I am always looking for top dividend shares to add to my portfolio. And, right now, I believe investors are spoilt for choice when it comes to finding income stocks.
Here are three companies I would buy today, all of which offer dividend yields of 6%, or more.
UK dividend shares
The first company on my list is the Gore Street Energy Storage Fund (LSE: GSF). With a dividend yield of just over 6%, at the time of writing, I think this company looks incredibly attractive as an income investment. It is also an excellent way for me to build exposure to the green energy industry.
Gore Street buys and builds energy storage facilities. The goal of these facilities is to stabilise the electricity supply through the peaks and troughs of renewable energy generation. The market for this energy storage capacity is only likely to increase as the country invests more and more in renewable energy.
Still, this is not a risk-free investment. The company has been using a lot of debt to fund its expansion. This could have an impact on profit margins if interest rates suddenly increase.
Mid-cap insurance group Sabre Insurance (LSE: SBRE) offers a dividend yield of around 6.3%, at the time of writing. The company helps consumers find car insurance and has been doing so for several decades. It owns a portfolio of well-known brands, although these only make up a relatively small share of the overall car insurance market.
The company’s smaller size is not a significant drawback. It can actually be beneficial, especially in a market where insurance rates are falling. In these weak markets, Sabre can pick and choose its customers to maximise profitability.
Despite this advantage, the company’s most considerable challenge is competition and the potential for additional regulations, which could hit profit margins.
Vodafone (LSE: VOD) is one of the most respected dividend stocks in the FTSE 100. That is why I would buy the telecommunications giant for my portfolio today as an income play. At the time of writing, the stock supports a dividend yield of 7%, which is more than double the market average.
I am optimistic about the company’s potential because its infrastructure network across Europe means it is one of the largest data-driven network providers. This is a strong competitive advantage in a world that is increasingly driven by data and data processing.
Cash flows from the organisation’s telecommunications business should more than cover its dividend as we advance, although I am worried about the company’s debt.
Vodafone’s debt levels have increased rapidly over the past 10 years, and management needs to focus on reducing borrowing, or it could jeopardise the group’s financial position.
Even after considering this risk, I think the company has attractive income credentials.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.