2 compelling UK dividend shares with sky-high yields and low, low prices
UK dividend shares are a great way to help supercharge a retirement portfolio — and they arenât just for the rich.
There’s a wealth of cheap UK shares available even to those with only a small amount of money to invest.
Smiths News
The first share to consider is Smiths News (LSE: SNWS), a small (£140m) outfit that generated around £1.1bn in revenue over the past 12 months. The company provides services in the sale, marketing and distribution of newspapers and magazines.
The shares look cheap at just 59.4p, backed by a forward price-to-earnings (P/E) of just 5.79 — attractive to value investors. On top of that, they have a high dividend yield at roughly 8.8% and with a payout ratio of only 45.3%, they’re well covered.
In recent updates the business reported adjusted operating profit up 3.2% in H1 2025 and free cash flow increasing. It also secured contracts covering 91% of its publisher revenue streams through to at least 2029, which lends medium-term stability.
However, there are key risks. Margins remain thin and earnings are weak given the decline in traditional print media. Even the digital ad revenue side is under pressure from artificial intelligence (AI)-driven changes in the advertising landscape. Debt is reducing but the business remains exposed to structural decline in its core markets. An investor should weigh up those risks against the high yield.
So while Smiths News offers a compelling income play with a cheap valuation, it depends on the company maintaining relevance in the shrinking print and magazine industry.
Reach
Another contender is Reach (LSE: RCH), also in news media and publishing. The shares trade at around 61.2p each with a shockingly-low forward P/E of 2.58.
The yield is an eye-watering 12% but the payout ratio is still low, at roughly 46.4%. Plus, it has an 11-year-long payment track record and sufficient cash coverage to support payments.
On the surface, this looks like a very high income-yielding play with value appeal.
Nevertheless, the risks are significant. Revenue is forecast to continue declining for the next three years as print falls away and digital ad markets evolve rapidly. The companyâs ability to succeed under a new paradigm of AI-driven advertising is uncertain.
If Reach canât transform its business model effectively, the dividend payments may come under pressure. Also, its sector faces structural challenges which could erode long-term viability.
Thus, while Reach may look like an excellent high-yield cheap share to consider, an investor must recognise the real possibility that dividends might be cut or growth stalled.
The bottom line
For investors keen to grab some cheap shares with high yields, Smiths News and Reach both make excellent value plays worth considering in the dividend shares space. They offer strong income potential and attractive valuation metrics.
But the caveat is clear: both sit in a news-media and print distribution sector under significant structural pressure from digital disruption and AI-driven advertising changes.
So while the yield stories are compelling, the business models face headwinds that must be weighed carefully.
In short, these dividend shares could be part of an income-focused portfolio strategy, but should only be considered with both the yield and the broader sector outlook in mind.
The post 2 compelling UK dividend shares with sky-high yields and low, low prices appeared first on The Motley Fool UK.
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Mark Hartley has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
