9% yield! Is this one of the best dividend stocks to consider buying right now?

Buyers not often get an opportunity to purchase stocks with 9% dividend yields the place the enterprise is on the up. However this may be the case with B&M European Retail Worth (LSE:BME) right now.

The corporate has fallen out of the FTSE 100 after a disappointing couple of years. However the newest indicators are optimistic, so might this be an enormous passive earnings alternative?

What’s been going improper?

In the 52 weeks main up to March, B&M’s whole revenues grew from 3.7% to £5.6bn. That doesn’t sound too dangerous, however there’s much more happening beneath the floor.

The difficulty is, this was virtually completely the end result of opening new shops. Adjusting for this, outcomes have been poor – particularly in the UK, the place gross sales fell 3.6%. 

With the UK accounting for round 80% of whole gross sales, that’s alarming. The headline quantity won’t look too dangerous, however a dive into the particulars presents a way more worrying image.

B&M does have ongoing plans to hold increasing its retailer rely. But it surely gained’t have the opportunity to do this eternally – in the end, particular person shops are going to have to begin performing higher.

Indicators of a restoration

Regardless of this, the inventory has climbed 30% from its 52-week lows. And a giant purpose for that was the firm’s replace for the three months main up to the finish of March.

Throughout this interval, B&M’s like-for-like UK gross sales fell 2.4%. That’s nonetheless not good (or anyplace close to good) however the market reacted positively and it’s straightforward to see why.

Over the final three quarters, this metric has began shifting in the right course once more. The earlier report introduced a 2.8% decline and the common for the 12 months was a 3.1% drop.

There’s a good distance to go, which is why the inventory remains to be 40% decrease than the place it was at the begin of 2024. However the slowing decline in like-for-like gross sales is undeniably a optimistic signal.

Dividends

A falling share value has pushed the dividend yield on B&M shares to some eye-catching ranges. The headline is round 4.6%, which in all probability counts as fascinating with out being spectacular.

Once more although, there’s extra to the firm than meets the eye. On prime of its common dividend B&M has additionally paid a particular distribution annually since 2020.

That quantity has fluctuated – and the weak latest efficiency meant it fell in 2025. However even accounting for this, it’s nonetheless about the similar as the total common dividend for the 12 months. 

If this continues, buyers who purchase the inventory in the present day might get round 9% of their funding again in money annually. And there aren’t many locations providing that sort of return right now.

Is the worst over?

B&M shares are an fascinating proposition right now. Again when like-for-like gross sales declines have been accelerating, I assumed that buying the inventory was very dangerous. 

The final 12 months have in all probability vindicated that view. And whereas there’s a threat issues might deteriorate additional, the indicators are encouraging.

The inventory may be 30% larger than its lows already, but when the firm is thru the worst, a 9% yield may very well be an amazing alternative. I feel it’s undoubtedly one for dividend buyers to consider.