Core operations

I’m talking about Chesnara (LSE:CSN). The firm is a life insurance, pensions and investment business operating across the UK, Sweden and the Netherlands. The stock is up 24% in the past year, with a current dividend yield of 7.09%.

Rather than chasing rapid growth through selling large amounts of new insurance policies, its speciality is buying closed life and pension books from larger insurers. Once acquired, it manages these policies efficiently, extracting value from cash flows that can stretch over decades.

That business model helps explain why investors have become increasingly interested in the shares over the past year. The company has been executing a series of acquisitions that are expected to boost future cash generation. The purchase of HSBC Life UK, now renamed Chesnara Life, has significantly increased scale. It also recently bought Scottish Widows, which adds another large portfolio expected to produce substantial lifetime cash flows.

Capital growth and income

If the acquisitions help to explain some of the move higher in the share price, the generous income can be put down to the financial performance. In 2025, operating capital generation rose strongly, adjusted operating profit increased by more than 40%, and the group’s solvency position strengthened materially. The solvency coverage ratio ended the year at 257%, far above management’s normal operating range of 140%–160%. The boost in cash enables more to be paid out to shareholders.

In terms of dividend sustainability, I can point out that the company has increased its dividend for 21 consecutive years. Over the past five years, cash generation has covered dividend payments by around 1.45 times on average. This is a good metric to consider when trying to forecast whether the dividends can keep being paid to a similar level. Of course, past performance doesn’t guarantee future returns. But stocks with a strong track record are more appealing to me than others that are less proven.

Tempering the optimism

Of course, no dividend is risk-free. Chesnara’s acquisition-led strategy creates execution risk. What I mean by this is that if it buys a company but doesn’t integrate it well into existing operations, it could get messy and costly. Further, regulatory changes affecting life insurers could also reduce profitability, and this is always a risk for the sector.

Yet even with these points, I do think it looks like an attractive purchase for my portfolio and am seriously thinking about adding it. For investors who also want a balance of growth and income potential, it’s a company that could be considered.

Should you invest £5,000 in Chesnara Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Chesnara Plc made the list?

Jon Smith has no positions in the shares mentioned.

The post This growth share is up 24% AND has a dividend yield of over 7% appeared first on The Twelfth Magpie.

Three UK dividend shares have recently grabbed my eye: M&G (LSE:MNG), Chesnara (LSE:CSN), and Octopus Renewables Infrastructure Trust (LSE:ORIT). The reason? Each of their dividend yields for 2026 sits well above 6%.

If City forecasts are correct, a £20k ISA investment spread across all three will provide a £1,580 passive income to enjoy. I’m confident their dividends will rise steadily over time as well, providing an even-juicier income for investors to reinvest or live off.

Want to know why? Read on.

A FTSE 100 hero

The yield on M&G shares is an enormous 7.4%. And the firm’s raised dividends consistently since it listed on London’s stock market seven years ago.

This reflects M&G’s brilliant cash generation, underpinned by its fee-producing asset management arm and life insurance book. This means it enjoys strong capital reserves it can use to fund dividends even if earnings lumpiness sets in. As of December, its Solvency II ratio was 242%, the strongest in the sector.

So what could deliver long-term dividend growth at M&G? I’m personally confident that peoples’ rising interest in financial planning and a growing elderly population will deliver increasingly strong cash flows. Be mindful that fierce competition could impact future earnings, though.

Another cash machine

At current prices, the dividend yield on Chesnara shares is 6.7%. What’s more, it also has an impressive record of dividend growth, with cash payouts increasing each year since 2004. Incidentally, that’s also when it listed on the London Stock Exchange.

Like M&G, Chesnara’s operations are capital light, giving it more cash to return to shareholders instead of having to reinvest in the business. Its purpose is to purchase and operate life insurance and pensions policies, and to collect a steady flow of cash until they expire. Perfect for dividends, right?

On the downside, Chesnara’s future profits and dividends could suffer if opportunities to acquire fresh policies dry up. It’s a risk, though in my view it’s a remote one, given the favourable demographic trends coming its way.

A 9.7% income opportunity?

Octopus Renewables Infrastructure Trust packs the highest yield of all these passive income stocks. This is 9.7%, more than three times the FTSE 100 average of 3%. Payouts have risen for five straight years.

Dividends from renewable energy stocks can be volatile for reasons out of their control. More specifically, when the sun doesn’t shine or the wind is calm, power generation can slump, hitting earnings.

But Octopus’ diversified business model significantly eliminates this threat. Its operates solar farms and wind farms — both on- and off-shore in terms of the latter — and its assets are spread across Europe, from Finland and France, to the UK, Ireland, and Germany.

The trust’s essential operations allow it to funnel a steady flow of dividends to its investors. I’m confident they’ll grow over time, too, as demand for clean energy heats up.

Should you invest £5,000 in Chesnara Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Chesnara Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post 3 passive income stocks that could deliver ISA dividends of £1,580 appeared first on The Twelfth Magpie.

The reason? Over the last year, the Footsie’s soared in value, pulling yields lower across the index. As a result, forward yields are now:

• 3.1% for the FTSE 100.
• 3.4% for the FTSE 250.

Chesnara‘s (LSE:CSN) a top stock outside the FTSE 100 that’s (in my view) too good to ignore. It has a forward dividend yield above 7% for 2026, meaning a £20,000 lump sum here could generate an £1,460 passive income this year. Over the next three years it might deliver a total income of almost £5,000!

Here’s why I think this dividend hero merits serious consideration.

Cash hero

Chesnara’s a cash machine. And with limited growth potential, it chooses to use its formidable flows mainly to pay dividends. The result? A dividend yield that’s averaged 8.4% during the past 10 years.

Chesnara’s share price has surged over the last year, pulling the yield below those levels. But at 7.3%, its forward-looking yield remains more than double the FTSE 100 and FTSE 250 averages.

Chesnara collects cash from in-force life and pension policies that gradually run off over time. These are relatively predictable and long-dated, providing critical cash flow and earnings resilience and predictability. It’s allowed the company to grow annual dividends for 21 years on the spin.

Total dividend per share has increased by 119% since 2004 to 22.50p per share

– Chesnara 2025 annual report

Importantly, Chesnara also has considerable capital reserves it can use to support dividends if it encounters turbulence. Following recent acquisitions, its solvency coverage ratio (on a pro-forma basis) is 173%, well above its operating target of 140%-160%.

A 7.8% opportunity?

So what are the risks of buying Chesnara shares for dividends? Well financial market volatility could affect the amount if surplus cash it generates, and consequently the size of shareholder payouts. However, by investing cautiously and closely matching its assets to long-term policy liabilities, it’s managed to so far avoid this trap. I’m confident this will continue.

City analysts are expecting dividends to keep rising through to the end of 2028 at least. As a consequence, Chesnara’s dividend yield improves from 7.3% in 2026 to 7.6% this year, and again to 7.8% this year.

It means a £20,000 investment in a Stocks and Shares ISA today could — with dividends reinvested — generate a huge £4,892 passive income over the next three years alone.

And I’m optimistic Chesnara will remain one of the FTSE 250’s best dividend payers over the longer term. Analysts at RBC note that acquisition activity “increase [its] dividend runway to > 10 years” through its enhanced cash flows. I also expect dividends to grow steadily, as ageing populations across its European markets boosts life and pension market growth.

Should you invest £5,000 in Chesnara Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Chesnara Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post This FTSE 250 share might deliver a £4,892 ISA over 3 years! appeared first on The Twelfth Magpie.

Here are two that deserve a closer look in May, according to the pros.

1. Chesnara: 21 years of rising dividends

Chesnara (LSE:CSN) is a specialist life assurance business that acquires and manages closed life insurance and pension books across the UK, Sweden, and the Netherlands.

It isn’t a flashy business. But boring can be lucrative when it comes to income investing.

The model’s remarkably straightforward. Chesnara buys legacy life insurance portfolios that larger insurers no longer want to run, extracts the cash flows embedded within them, and returns that capital to shareholders. The result? Twenty-one consecutive years of rising dividends that have paved the way to an impressive 7.2% yield.

This phenomenal performance stems from the group’s structural growth engine. As Chesnara extracts value from its existing portfolio, the cash generated funds the search for the next acquisition. And with an ageing population across the UK and Europe, the supply of closed life insurance books is only getting larger.

Each new deal adds another layer of predictable, long-duration cash flows to the pile – exactly the kind of compounding income machine that patient investors dream about.

So what could go wrong? Chesnara’s dividend isn’t comfortably covered by earnings, and the company recently reported a negative return on equity. If investment returns on its insurance portfolios disappoint, or if acquisition opportunities dry up, the income stream could come under pressure.

That said, with nearly two decades of unbroken dividend growth, management’s navigated tougher environments than this before.

2. Ashmore: an emerging markets income play

Ashmore Group (LSE:ASHM) is another specialist financial group, this time focused on asset management within the emerging market sector. It manages a long list of funds across multiple asset classes like fixed income, equity, and multi-asset strategies for institutional clients worldwide.

The excitement around this one comes from a significant upgrade. In February, Jefferies’ analyst Laura Gris Trillo upgraded Ashmore from Hold to Buy and more than doubled their price target to 285p, citing a “turning point” in the emerging market cycle as a key catalyst.

For income investors, a 7.8% yield backed by that kind of institutional conviction is hard to ignore.

However, it’s a divided picture. Other institutional analysts, like the team at Morgan Stanley maintains an Underweight rating at 208p, arguing that the recovery in emerging markets may be slower and less linear than Jefferies expects.

Whether the emerging market cycle has truly turned, or whether patience is still required, is the central question for investors considering this income stock today.

The bottom line

Two very different businesses, but both offer yields well above the market average alongside genuine institutional backing.

Personally, Chesnara’s track record of dividend consistency gives it the edge, in my eyes. But for income seekers willing to take on a little more cyclical risk, Ashmore’s 7.8% yield and a potential recovery tailwind could make for a compelling combination to investigate deeper.

The post Expert recommendations: 2 top income stocks yielding 7%+! appeared first on The Twelfth Magpie.

The FTSE 250 is a great place to find growth shares, and this has a useful knock-on effect, as dividends often rise sharply alongside earnings. Take Chesnara (LSE:CSN), Rathbones (LSE:RAT), and Cranswick (LSE:CWK).

Collectively, their annual dividends have risen for an impressive 72 straight years. But what makes them such excellent profit and dividend generators?

Chesnara – 21 years of growth

Many dividend growth stocks maintain their progressive records by delivering low payouts relative to earnings. This isn’t the case with Chesnara, which has consistently offered dividend yields above 6%. For this year, the yield is an enormous 7.6%.

Put simply, the company is a cash machine. It’s a life insurance and pensions consolidator that buys existing policies that steadily expire over time. The advantage? Cash is released as policies run off, while Chesnara’s capital expenditure is very low.

It’s a strong combination for large and growing dividends. This doesn’t guarantee passive income, though — cash generation is influenced by the performance of its investment portfolio. But Chesnara’s strong capital reserves provide a buffer against this threat. Its Solvency II ratio’s a gigantic 257%.

Rathbones – 16 years of growth

Like other wealth managers, Rathbones earns fees for supervising customers’ assets under management (AUM). This steady stream of income is largely predictable, giving the firm the means and the confidence to reliably raise dividends.

That’s not all. Financial markets typically rise over the long term, leading to AUM growth and greater fee income over time. Accordingly, annual dividends have risen consistently for more than a decade and a half. Following its tie-up with Investec Wealth & Investment in 2024, it has considerably increased its scale and in turn its earnings and dividend potential.

Bear in mind that market competition is fierce and could impact future returns. The dividend yield here is 5.1%.

Cranswick – 35 years of growth

Food producer Cranswick comfortably takes the FTSE 250 crown when it comes to dividend growth. With 35 years of consecutive increases, no other share on the index comes close.

That reliability reflects Cranswick’s focus on a massive defensive industry. We all need to eat even when times get tough. What’s more, the business has relationships with almost all the UK’s largest supermarket chains including Tesco, Sainsbury’s, Aldi, and Marks & Spencer. This gives it exposure to a wider base of consumers, and means it’s not reliant upon one retailer to drive sales.

Despite its defensive market, there are risks here. For instance, a focus on meat products leaves it vulnerable to changing consumer tastes. Yet, on balance, I think it’s still a rock-solid dividend share to consider. The dividend yield for this year is 2.2%.

The post 72 years of dividend growth! 3 FTSE 250 shares to target income appeared first on The Twelfth Magpie.

Putting the money to work

With £10k in savings, it provides a good initial pot of cash to put to work. To begin with, I’d look at what yield the investor is trying to target. After all, the £10k is likely only earning 2%-3% annual interest in a regular savings account. Therefore, the added risk of buying stocks (where the capital can fluctuate in value every day) must be offset by a higher reward.

The average dividend yield of the FTSE 100 is 2.99% so I don’t think it makes sense to invest in a tracker. Instead, an investor could actively pick a selection of stocks in the 6%-8% range. The potential income is high enough to warrant withdrawing funds from savings and investing them in the market.

The next factor is assessing how long it could take to reach the goal of £455 a month in dividends. If only the initial £10k were used and no further money were injected, it could take 30 years, with an average yield of 7%. That’s a long time! However, if an investor could supplement the lump sum with £250 each month, it could take just under 12 years.

Of course, there’s no guarantee on these timeframes. The hot income stock of today could struggle years down the line, cutting the dividend. That’s why it’s good to have a diversified portfolio, so at least if this does happen, the impact can be manageable.

Boosting dividend payments

Actively picking good dividend shares in the 6%-8% yield range needs some research. One example to consider that I’ve researched is Chesnara (LSE:CSN). It has a current dividend yield of 7.2%, with the share price up 30% in the last year.

The FTSE 250 company isn’t the most traditional insurance and pensions firm, as it focuses on buying and managing existing life insurance and pension policies. It earns fees from administering these policies and profits from managing the investments backing them.

Its CEO said in the interim results in August that it saw “cash generation up 26%, an increase in our solvency ratio and a further 3% increase in the interim dividend”. Further, in December, it got regulatory approval for the takeover of HSBC’s UK life insurance division. This has boosted investor sentiment already, but could help even further as more details about the extra £4bn of assets under administration and 454,000 policies come through.

Against this backdrop, the dividend per share has been rising for several consecutive years. I can see this continuing based on the momentum from last year. However, one risk is that the stock market underperforms this year, leading to volatility in the assets Chesnara manages. This could not only hurt earnings but also cause reputational damage for clients who have their money with the firm.

Overall though, I think it’s a good stock for investors to consider as part of an overall strategy.

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Long-term office deals

First, let’s consider Derwent London (LSE:DLN). It’s a UK-listed real estate investment trust (REIT) specialising in commercial office property in central London. Interestingly, the company adopts a regeneration-led strategy. This means it acquires underutilised buildings and enhances their value through redevelopment and refurbishment.

The current dividend yield is 4.9%, with 25 years of consecutive dividend growth. However, the 30% fall in the share price over the past year needs to be addressed. Part of this is due to weaker sentiment in the market, as hybrid working trends reduce demand for office space and undermine long-term lease renewals. It’s also to do with concerns that interest rates will stay higher for longer. Given the amount of debt the company needs to finance new projects, it’ll increase overall costs going forward.

Despite this, the track record of income shows me it’s a clear priority for the management team. As a REIT, it must pay out a large portion of its earnings as dividends to maintain favourable tax treatment. The dividend cover is 1.5, meaning that the current earnings per share more than covers the paid out dividend.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

At a business level, I see revenue from rental income increasing in the coming year as many firms pivot back to working from offices. It also benefits from its diversified, high-quality tenant base, which is unlikely to dramatically reduce occupancy suddenly.

A niche insurance operator

A second stock is Chesnara (LSE:CSN). The stock is up 23% over the last year, with a dividend yield of 7.82%. It has paid out a constant dividend for two decades.

The company is a life insurance and pensions consolidator. In simple terms, it buys and manages closed books of life insurance and pension policies from other insurers that no longer want to run them. By taking on these portfolios, Chesnara earns steady, predictable cash flows from the premiums and investment returns linked to those policies. This is one reason why it has been a reliable dividend payer for so long.

Going forward, I don’t see this changing. It’s true that growth is modest. But at the same time, the company prioritises paying out to shareholders. Evidence of this can be seen from the dividends that have been maintained or increased steadily over the years. In essence, Chesnara trades growth potential for income reliability, which is why many investors view it as a dependable dividend stock.

As a risk, the business needs to keep up with new acquisitions going forward. After all, it manages closed books, where the policies naturally end in the future, so without good new purchases, cash flows could gradually decline.

But I think both companies are worth considering for investors, with a strong track record of income generation.

The post 2 dividend shares that have paid consistent income for multiple decades appeared first on The Twelfth Magpie.

Its rise has been remarkable. On 7 April, Chesnara was valued at just £366m. Fast forward four months, and it’s almost doubled in size to a market-cap nearing £700m.

So what lit the fuse?

The spark came in early July when Chesnara announced a £260m cash deal to buy HSBC’s specialist life protection and investment bond provider. The acquisition will add around £4bn in assets under administration and 454,000 new policies, significantly boosting its scale in the UK.

Management expects the deal to generate £140m in cash during the first five years, with the potential to reach £800m over the long run. That’s a sizeable kicker for any business.

To fund it, Chesnara plans to raise £140m through share issuance — a move that may dilute shareholder value and dampen enthusiasm for new investors. Still, the bigger story for many will be its dividend plans. Management expects to raise its final dividend for 2025 and interim dividend for 2026 by an adjusted 6%. For income hunters, that’s tough to ignore.

A dividend machine?

Chesnara already offers a chunky trailing yield of 7.3%, with forecasts pointing towards a bumper 8.5%. That’s comfortably above the FTSE 250 average. But can it last?

One concern is the payout ratio, currently hovering around 950%. For most firms, that would be a huge red flag. Typically, a sustainable ratio sits below 100%. However, insurers play by slightly different rules. Volatile earnings, capital requirements and complex accounting can distort the numbers.

Legal & General, for instance, has often carried a high payout ratio but has managed to keep shareholders sweet for decades. Chesnara too has a stellar track record — it’s increased its dividend every year for over 20 years. That’s not something an investor should dismiss lightly.

Another eyebrow-raiser is valuation. Its trailing price-to-earnings (P/E) ratio stands at an eyewatering 131.5 — more befitting of a Silicon Valley tech stock than a UK insurer. But here’s the twist: analysts expect earnings to grow rapidly, bringing its forward P/E down to just 13.3. Suddenly, things don’t look quite so stretched.

Profitability however, still nags at me. With an operating margin of only 1.1% and a return on equity (ROE) of 1.16%, the business isn’t exactly overflowing with surplus cash.

That said, analysts remain bullish. The average 12-month price target sits at 319p — around 9.5% higher than today’s price. Out of five analysts covering the stock, four rate it a Strong Buy, while one prefers to Hold.

My take

The FTSE 250’s full of fascinating mid-caps that often fly under the radar, and Chesnara’s rapid ascent highlights how quickly fortunes can change. The HSBC deal could be a genuine game-changer, but it comes with risks — from share dilution to the challenge of integrating such a large book of business.

If the acquisition pays off and dividends keep climbing, it could prove a rewarding addition to a passive income portfolio. It’s not quite a screaming buy in my book — yet — but at this yield, it’s certainly worth serious consideration.

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Some of us never forgot them, mind. And three that I like the look of are due to report in September.

Cash cow #1

House builder Barratt Developments (LSE: BDEV) has full-year results due on 4 September. The share price is down over five years, which helps keep the forward dividend yield at a healthy 5.1%.

For long-term dividend income, I reckon this could be one of the more sustainable. And this yield is in a down year when the business is under pressure. Forecasts show earnings starting to grow again from 2025 onwards.

With the firm’s July trading update, the board said it “intends to declare an ordinary dividend in line with policy, with dividend cover of 1.75 times adjusted FY24 earnings per share“.

We’re not out of the woods, as many people have other costs on their minds. Energy prices are rising, and the humble British fish and chips dinner has gone through the roof.

But even with more short-term uncertainty, I think I’d buy now if I didn’t already own some house builder shares.

Cash cow #2

While eyes turn to finance stock yields, I think the 9.1% forecast for Chesnara (LSE: CSN) has dipped under the radar.

The life sssurance and pensions consolidator has seen its share price fall in the past couple of years.

It’s only a relatively small company, with a £400m market cap, in a big insurance sector. And that’s possibly the biggest risk. Smaller firms might not have the same resilience needed to handle any new downturn quite so well as larger peers.

I reckon that could keep investors away and focused more on big FTSE 100 stocks.

But at the time of FY 2023 results, Chesnara reported a rise in commercial cash generation to £53m, with strong solvency. CEO Steve Murray said “The two acquisitions we delivered in 2023 show we have continued momentum behind our acquisition strategy“.

The company lifted its dividend by 3%. First-half results are due on 10 September.

Cash cow #3

Over at PZ Cussons (LSE: PZC), we’re looking at a 5.1% forward dividend yield. The poor share price chart for the past five years has helped with that.

But if the full-year results due on 18 September are any good, I wonder if we might see the start of an upturn.

One problem is that Cussons has had a tough time in Nigeria, which made up more than a third of its 2023 revenue.

Still, in June’s trading update, the firm said it held minimal surplus cash in Nigeria. And we were reminded of the “plan to maximise shareholder value from a portfolio transformation, following a strategic review of brands and geographies.“

“An update will be provided when appropriate“, the board added.

The risk through uncertainty seems clear. But if Cussons can align itself with upbeat forecasts, we could see the stock valuation fall and the dividend cash grow.

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Of course, dividends are never guaranteed and stocks are no substitute for cash savings. But the income available from good quality dividend shares is generally much higher than from savings accounts. For me, that makes shares an attractive investment at the moment.

A defensive 6.8% yield

My first choice is British American Tobacco (LSE: BATS). This FTSE 100 tobacco group carries some ethical and regulatory risks, but I think that BATS’ increasing focus on lower-risk products such as vapes goes some way to reducing these concerns.

For now, the reality is that this business is one of the largest in the tobacco sector and enjoys stable profits and strong cash generation. British American generated £7.2bn of surplus cash in 2021, of which £4.9bn was returned to shareholders.

Fortunately, British American was also able to reduce its debt levels by around 10% last year. The group’s leverage has been a concern for me in the past, but I’m increasingly comfortable with the situation.

The BATS share price has risen by nearly 25% so far in 2022, but the stock still offers a generous 6.8% dividend yield. With the shares trading on less than 10 times forecast earnings, I’d be happy to add British Americanto my portfolio at current levels.

Dividend shares: a property pick

I’m a fan of using real estate investment trusts (REITs) to generate a property income from my share portfolio. One UK REIT I’ve been following for a while is NewRiver REIT (LSE: NRR).

NewRiver owns regional retail property around the UK. The company’s sites are typically local or regional retail parks, and shopping centres in small and mid-sized towns.

It’s been a difficult few years for the group. Even before the pandemic, conditions were tough for retail landlords. To add to NewRiver’s problems, it had too much debt, in my view.

CEO Allan Lockhart now seems to have pulled off a difficult turnaround. He’s sold a number of properties, cut debt, and restored the dividend. Occupancy in NewRiver’s remaining portfolio is over 95%, and new rental rates are rising.

NewRiver still has a few problem sites. But the shares offer a forecast yield of 7% and I believe the business is now on a sound footing. I’d be happy to buy this dividend share for extra income.

A safe 8% yield?

Insurer Chesnara (LSE: CSN) buys life insurance and pension policies from other companies, and runs them to maturity.

This specialist business model generates plenty of cash, most of which Chesnara returns to its shareholders. As a result, this insurer is currently one of the highest-yielding stocks on the London market, with a forecast yield of 8%.

One risk I can see is that Chesnara could gradually run out of new acquisition opportunities. The business might then go into decline unless management pursued a new strategy.

However, there’s no sign of this yet, and a 17-year track record of dividend growth gives me confidence in Chesnara’s experienced management. I own plenty of insurance stocks already, but if I was buying an insurer today, Chesnara would definitely be on my shortlist.

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