Image source: Getty Images
Looking for ways to charge your income with UK shares? Here are two top dividend yielding stocks in 2025 smash the FTSE 100 average 3.5%:
| A dividend stock | Forward dividend yield |
|---|---|
| Taylor Wimpey (LSE:TW) | 8% |
| Foresight Solar Fund (LSE:FSFL) | 10.7% |
Assignments are not guaranteed. But if consumer forecasts are correct, a sum of £20,000 invested equally across these businesses will generate a secondary income of £1,880 next year alone.
That’s why I think they deserve serious consideration.
Taylor Wimpey
Housebuilder Taylor Wimpey isn’t taking its risks right now. The gloomy economic situation, combined with signs of persistent inflation, casts a shadow over the sector’s demand towards 2025.
As if this is not enough, profit warnings by Persimmon again Vistry due to cost pressures also distracted investors. As a result, Taylor Wimpey’s share price has fallen since mid-October.
Although it is worth noting, my belief is that these threats have already been factored into the low rating of the FTSE company. Its forward earnings growth (PEG) ratio is just 0.5, just below the watermark for those that indicate a reduction in value.
As it also has a large London Stock Exchange dividend, I think Taylor Wimpey is an attractive value share to consider.
Britain’s housing market is coming back to life, boosted by recent interest rate cuts. New data from Rightmove has shown the property listing provider’s record “its the busiest Boxing day ever” last week with a new dealer job and field trip.
Although not guaranteed, further interest rate cuts have been suggested in 2025, which could boost consumer demand. Rightmove itself said it expects four times as many cuts in the new year.
City analysts expect Taylor Wimpey’s earnings to grow rapidly amid forecasts of a market recovery. It assumes that earnings will increase by 23% and 18% in 2025 and 2026, respectively, leading to forecast growth in the budget, too.
This means that next year’s yield has increased to 8.1%.
Admittedly, the dividend cover for the next two years is bad. But a strong balance sheet puts the builder in a good position to meet these near-term payment forecasts. The total was north of half a billion pounds – £584m, to be exact – as of June.
Foresight Solar Fund
Like homebuilders, renewable energy stocks like the Foresight Solar Fund have fallen in value in recent months.
In this case, fears about the green energy sector under the return of US President Donald Trump have disturbed investors. I consider this a great opportunity to buy a dip.
Along with their double-digit New Year’s dividend yield, Foresight shares also now boast a PEG ratio of 0.1. Furthermore, its corresponding price-to-earnings (P/E) ratio is just nine times.
It is possible that share prices could continue to fall if confidence in renewables continues to decline. Yet in practice, Trump’s policy is unlikely to affect Foresight’s day-to-day operations. All of FTSE 250 The company’s solar farms are located in Britain, Italy and Australia.
As the climate change crisis drives the demand for clean energy, it is my belief that share prices across the sector may recover significantly over time. Meanwhile, investors can enjoy the prospect of market-beating dividend income from investment trusts like this one.
Source link
