The ten FTSE 350 revenue shares with the very best yields are at present providing returns of 9.4%-14.1%, with a mean of 11.3%. This implies a £20,000 funding unfold equally throughout all of them would generate annual passive revenue of £2,260.

However reinvesting the dividends may generate higher long-term returns. Utilizing this method, a £20,000 lump sum would develop to £290,676 in 25 years.

This assumes the annual return of 11.3% is maintained all through the interval and that each one revenue is used to buy extra shares. If all goes to plan, after 1 / 4 of a century, this 10-stock portfolio might be producing dividends of £33,137 a yr.

Nevertheless, we should not get too carried away.

Purchaser beware

Though there’s nothing improper with the maths in my instance, it pays to watch out when a inventory gives an apparently excessive yield.

For instance, although Diversified Power Firm is prime of the checklist, it was yielding over 30% in early 2024. Quickly after, it minimize its dividend by two-thirds. Though it’s nonetheless primary, this does illustrate that double-digit returns ought to be handled with warning.

Some specialists declare that if a inventory’s providing a return twice that of the 10-year gilt fee (at present 4.45%), it’s most likely not sustainable. In actual fact, all the shares on my checklist would break this rule of thumb.

Additionally, my analysis ignores any actions (up or down) in share costs.

One thing in frequent

I feel it’s fascinating that seven of the shares have publicity to the vitality sector.

A few of them function in renewables the place long-term contracts and comparatively fastened prices guarantee earnings are, usually talking, regular and predictable.

Nevertheless, this doesn’t apply to Harbour Power (LSE:HBR). As the biggest oil and gasoline producer within the North Sea, its revenue is on the mercy of vitality costs, which are sometimes risky.

And its near-13% yield is partly because of a share price that, on the again of a droop in oil costs, has fallen 43% since Could 2024.

Different points

I believe traders even have issues that the group faces an efficient tax fee of 78% on its UK revenue. That’s why, in 2024, it acquired the upstream belongings of Wintershall Dea.

Though it hasn’t helped the share price, the deal has reworked the size of the group. That is evident from Harbour Power’s most up-to-date buying and selling replace. For the primary quarter of 2025, income was $2.8bn, in comparison with $0.9bn a yr earlier.

The acquisition means it’s now working in Norway — and different nations — the place taxes are decrease.

On 7 Could, the group blamed the ‘windfall tax’ for its resolution to chop 25% of the workforce at its headquarters in Aberdeen.

And these value financial savings are anticipated to offset among the influence of decrease vitality costs. This implies free money movement, in 2025, is forecast to be solely $100m decrease than the $1bn beforehand estimated. The annual dividend at present prices $455m.

Earnings also needs to be helped by an upwards revision in forecast manufacturing.

For these causes, I believe Harbour Power’s yield will begin to fall over the approaching months. Not due to a minimize in its dividend however because of a rising share price. On this foundation, these on the lookout for an revenue share with strong development prospects may contemplate the inventory.