Traders not often get an opportunity to purchase shares with 9% dividend yields the place the enterprise is on the up. However this is perhaps the case with B&M European Retail Worth (LSE:BME) proper now.

The corporate has fallen out of the FTSE 100 after a disappointing couple of years. However the newest indicators are optimistic, so might this be an enormous passive revenue alternative?

What’s been going flawed?

Within the 52 weeks main up to March, B&M’s whole revenues grew from 3.7% to £5.6bn. That doesn’t sound too unhealthy, however there’s much more occurring beneath the floor.

The difficulty is, this was nearly solely the results of opening new shops. Adjusting for this, outcomes have been poor – particularly within the UK, the place gross sales fell 3.6%. 

With the UK accounting for round 80% of whole gross sales, that’s alarming. The headline quantity may not look too unhealthy, however a dive into the main points provides a way more worrying image.

B&M does have ongoing plans to maintain increasing its retailer rely. However it gained’t be capable to do that eternally – eventually, particular person shops are going to have to start out performing higher.

Indicators of a restoration

Regardless of this, the inventory has climbed 30% from its 52-week lows. And a giant cause for that was the corporate’s replace for the three months main up to the tip of March.

Throughout this era, B&M’s like-for-like UK gross sales fell 2.4%. That’s nonetheless not good (or anyplace close to good) however the market reacted positively and it’s simple to see why.

Over the past three quarters, this metric has began transferring in the correct path once more. The earlier report introduced a 2.8% decline and the common for the 12 months was a 3.1% drop.

There’s an extended strategy to go, which is why the inventory remains to be 40% decrease than the place it was at the beginning of 2024. However the slowing decline in like-for-like gross sales is undeniably a optimistic signal.

Dividends

A falling share price has pushed the dividend yield on B&M shares to some eye-catching ranges. The headline is round 4.6%, which in all probability counts as attention-grabbing with out being spectacular.

Once more although, there’s extra to the corporate than meets the attention. On prime of its common dividend B&M has additionally paid a particular distribution every year since 2020.

That quantity has fluctuated – and the weak latest efficiency meant it fell in 2025. However even accounting for this, it’s nonetheless about the identical as the complete common dividend for the 12 months. 

If this continues, traders who purchase the inventory immediately might get round 9% of their funding again in money every year. And there aren’t many locations providing that form of return proper now.

Is the worst over?

B&M shares are an attention-grabbing proposition proper now. Again when like-for-like gross sales declines have been accelerating, I believed that purchasing the inventory was very dangerous. 

The final 12 months have in all probability vindicated that view. And whereas there’s a danger issues might deteriorate additional, the indicators are encouraging.

The inventory is perhaps 30% larger than its lows already, but when the corporate is thru the worst, a 9% yield could possibly be a fantastic alternative. I believe it’s undoubtedly one for dividend traders to think about.