The London Inventory Change has a few of the largest dividend yields on the planet. And even in 2026, following a 12 months of spectacular capital positive factors, there stay loads of high-yield alternatives for traders to capitalise on.
However is it attainable to unlock some extraordinarily excessive payouts?
Skilled traders will know that any dividend shares supposedly providing a double-digit yield are doubtless too good to be true, with an especially excessive likelihood of a payout reduce. However for long-term traders keen to be affected person, there are confirmed methods to sustainably earn 15%+ yields that carry on rising.
Right here’s how.
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Give attention to money circulate, not yield
Whereas it might appear counterintuitive, completely wanting on the shares providing the most important dividends is a rookie mistake. As a substitute, traders ought to concentrate on figuring out dividend-paying corporations that generate an absurd quantity of free money circulate.
Don’t overlook, free money circulate is finally what funds shareholder payouts. And if an organization can persistently generate extra money whereas concurrently investing in its long-term progress, traders could possibly be rewarded with steadily increasing dividends.
An ideal instance of that is Safestore Holdings (LSE:SAFE).
The self-storage enterprise has only a few ongoing working bills past constructing or shopping for new properties. As such, it enjoys high-margin, predictable, recurring month-to-month income, positioning the corporate as a cash-generating machine. And the outcomes converse for themselves.
Anybody who invested £10,000 again in January 2014 has gone from incomes an preliminary 3.6% dividend yield to 19.1% right this moment.
With a lot extra money circulate, Safestore’s grown its dividend by 434% over the past 12 years. Which means, as long as the corporate retains on paying out to shareholders, that preliminary £10,000 funding will proceed producing virtually £2,000 passively annually.
Nonetheless price contemplating?
The size of Safestore’s operations right this moment is considerably bigger than in 2014. In spite of everything, it’s now one of many largest self-storage corporations within the UK.
But, regardless of taking an enormous chunk of the general market, self-storage stays extremely fragmented. In 2025, Safestore earned £167.5m in income from its UK shops versus the business’s whole £1.2bn turnover. However when mixed with the remainder of Europe, the full estimated market dimension of self-storage is £20.7bn.
In different phrases, Safestore’s barely scratched the floor. And if it will possibly replicate its British success throughout the channel, investing £10,000 right this moment may nonetheless go on to unlock a large double-digit yield a decade or so from now.
In fact, like all investments, there are not any ensures. Self-storage is a cyclical business, strongly linked to the broader property market. When rates of interest are low, individuals renovate or transfer homes extra regularly, driving up self-storage demand. However as we’ve seen firsthand in the previous few years, the other’s additionally true.
The damaging influence of upper rates of interest is simply amplified by the group’s excellent money owed. Administration has used its money era capabilities to borrow more cash and gasoline its European growth. However when rates of interest rise, which means extra free money circulate’s wolfed up by curiosity, leaving much less flexibility to hike dividends.
However, with a formidable capital allocation monitor document, the risk-to-reward ratio appears promising, in my eyes. That’s why I’ve already added this dividend-growth inventory to my portfolio, watching the yield slowly begin to climb.
