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Summary
- Investing in dividend stocks remains one of the best ways to counter unprecedented times
- VCTs not only provide access to the venture capital investment to the individual investors but have been a source of good dividend income
In order to make money off the stock markets, investing in dividend stocks remains one of the best ways, especially during unprecedented times like Covid-19 pandemic. Investing in dividend stocks helps in creating a buffer during economic downturns when stocks are providing a negative return.
Research suggests that companies which yield high dividends have delivered higher returns as compared to non-dividend stocks. In the United Kingdom, closed-ended fund which is publicly listed are known as VCT (Venture Capital Trust). They not only provide access to venture capital investment to individual investors but have been a source of good dividend income. With this focus, let’s have a look at the top dividend yielding VCT stocks on LSE.
- Seneca Growth Capital VCT PLC (LON:HYG)
Established in 2001, Seneca is a UK-based generalist venture capital trust (VCT) that focuses on providing shareholders with attractive returns from a diverse portfolio of both private and AIM quoted growth capital investments.
Despite the unprecedented circumstances faced by the company due to the global pandemic, the total return for each share class (the B share and Ordinary share) increased by 1.8 per cent and 15.5 per cent Y-o-Y to 97.8 pence and 95.5 pence, respectively, during the year ended 31 December 2020. The company also announced to pay 1.5 pence per B Share as the interim dividend for the FY 2020.
The annual dividend yield recorded by the company was 77.6 per cent. The shares of HYG last traded at GBX 33.50 on 17 March. The stocks of the company have given a 52.27 per cent return on price on a yearly basis, with the market capitalisation standing at £2.72 million.
- Mobeus Income & Growth 2 VCT PLC (LON:MIG)
Incorporated in 2000, Mobeus Income & Growth 2 VCT PLC aims at providing its investors with a regular income stream through tax-free dividends. It is engaged in generating capital growth through a portfolio.
The company witnessed a surge in the Net Asset Value (NAV) per share by 10.1 per cent or 7.97 pence to 87.22 pence in the quarter ended on 31 December 2020 from 79.25 pence in the same period the previous year. The major factors driving the increase were gains in realisations and a rise in unrealised portfolio valuations.
The annual dividend yield recorded by the company was 45.5 per cent. The shares of MIG last traded at GBX 83.50 on 17 March. The stocks of the company have given a 9.87 per cent return on price on a yearly basis, with the market capitalisation standing at £61.15 million.
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Oxford Technology 4 Venture Capital Trust PLC (LON:OXF)
The Oxford Technology VCTs were established in 1995 by the UK Government with the objective to encourage individuals to invest in UK smaller companies.
As per the Q3 results published by the company for the three months ended 30 November 2020, the unaudited net asset value per ordinary share was recorded as 28.8 pence, remaining unchanged as compared to the previous quarter. The company’s total return to shareholders remained at 76.8 pence per share.
The annual dividend yield recorded by the company was 27.8 per cent. The shares of OXF last traded at GBX 18.00 on 17 March. The stocks of the company provided a 32.08 per cent return on price on a YTD basis, with the market capitalisation standing at £2.07 million.
Triple Point VCT 2011 PLC (LON:TPON)
Established in July 2010, Triple Point is a UK-based Venture Capital Trust which aims at funding small and medium sized enterprises.
As on 30 November 2020, the NAV per share for A shares and B shares were recorded at 52.13 pence per share and 96.84 pence per share, respectively. The total dividends paid by the company for the six months ended 31 August 2020 for A shares, and B shares were 70.00 pence and 10.00 pence, respectively.
The annual dividend yield recorded by the company was 27.3 per cent. The shares of TPON last trading at GBX 88.50 on 17 March. The stocks of the company provided a 7.81 per cent negative return on price on a yearly basis, with the market capitalisation standing at £15.29 million.
