Global stock markets have had a rough spell, and that’s never fun to watch when you’re investing for the long term. But falling share prices also mean rising dividend yields, which can be a rare chance to lock in higher passive income from solid UK companies.
Three popular names that have slipped this past month are Pets at Home (LSE: PETS), British Land and Aberdeen (LSE: ABDN), each sporting chunky yields between 6%-7%.
Pets at Home makes most of its money from pet products, vet services and grooming, so its sales are tied to everyday (but emotionally-driven) pet spending rather than big-ticket items. The shares now yield roughly 6.7%, with dividends covered 3.6 times by cash and a payout ratio of 77%.
Recent results showed steady profits and continued dividend growth over the last decade, suggesting the board’s comfortable sharing cash while still investing in the business.
Valuation looks reasonable, with a price-to-earnings (P/E) ratio of 11.7 — lower than many UK consumer retailers. However, stubborn inflation poses a risk: while people rarely cut pet spending first, any deeper recession could slow discretionary purchases like toys or accessories.
Stiff competition from low-cost online retailers could pressure margins if shoppers look elsewhere.
British Land’s one of the UK’s big listed property companies, managing offices, retail parks and mixed‑use sites. Its shares currently offer a dividend yield of roughly 6%, with payouts accounting for only half of earnings. In its latest half‑year results for 2025/26, underlying profit rose 8% and earnings per share nudged higher, allowing management to lift the interim dividend by 1%.
Higher interest rates continue to challenge commercial property values, but as markets start to price in future cuts, yields on high‑quality property groups like British Land look more attractive.
The big risk is that if the UK economy weakens again, rental demand for offices and retail space could fall. That would pressure both income and property valuations.
Aberdeen’s an asset manager that earns fees for running funds and portfolios for clients. The shares trade on a below-average P/E ratio and the dividend yield of 8% is very attractive. The company has kept the dividend going for 19 years and the latest numbers show a payout ratio around 80%. That’s a bit high but the dividend is still sufficiently covered by current earnings.
That limited cover’s a key risk though. If markets weaken and fee income drops, management could eventually decide to trim the payout to protect the balance sheet. On the flip side, a recovery in markets and fund flows would give it more breathing room, as rising asset values generally lead to higher fee revenue.
