I’ve been eyeing Authorized & Basic (LSE: LGEN) shares as a possible addition to my portfolio for some time. Has my hesitation value me? Sure and no. The Authorized & Basic share price has gone exactly nowhere over the previous 12 months, falling by lower than 0.1% over these 12 months.

However sitting on the sidelines means I don’t get any dividends from the FTSE 100 monetary providers powerhouse.

Provided that it presently presents a 9.1% dividend yield – over two-and-a-half occasions the FTSE 100 common – that potential passive revenue grabs my consideration.

Sturdy enterprise, restricted progress ranges

Let’s begin with the share price.

Whereas it has finished nothing previously 12 months, that solely tells a part of the story. Over 5 years, it’s up 20%.

That’s strong, however is flattered by the the half-decade beginning when the market was nonetheless weak within the early phases of the pandemic. The broader FTSE 100 has risen 47% throughout these 5 years, so Authorized and Basic considerably underperformed the flagship index.

I additionally see restricted apparent drivers that I might anticipate to spice up the Authorized & Basic share price in coming years.

It has a well-proven enterprise mannequin, massive buyer base and operates in a market that has excessive, resilient long-term demand. All of these issues I see as strengths.

However, the corporate’s income have been markedly weaker over the previous a number of years. Final 12 months was the third in a row of falling web revenue. At £191m, it was lower than a tenth of what it had been three years earlier than.

In the meantime, promoting a big US enterprise will take away that as a attainable future income or earnings. On the upside although, it ought to generate money that may fund a share buyback.

I’m typically not an enormous fan of buybacks as an investor and would like a particular dividend. Relying on the price paid although, a buyback can increase earnings per share and assist justify a better share price.

On stability, I might not purchase Authorized & Basic shares for my portfolio proper now based mostly solely on the share price progress prospects.

Excessive-yield, however with dangers

Might the dividend be sufficient to influence me to dive in?

I do assume the inventory is enticing. There has solely been one 12 months because the 2008 monetary disaster that didn’t see Authorized & Basic elevating its dividend per share. It has introduced plans to chop that progress to 2% a 12 months versus 5% in recent times – however that’s nonetheless progress.

With the yield already standing at over 9%, I discover that a gorgeous proposition.

Nonetheless, dividends are by no means assured. Authorized & Basic lower its payout per share in the course of the monetary disaster and if we see one other sharp fall within the markets main policyholders to drag out cash, there’s a danger of one other dividend lower.

I reckon there are probably some nice high-yield shares with robust price progress potential in right this moment’s market.

Though I like its yield, the Authorized & Basic share price progress potential as I see it proper now doesn’t inspire me sufficient to take a position.