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With costs in freefall, these two UK revenue shares have seen their dividend yields soar. Now each above 9%, they appear extremely engaging — however will the companies recuperate, or are they simply worth traps?
I made a decision to take a better look.
B&M European Worth Retail
B&M European Worth Retail (LSE: BME) is a well-liked low cost retailer that’s been nose-diving in 2025. The shares are actually down a stomach-churning 55% for the reason that 12 months started.
I like a great low cost as a lot as the following particular person however that sort of worth lower raises questions, not pleasure. One other factor it raises is the dividend yield, now as much as 9.2%. In truth, for long-term shareholders, the whole yield for this 12 months could be as much as 18% when including the particular dividend.
However falling earnings compelled the corporate to chop the particular dividend from 20p to 15p this 12 months. Total, it nonetheless equates to a juicy return — however there’s a threat extra cuts might happen if earnings don’t enhance.
Promisingly, dividend funds are nonetheless well-covered by money and earnings — and backed by 11 years of uninterrupted funds. That means they’re each dependable and sustainable for at the least the following 12 months or so.
There are different extra urgent considerations although. B&M slashed its 2026 full-year EBTIDA forecast final month, to £470m from £520m. On the similar time, CFO Mike Schmidt introduced his departure following a board-commissioned third-party assessment of funds.
If the assessment finds extra severe problems, the inventory worth might crash even additional.
Regardless of these troubles, brokers seem assured in a restoration. Deutsche Financial institution, specifically, has opened a number of positions over the previous few months — regardless of some down as a lot as 30%.
In my opinion, I’ll await the outcomes of the monetary assessment earlier than contemplating the inventory. However this subsequent one appears extra promising to me.
SThree
SThree (LSE: STEM) is a London-based specialist staffing agency working manufacturers reminiscent of Pc Futures and Huxley.
The corporate was doing nicely post-Covid, however rising unemployment has despatched its earnings tumbling. The shares now commerce close to a 15-year low, following a 12% decline in web charges in Q3 2025.
It goals to show issues round by means of price optimisation and a concentrate on AI, however outcomes could also be sluggish.
Within the meantime, its dividend yield’s surged previous 9%, making it engaging to revenue traders. And in contrast to many struggling companies, dividends are well-covered by each money (1.8 occasions) and earnings (1.3 occasions).
It additionally boasts a 19-year-long monitor report of funds, giving it an added layer of belief.
That mentioned, the corporate did make minor dividend reductions in 2024 and once more his 12 months. Presumably, if issues don’t enhance, there’s a threat of additional cuts.
Cussed inflation mixed with AI-driven disruption continues to strangle the UK job market. It’s too early to say when issues will enhance, but when it drags on for too lengthy, dividend yields would be the least of our worries.
Aggressive authorities techniques may assist scale back rates of interest in 2026, which ought to assist. If that’s the case, SThree ought to see an honest restoration, making the present worth a lovely entry level for worth traders.
It’s a dangerous play however one that might ship each progress and revenue in the long run. For these with the urge for food, I feel the chances of a restoration make it value contemplating.
