If I'm looking for stocks to buy, should I just go for high yield?

I invest mainly in UK dividend stocks. And along with the dividend yield, I also look for good coverage of dividends and evidence of long-term cash flow, among other measures.

But what if I just put money into the ones with the highest yield each year, and then just forget about them?

It would certainly make scratching my head over my Stocks and ISA Shares decisions a little easier.

Great harvest

The following table shows five FTSE 100 stocks with high yield forecasts at the moment. I left Vodafoneas a major cut was announced in 2025.

There is one takeaway from this. Buying all five would put me largely in the cross-insurance and estate management businesses, including four out of five.

British American Tobacco is the only non-financial option in the entire region.

And one thing that I always see as an important part of my strategy is diversity. I was very happy about it in the bank crash, for sure. And I will look for decent diversification in case we see a downturn in the insurance sector in the future.

Cycle selection

That being said, I love the industry. And I think Legal & General is what attracts me the most to these people.

Insurance can be very cyclical. And when things are going well, dividend yields like those on the table can look pretty good.

However, forecasts show that Legal & General's dividend will increase significantly from 9.5%, reaching 9.7% by 2026. That will largely depend on how the economy fares over the next few years. And right now, the world doesn't look like a very friendly place.

So far so good

For now, at least, the cash flow seems to be going well. During H1, Legal & General increased its interim dividend by 5%. And it goes on to say “a £200m share buyback, which coincides with our new capital return structure“.

The company plans to continue raising its dividend over the next few years, albeit at a slower rate.

The biggest risk I see is the cyclical nature of the industry, along with the real value of competition. Like, from many others at my table.

Something different

Much of this reasoning applies to others at the table, except for British American Tobacco. That huge 8.8% gain comes even as the share price is up 16% year to date.

I don't share the fear that tobacco profits will disappear, at least not in my investing life. But that's a big risk, for sure.

It's really the ethical issues that would keep me from buying tobacco stocks. But other than that, this is a profit I would like to get for long term income.

And it's nice to see that not all of the top five are in the same business.