Having settled on a shortlist of candidates for a UK equity income portfolio using ideas from the Alpha dividend yield screen, the next task is to filter and weight the stocks in a workable portfolio. First, it’s important to reiterate some caveats.
For one, any selection biased towards a particular factor like income introduces concentration risk. In our case, we will be making calls on some cyclical industries which are major dividend payers at their peaks.
Because of this, we must try and balance equity risk with other assets. So, the big health warning is the list of shares below isn’t meant to be a standalone portfolio. You shouldn’t invest only in shares unless you are very comfortable with risk, especially a concentrated selection.