3 of the best dividend shares I’d buy with yields over 6%

Our writer highlights three high-yielding FTSE 350 dividend shares he’d pick for reliable income and potential capital gains.

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In my income portfolio, I aim to generate an overall dividend yield that’s comfortably above the FTSE 100 average of 3.6%. Right now, I’m targeting 5%, or more. Fortunately, the UK stock market has a well-deserved reputation for offering generous dividends.

Here, I’m going to look at three stocks with yields of 6% or more that I really like at the moment.

This cash machine could still be cheap

FTSE 100 tobacco stock Imperial Brands (LSE: IMB) has gained nearly 30% so far this year. Investors seem to be buying into the turnaround that’s taking place under chief executive Stefan Bomhard.

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Created with Highcharts 11.4.3Imperial Brands Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The shares aren’t quite as cheap as they were. But I reckon Imperial’s 6.7% yield and strong cash flow support the current share price and leave room for further gains.

By refocusing the business on its best brands and controlling spending, Bomhard’s cut debt and returned the business to earnings growth. Dividend growth’s expected to be around 5% in both the 2025 and 2026 financial years.

Admittedly, tobacco shares aren’t everyone’s cup of tea. Investors may also want to consider the long-term future of this business. But with underlying sales of more than £9bn a year and annual profits of around £2.5bn, I think Imperial still offers good potential as an investment to consider.

A low-risk 7% yield?

As the UK’s largest general insurer, Aviva‘s (LSE: AV) a household name for products such as home and motor insurance. The group also has similar operations in Canada and Ireland, along with a complementary asset management business.

I admit that Aviva’s record of dividend growth’s been patchy in the past. There were cuts in 2013 and 2020, for instance. However, I think that changes made by CEO Amanda Blanc mean this is now a stronger and more efficient business.

Operating profit rose by 9% to £1.5bn last year and the dividend was covered two times by cash generation.

Created with Highcharts 11.4.3Aviva Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Aviva shares currently offer a forecast yield of 7.4%. The payout ‘s expected to rise by 6% this year, implying an expected return of more than 13%.

I think the shares look decent value. If I didn’t already own a UK insurer, I’d probably add Aviva to my portfolio.

A turning point?

Television group ITV (LSE: ITV) has been out of favour with investors for a long time. But I think the business may have reached a turning point. Advertising spending is starting to recover, according to the company’s half-year results.

Meanwhile, the content production slump caused by the Hollywood strikes and broader spending cuts is now starting to move into the rear-view mirror. I think the ITV Studios business should benefit.

Created with Highcharts 11.4.3ITV PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Reassuringly, ITV’s maintained its double-digit profit margins and strong cash generation. Analysts expect adjusted earnings to rise 18% to 9.2p per share this year, as a recovery continues. That’s enough profit to cover the 5p per share dividend comfortably.

These forecasts price the stock on a forward price-to-earnings ratio of nine, with a tempting 6.4% yield.

While I own some of its shares, ITV isn’t a stock I plan to hold forever. But right now, I’m holding on tight. I believe the shares could perform well over the next 12-18 months.

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Roland Head has positions in ITV and Imperial Brands Plc. The Motley Fool UK has recommended ITV and Imperial Brands Plc. 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.

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