I’ve been nagging you to buy big oil and mining in the UK for some time, so I am not going to go on about Shell and BP (except to say that they are not the enemy and that their average yield is 4 per cent, which is nice) or BHP, Anglo American and Rio Tinto (also not the enemy and offering an average of 6.8 per cent).
Instead, I’m going to suggest some smaller names — the good news is that the UK, long considered to be too resources grubby and Brexity for international investors to consider, has hordes of profitable income-producing dividend-paying resources companies that should suit you down to the ground if you are happy to add a little more risk to your portfolio.
Kenmare Resources is a mineral sands miner with an operation in Mozambique and a policy of paying out a minimum of 20 per cent of after-tax profits in dividends. It is, says Berenberg, “a well-established income stock” on a yield of currently 5.5 per cent. With supply tight and prices rising that is unlikely to change.
Kenmare Resources plc (LON:KMR) is an established mining company, which operates the Moma Titanium Minerals Mine, located on the north east coast of Mozambique.