We take a look at three dividend shares with strong income characteristics and yields that beat the benchmark FTSE 100 dividend yield of around 3.2%.
Our dividend shares for consideration include a UK equity trust, an exciting small-cap, and a FTSE 100 stalwart.
Dunedin Income Growth Investment Trust
The Dunedin Income Growth Investment Trust (DIGIT) offers an attractive proposition for income-focused investors seeking sustainable, growing dividends from UK equities.
DIGIT offers an attractive 6.5% dividend yield, substantially ahead of both cash rates and the FTSE All-Share Index. The trust is also targeting a 34% dividend increase next year.
The Trust boasts a 43-year track record of maintaining or growing its dividend, demonstrating resilient income delivery through multiple market cycles and periods of volatility. This could be particularly valuable given that global equities are trading near highs.
The Trust’s differentiated positioning includes 49% invested in sub-£10 billion companies and 17% in European holdings, providing investors with exposure beyond the mega-cap dominated FTSE All-Share.
Investors choosing the trust will benefit from a “triple discount”. Quality stocks are undervalued relative to the market, the UK market trades at a substantial discount to global equities, and the trust’s shares trade at a discount to net asset value.
Adsure Services
Aquis-listed Adsure Services has consistently increased its dividend since listing in 2023, and it yields 7.6% at the current share price of 25p.
The dividend is backed by recurring revenues from long-term contracts with government-funded organisations. Supporting its ability to increase dividends in the years to come is its ‘Fit for the Future’ strategic initiative that aims to drive underlying efficiencies through the deployment of cutting-edge technologies.
In addition to the deployment of new software to enhance the work of its internal audit operatives, the company is readying the launch of its proprietary ‘TIAA Insight’ AI tool designed to improve key utilisation metrics.
This promises to drive further expansion of Adsure’s EBITDA margin, which rose to 11.8% from 9.4% in the year ended 31 March 2025. EBITDA jumped 35% during this period.
This is a company to tuck away and await further growth.
BP
BP is an age-old income favourite. Yes, it’s involved in oil extraction that isn’t ESG-friendly, but BP’s scale and ongoing demand for fossil fuels will support earnings in the years to come.
It’s also an ‘ugly duckling’ of a stock that has detached from its intrinsic value and lags behind peers such as Shell in terms of valuation.
Recent results were unspectacular but reaffirmed its ability to generate cash as operating cash flow rose to $7.8bn in the third quarter. Lower oil prices presented a headwind during the period, and investors will be pleased to see OPEC+ taking measures to manage the supply glut, which has weighed on prices.
BP is streamlining its business through a series of divestments that will bolster the balance sheet and provide a strong base for future growth.
With a 5.2% dividend yield, BP offers both value and the potential for capital appreciation. The firm is also committed to share buybacks, announcing $750m in fresh purchases this week.
A worthy addition to any income portfolio.