Want to retire early? I think these are 2 of the best UK shares with 5%+ dividends

Looking to get rich and retire early? These dirt-cheap dividend dynamos could help you do just that, explains Royston Wild.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Stock markets are in meltdown and many investors have seen their investment portfolios sink in value. You might be one of them. I am, but I’m not panicking. I still believe that the carefully-selected shares that I own will allow me to make big profits and possibly retire early.

The macroeconomic outlook is chilly at best, but significant downturns in the global economy are nothing new. Provided that you’ve selected your shares with due skill and attention then your investment portfolio should still generate some great returns for you.

Remember that the key to successful share investing is to buy shares with a view to holding them for five, 10, 20 years, perhaps more. These sort of timescales allow your investments to recover from temporary macroeconomic turbulence, and with a bit of luck generate some life-changing profits. Despite the threat posed by Covid-19 over the short-to-medium term, too, there remains an abundance of shares that could help you to retire early and/or realise your other goals.

Happy retired couple on a yacht

Want to retire early?

One of these stocks attracting my attention is Keller Group (LSE: KLR). It’s particularly great for those looking to squeeze every ounce of value out of their investments. At current prices around 660p per share it trades on a forward P/E ratio of 11 times and carries a meaty 5% dividend yield, too.

Keller Group could see business suffer in the near term as the global construction industry shrinks. However, the small cap — which describes itself as “the world’s largest geotechnical contractor” — can rely on the niche nature operations as well as its scale to help it navigate the worst that a slowing world economy will cause. It also has a £1bn-plus order book to help support it in the immediate future.

Keller could receive extra support from another source. The tough economic backdrop means that new infrastructure stimulus in some of its major regions like North America could be introduced. This could boost demand for its high-tech solutions. And I’m confident that it should ride the economic recovery when it eventually comes to huge success. It’s a great buy for anyone looking to retire early.

Another 5% dividend yield

Mears Group (LSE: MER) is another share that should navigate the global economic cooldown than most. Why? It provides a variety of services that we cannot do without irrespective of broader conditions.

But forget about its defensive characteristics for a second: the small cap’s expertise in social care and housing services put it in great shape to ride two significant phenomena in the years ahead. Increased social housing is needed to meet the growing population. And exploding demand for care services amid a rapidly-ageing population also bodes well for future profits.

I don’t think its excellent defensive characteristics nor its exceptional structural opportunities are reflected at current prices of 155p, though. Mears carries a forward P/E ratio of below 8 times. It boasts a chunky 5.2% dividend yield as well. This is a share that has all the tools to make its investors big returns and possibly retire early. And I think it’s brilliant buy for both dividend and value investors.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild 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.

More on Investing Articles

Investing Articles

These FTSE 100 shares could soar over the next year

FTSE 100 shares show strong potential as rate cuts loom. History shows stocks could gain more than 70% in the…

Read more »

Young Black woman using a debit card at an ATM to withdraw money
Investing Articles

“If I’d put £5,000 into Santander shares just 2 years ago, here’s what I’d have now”

Our writer considers whether he thinks Santander shares still look good value after a strong period for the global Spanish…

Read more »

Illustration of flames over a black background
Investing Articles

Could this FTSE 250 stock be the next Rolls-Royce?

With an ongoing probe into the motor finance industry, the share price of this member of the FTSE 250 has…

Read more »

Investing Articles

My 3 favourite FTSE dividend stocks give me a mind-blowing 9.82% yield!

Harvey Jones is surprised to learn that he owns the three highest-yielding dividend stocks on the FTSE 100. So is…

Read more »

Investing Articles

Following strong 2024 results, this 6.1%-yielding FTSE 100 gem looks a bargain to me

With good 2024 results delivered, and a buyback and dividend increase announced, this high-yielding FTSE 100 heavyweight looks very cheap…

Read more »

Investing Articles

I’m not surprised the IAG share price is surging, it’s the top-rated UK stock

The IAG share price is up 57% since the start of the year, but remains undervalued. This bull run could…

Read more »

Investing Articles

Is the stock market set for a crash in 2025?

Could antitrust lawsuits derail US tech stocks and cause a stock market crash next year? Stephen Wright thinks the risks…

Read more »

Investing Articles

As Rolls-Royce’s share price falls 8%, is it time for me to buy on the dip?

Rolls-Royce’s share price has dropped after a stellar rise this year. I think this leaves it looking even more discounted…

Read more »