High Yield Defensive Stocks

MonroeM

I have a relatively small proportion of my portfolio in cash from a recent pension transfer into a SIPP. I decided I wanted to invest this money into some relatively high yield defensive stocks (3/4 different shares) with some potential for growth.
As an example, several weeks ago I invested in Legal & General at 180.00 and it now stands at 232.00 but also has a yield of 7.5% so it seems to fit in with my requirements. Just recently I also added GSK at 1440.00 so in my view it has growth potential and also a decent yield of 5.6%.
These investments are for the long term so any share price fluctuation or volatility does not particularly matter as long as the yield is fairly reliable. At this stage any yield will not be taken as income so all dividends will be reinvested.
I am still looking for another one or two stocks into to invest in so I am very open to any opinions or suggestions to any shares that fit this criteria? Thank you.

Apodemus

I guess "defensive" means different things to different people and in my mind "defensive" and "high yield" are unlikely to go together.  L&G or GSK should have scope for growth and should provide stable, reliable dividends, but if the stock market collapsed they would drop, too.  My use of the term "defensive" would be for stocks that held up better during any stock market collapse, probably acting more like Bonds, which tends to mean lower yields and less scope for growth in a rising market.   I think that the most defensive stock I currently have, is Ruffer (Lon:RICA), which has low yield and low growth but have the aim "not to lose money in any 12 month period, and to grow the value of our investors’ wealth over the long haul", which means a bias to very safe assets and inflation linked Gilts.

MonroeM

Point taken and I totally agree with your comment. I should have clarified that I won’t be needing this sum of money anytime soon hence it will be invested for the long term. Therefore, I am happy for this part of my portfolio to be invested in equities but those in my opinion with a relatively defensive quality. I already have wealth preservation funds/IT’s in other parts of my portfolio.

ColdIron

If holding this for the long term and not taking an income why do you want high yield? I would be focussing on total return. High yield companies, even with dividends reinvested, often have lower prospects for growth. Don't confuse high yield with high total return. If building a long term growth portfolio I would be more inclined to filter out higher yielding stock than concentrate on them. What would you rather hold, a dinosaur like British American Tobacco or Amazon who have never paid a dividend?

EdGasketTheSecond

Supermarkets, SBRY, MRW, TSCO

Thrugelmir

GSK hasn't increased it's dividend in approaching 5 years. Once in a while opportunties present themselves. Doesn't make high investing in yield shares the ideal strategy though. 

dunstonh

I have a relatively small proportion of my portfolio in cash from a recent pension transfer into a SIPP. I decided I wanted to invest this money into some relatively high yield defensive stocks (3/4 different shares) with some potential for growth.

Single company shares increases risk.   Having only 3-4 shares increases the risk.

HYP went out of fashion in the credit crunch as it failed abysmally during that period.   So, what is it about that strategy that makes you think it is both lower risk and likely to give better returns relative to the risk?

MonroeM

ColdIron said:

If holding this for the long term and not taking an income why do you want high yield? I would be focussing on total return. High yield companies, even with dividends reinvested, often have lower prospects for growth. Don't confuse high yield with high total return. If building a long term growth portfolio I would be more inclined to filter out higher yielding stock than concentrate on them. What would you rather hold, a dinosaur like British American Tobacco or Amazon who have never paid a dividend?

I totally agree that my main focus should be on total return. However, The rest of my portfolio consists of growth funds/IT’s and also some wealth preservation funds. Therefore, with this smaller part of my portfolio I am happy to select some shares for yield and hopefully some growth in the future. I could chose a UK Equity Income fund or IT but decided I am happy with the risk involved in selecting a few individual shares.

MPN

I have M&G and Vodafone on my radar. 

Another_Saver

NG and UU?

itwasntme001

I own National Grid.  Pretty safe dividend paying stock.  Fits well into my portfolio.