setting is prone to proceed to affect order counts into 2026“.
Nevertheless, whereas difficult, issues do look like stabilising, with Q3 complete system gross sales up 2.1% and like-for-like system gross sales up 1%. For the complete 12 months, administration stored its steerage for underlying EBITDA of £130m-£140m. Dividends ought to proceed.
In the meantime, the corporate says its Chick ’N’ Dip provide has began effectively within the North West of England and Northern Eire. It could be rolled out throughout all shops in 2026, and the agency is continuous to evaluate alternatives for the acquisition of a second model to kickstart development.
The inventory appears to be like low-cost at 9.4 occasions ahead earnings, whereas there’s a 6.3% ahead dividend yield on provide. This may very well be one to take a look at extra intently for its turnaround potential, I really feel.
Insurance coverage
Subsequent up is Aviva (LSE:AV.), which is the polar reverse of Domino’s Pizza Group. Yr to this point, the FTSE 100 insurance coverage inventory has surged 44%.
Over 5 years, Aviva has greater than doubled!
But regardless of this large run, Aviva remains to be sporting a sexy 6.1% ahead dividend yield. And given administration’s bullishness on the route of the enterprise, traders could be set for some sturdy revenue development.
The outlook for Aviva has by no means been higher. The benefits of our diversified enterprise, 25m sturdy buyer base, and majority capital-light earnings, imply we anticipate to ship increasingly for our shareholders and clients. CEO Amanda Blanc
Aviva now expects its enterprise to be over 75% capital-light by the tip of 2028. This implies it is going to use much less capital to ship development, which bodes effectively for dividends and share buybacks.
That stated, a UK recession would pose challenges for Aviva, particularly if it was extreme sufficient to trigger households and companies to right away tighten their belts.
As issues stand although, the inventory appears to be like first rate worth, buying and selling at 11.5 occasions subsequent 12 months’s earnings. Placing this along with the 6.1% yield, share buybacks resuming subsequent 12 months, in addition to the latest Direct Line acquisition, and I feel Aviva remains to be value contemplating.
