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5 Index-beating Dividend Shares To Consider For An Isa This August

How much passive income are you earning from your Stocks and Shares ISA?

The FTSE 100 currently yields 3.0%. Compared to leading US indices that may seem attractive, but it is still not spectacular.

The FTSE 250 is a bit better at 3.4% but, again, that is not necessarily the sort of yield to get too excited about.

Fortunately, many individual shares thrash the index when it comes to their yield. Here are five that I see as worth considering for an ISA this month!

High-yield hunting in the FTSE 250

For starters, Greencoat UK Wind with its very lucrative 9.6% yield.

This week, the company announced its current year dividend target: a 13^th consecutive year of growth in the payout per share.

Uncertainty about energy policy and also tax treatment of renewable energy are risks.

But I think the share price â down a fifth over the past five years â already reflects the risks this cash generative FTSE 250 company faces.

A couple of FTSE 100 financial services firms

A few FTSE 100 firms in the financial services sector continue to offer yields that are double that indexâs yield â or even better.

One is Standard Life, with its 6.0% yield. The companyâs focus on retirement savings and pensions means customer demand is resilient.

The firm also benefits from a large customer base, though one risk I see is that any serious property market downturn could force Standard Life to write down some valuations in its mortgage book, hurting earnings.

Aberdeen Group also offers a 6.0% yield. A rocky few years underline the ongoing risk of investors pulling money from its funds, hurting profits.

But the well-established company seems to be on the front foot again. This week, it announced that net capital generation for the first half grew 47% year-on-year.

Index-beating yield and growth prospects

At 4.7%, FTSE 250 leisure site operator Hollywood Bowl is markedly more lucrative than its index.

Last year saw its dividend grow for the first time in several years. This year the interim dividend increased by over 10%.

I think the proven business model could fund further dividend increases. It also offers ongoing growth prospects both in the companyâs home UK market and in its Canadian operations.

Managing international expansion as a medium-sized businesses carries risks, from exchange rate fluctuations to management distraction.

But I see this as a well-run, cash generative business with ongoing growth potential.

Well-known brand owner at attractive valuation

One FTSE 100 share I think looks cheap after falling 9% in the past five years (when the index grew 56%) is Reckitt Benckiser (LSE: RKT).

Not only does the share price strike me as attractive, so too does the consumer goods companyâs 4.1% yield.

Reckittâs share price fall reflects multiple problems. Its nutrition business has been a big one, though that now seems to be on a more even keel than before. Variable performance remains a risk, though, as do historical product liability claims elsewhere in Reckittâs sprawling business.

But strong brands like Dettol and Nurofen give the business pricing power. Hopefully that can help it offset cost inflation.

Its global distribution system offers wide reach and economies of scale. This week, Reckitt announced a 5% increase in its interim dividend per share.

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Christopher Ruane owns shares in Reckitt Benckiser.

The post 5 index-beating dividend shares to consider for an ISA this August appeared first on The Twelfth Magpie.

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