Lloyds Stock And 2 UK Dividend Shares With Yields Above 5%

With inflation concerns, higher bond yields and geopolitical risks keeping markets on edge, many investors are looking for steadier ways to aim for income from equities. That is where a Dividend Powerhouses screen, focused on companies paying more than a 5% yield with well covered, growing and stable payouts, can help you keep your attention on consistent cash returns rather than short term headlines. This article walks through three of the strongest stocks from the screener and explains why their dividend profiles may appeal to investors who want income without abandoning discipline on quality and sustainability.

Lloyds Banking Group (LSE:LLOY)

Overview: Lloyds Banking Group is a long established UK banking group that provides everyday banking, lending, insurance and investment products to individuals and businesses through brands like Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows. Its services range from current accounts and mortgages to pensions and wealth management, all supported by a large digital banking platform.

Market Cap: £65.5b

For dividend focused investors, Lloyds Banking Group offers a mix of high current income potential, cost savings from AI and digital investment, and exposure to growing fee based businesses such as pensions and workplace wealth, all backed by a long operating history in UK banking. At the same time, you need to weigh its heavy dependence on the UK economy, competitive mortgage margins, relatively low loan loss provisions and ongoing regulatory and conduct risks, especially as it reshapes brands like Halifax and ramps up AI led initiatives. How those moving parts affect future earnings quality, capital returns and dividend sustainability is where the real story gets interesting.

Lloyds Banking Group’s high yield, cost cuts from AI and growing fee businesses point to a richer income story than many assume, but the real twist for its dividend track record sits inside the 3 key rewards and 2 important warning signs

Foresight Group Holdings (LSE:FSG)

Overview: Foresight Group Holdings is a London based asset manager that runs infrastructure, private equity, venture capital and listed funds, with a particular focus on renewable energy, real assets and smaller growth companies across the UK, Europe and Australia for institutional and retail investors.

Operations: Foresight Group Holdings generates most of its revenue from Real Assets at about £114.8m, with a smaller but meaningful contribution from Private Equity at about £50.1m, largely sourced from the United Kingdom at £126.4m and Australia at £25.7m.

Market Cap: £539.6m

Income investors drawn to Foresight Group Holdings are getting more than a high yield story. They are looking at an asset manager reporting earnings growth of 34.4% over the past year, with rising margins, a 47.8% return on equity (ROE) and continued buybacks that reduce the share count over time. The company is involved in long term themes such as energy transition and infrastructure, while its Real Assets and Private Equity platforms provide diversification across funds and geographies. At the same time, reliance on external funding, performance fees and policy sensitive renewables introduces risk if markets or regulation change. How those trade offs affect future cash flows, dividends and valuation is where the deeper investment case starts to take shape.

Foresight Group Holdings has earnings growth, rising margins and a 47.8% ROE, but the real question is how durable that mix is across cycles. That is exactly what the analysis report for Foresight Group Holdings quietly pieces together before one key twist.

3i Group (LSE:III)

Overview: 3i Group is a London based private equity and infrastructure investor that backs mature, cash generating businesses across sectors such as consumer, healthcare, industrials and software, alongside core infrastructure like utilities and transport. It uses both its own and third party capital to take control or influential stakes, working closely with management teams over many years to grow value and support regular shareholder returns.

Operations: 3i Group generates the bulk of its revenue from Private Equity at about £5.3b, with smaller contributions from Infrastructure at about £193m, Scandlines at about £55m and £32m of unallocated IFRS adjustments.

Market Cap: £25.1b

Income investors looking at 3i Group get a mix of private equity exposure, a 3.38% dividend and a business that has paired high quality earnings with net income of £5,294m in FY2026, while still trading well below some fair value estimates. At the core is its growing Private Equity portfolio and its increased stake in discount retailer Action, where store expansion, purchasing discipline and refinancing are expected to support EBITDA margins and help manage leverage. On the other side of the ledger, 3i Group is sensitive to currency moves, political conditions in Europe and sector specific weak spots, and relies entirely on market funding rather than deposits. How those strengths and pressure points feed into future dividend visibility and returns is where the real story starts to get interesting.

3i Group’s earnings story is tightly linked to its private equity engine, but the real tension sits in what happens next to cash flows and dividends as markets shift. This is exactly what the analyst forecasts for 3i Group starts to unpack before a crucial twist.

The three dividend ideas in this article are only a starting point, and the full Dividend Powerhouses screen has identified 43 more companies with similarly compelling income stories hiding inside the Dividend Powerhouses (3%+ Yield) screener. Use Simply Wall St to identify and analyze the specific catalysts and narratives that matter to you so you can focus on the highest conviction dividend opportunities in minutes instead of hours.

Take Control of Your Investment Journey

If Foresight Group Holdings or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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