Jack Tang Tuesday, 23rd June, More on: BLT BP CSN BBL BP. Income investors should look beyond blue-chip stocks for high-yield opportunities.

Some small-cap shares can provide safer and more stable dividend growth than commodities-exposed blue chip companies. BP has an attractive dividend yield of 5.

Earnings coverage of the dividend is expected to fall just below 1. Register by giving us your email below to continue reading all of the content on the site. Soon you will also begin to receive our FREE email newsletter, The Motley Fool Collective.

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The Motley Fool respects your privacy! Please read our Privacy Statement. BLT pays a dividend yield of 5. Although its dividend is covered on earnings by over 1.

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Persistently high capital spending on increasing iron ore production would likely mean that its dividend will only be sustained through taking on more debt. Even though BHP Billiton suffers from a weak outlook for most commodities, including iron ore and oil, its capex budget could be reduced further without hurting its extraction rate too much.

CSN , the closed book insurer, is attractive because of its strong cash generation capability. Gross cash generation fell But, the dividend is still safely covered by more than 2. On earnings, the dividend is covered 1. Its simple business model of acquiring and managing closed life insurance and pension books means that it can keep operating costs low. The life insurance market is highly fragmented, and further consolidation could lead to substantial savings.

Running down old policies also allows it to release provisions, which makes the business highly cash generative. Limited new customer business means that Chesnara needs acquisitions to sustain growth in operating cash flows in the long term.

So far, the company has been able to acquire closed books at a sizeable discount to their embedded value, but increasing competition could lead to more expensive acquisitions or Chesnara could avoid acquisitions all together.

But, both scenarios lead to reducing the cash available for distribution to shareholders. Chesnara has limited capital appreciation potential, as the company trades at 0. Embedded value is a commonly used valuation measure for life insurers, because it is an estimate of the present value of future profits and the sum of net asset value.

Closed-end insurers are rarely valued above their embedded value. Its shares currently have an attractive indicative dividend yield of 5.

If you are looking for reliable income-generating opportunities, The Motley Fool has a free special report that lists alternatives more aligned with your investing strategy: These five large-cap shares have been selected for their income and growth prospects.

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The special report is free and there's no further obligation. Jack Tang has no position in any shares mentioned.

Chesnara plc (CSN) Ordinary 5p Share Price | CSN

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Should You Buy These High-Yielding Shares? BLT BP CSN BBL BP Income investors should look beyond blue-chip stocks for high-yield opportunities. Keep Reading Register by giving us your email below to continue reading all of the content on the site. I mainly invest for Growth. See all posts by Jack Tang. So we can give you the most relevant experience, please tell us what phrase below best matches your investing style: Claim your FREE report… The Fool's 5 Shares To Retire On.

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