Lloyds Stock And 2 UK Dividend Shares Offering Yield Above 3%

With central banks keeping policy tight and inflation risks still in focus, many investors are looking for income streams that feel more reliable than trying to anticipate the next rate move. Dividend Powerhouses, companies offering yields of more than 5% that are covered, growing and stable, can help put regular cash flow at the center of a portfolio rather than short term speculation. This article highlights three stocks from the Dividend Powerhouses screener. It explains why their income profiles stand out and what to watch before deciding whether they fit alongside your existing holdings.

Lloyds Banking Group (LSE:LLOY)

Overview: Lloyds Banking Group is a large UK financial services company that offers everyday banking, mortgages, credit cards, business lending, and insurance and pension products through brands such as Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows.

Market Cap: £65.1b

Lloyds Banking Group catches the eye in a high yield screener because it combines a long established retail franchise with focused investments in digital and AI that are intended to trim costs and support earnings quality over time. Strong recent profitability, including a Q1 2026 net income of £1,531m and net profit margins around 24.1%, sits alongside efforts to grow fee based wealth and pensions income so the bank is less reliant on traditional lending. At the same time, its concentration in the UK economy, pressure on mortgage spreads, an unstable dividend record, and relatively low allowances for bad loans give you real risks to weigh. The full picture of how that trade off looks on valuation, capital returns and income resilience is where things get interesting.

Lloyds Banking Group’s push into digital and AI could be quietly reshaping its earnings mix and dividend potential, but the balance between income appeal and UK focused risks is not obvious from headlines alone. It is worth reading the 3 key rewards and 2 important warning signs

Foresight Group Holdings (LSE:FSG)

Overview: Foresight Group Holdings is a London based asset manager that runs infrastructure, private equity, venture capital and listed funds, with a particular focus on renewable energy, real assets and smaller growth companies for institutional and retail investors.

Operations: Foresight Group Holdings generates about £114.8m from Real Assets and £50.1m from Private Equity, with most revenue coming from the United Kingdom at £126.4m, alongside smaller contributions from Australia at £25.7m and several European markets.

Market Cap: £506m

Foresight Group Holdings stands out in a dividend focused screen because it couples fee based exposure to energy transition and infrastructure with a growing private equity franchise, while also running ongoing buybacks that reduce the share count. Earnings of £42.8m on revenue of £164.9m support a net margin above 27%, and analysts currently see faster growth in both earnings and revenue than for the wider UK market. The trade off is that funding relies entirely on external borrowing and profitability leans on performance fees, so setbacks in infrastructure policy, fundraising or investment returns could hit results. To understand how those benefits and risks stack up for income investors and what assumptions sit behind current valuations, you need the fuller analysis beyond the headline numbers.

Foresight Group Holdings sits at the crossroads of energy transition fees and private equity carry, yet the real swing factor for its income profile is buried inside the analyst forecasts for Foresight Group Holdings and what that implies if performance fees stall.

3i Group (LSE:III)

Overview: 3i Group is a London based private equity and infrastructure investor that backs mature, cash generative businesses and infrastructure assets across sectors such as consumer, healthcare, industrials, software and services, using its own balance sheet and third party capital to take control or influential stakes.

Operations: 3i Group generates most of its revenue from Private Equity at about £5.3b, alongside £193m from Infrastructure, £55m from ferry operator Scandlines, and £32m from unallocated IFRS adjustments.

Market Cap: £26.8b

Income focused investors might find 3i Group interesting because it combines a 3.16% dividend with very high reported net margins of 94.8% and a long history in private equity and infrastructure. It still trades on a low single digit P/E and at a discount to some fair value estimates. The engine is its Private Equity portfolio, particularly Action, where margin improvement, store expansion and refinancing are closely tied to future cash generation and buyback capacity, including the up to £750m program set to run through late 2026. The flip side is meaningful reliance on external borrowings, sensitivity to currency movements and political risk in Europe, and pockets of weakness in sectors like automotive and recruitment that could matter more than headlines suggest.

3i Group’s low single digit P/E and high reported margins suggest the market might not be pricing the full story. The real twist sits inside the analysis report for 3i Group

The three stocks in this article are just a sample of what the full Dividend Powerhouses idea turns up. The complete screen surfaces 43 more companies with 3%+ yields and equally compelling income stories on the Dividend Powerhouses (3%+ Yield) screener. Use Simply Wall St to identify, filter and analyze the specific catalysts and narratives that matter to you so you can focus on the dividend plays that best match your conviction and risk profile.

Take Control of Your Investment Journey

If Lloyds Banking Group or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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