Why I look for more than just a high yield when buying UK dividend shares

first_img Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Peter Stephens | Saturday, 6th February, 2021 FREE REPORT: Why this £5 stock could be set to surge Get the full details on this £5 stock now – while your report is free. The idea of buying UK dividend shares is often to obtain the highest yields and the largest passive income available. While they may be important, it’s not the only consideration that may be worth focusing on when seeking to build an income portfolio.Factors such as the reliability of a company’s dividend, its potential to grow and its investment plans could all have a significant impact on its capacity to provide a worthwhile passive income. By focusing on those areas, it may be possible to build a more resilient income portfolio in the long run.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The reliability of UK dividend sharesClearly, no UK dividend shares are 100% reliable when it comes to earning a passive income. They come with significant risks that can mean no dividends are paid in future, or that capital returns are negative.However, the risk of experiencing such situations can be reduced by focusing on the reliability of a company’s dividend. For example, assessing a company’s business model may provide guidance on how robust its earnings may prove to be in future.A company that operates in the utility or tobacco sector may be less likely to experience falling sales or profitability in an economic crisis versus a media or retail business. As such, while no company is ever immune from economic risks, some companies may be less impacted by them than others.Furthermore, UK dividend shares with financial positions that are sound could be less likely to reduce dividends in the coming years. Strong balance sheets and high cash conversion ratios may not be as exciting to investors as growth plans. But they could prove to be very important when it comes to making a high passive income return in the long term.Dividend growth opportunities related to investment plansHigh yields may also be less important than they seem when investing in UK dividend shares because of the importance of a growing passive income. A high yield may be attractive today, but if it doesn’t grow by at least as much as inflation over the long run then it could equate to a loss of spending power. As such, it is important to obtain a growing income from a portfolio of dividend shares.Achieving this goal can be difficult because dividend growth forecasts may prove to be unreliable. However, by assessing how a company plans to apportion its earnings, in terms of reinvestment or paying out to shareholders, it may be possible to ascertain the likelihood of a growing dividend.Companies that have a mature position in their industries may be more likely to pay out profit to shareholders in the form of a dividend. This could make high-yielding, established companies more attractive on a relative basis. Simply click below to discover how you can take advantage of this. Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares Why I look for more than just a high yield when buying UK dividend shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Peter Stephenslast_img read more