The Aberdeen Equity Income Trust's co-managers, Thomas Moore and Iain Pyle, have chosen three diverse income stocks for your portfolio
The Aberdeen Equity Income Trust portfolio's diversity of opportunities and the combination of income and capital growth that we seek are exemplified by the three income stocks selected below.
The trust looks for businesses that are changing and that the market is undervaluing, using a purposefully index-agnostic approach. The concept is straightforward: neglected or understudied fields frequently offer the most attractive opportunities. Compared to other conventional UK equity income strategies, this results in a portfolio that looks quite different.
The trust can access a wider range of income stocks, many of which offer attractive yields and the possibility of dividend growth, thanks to the lack of sector restrictions and a flexible approach to size. Capital appreciation can be supported by valuation re-ratings as the companies become more well-known. This strategy is becoming more and more important as the macroenvironment begins to improve and investor focus shifts away from the FTSE 100.
Take a look at these three income stocks.
Since 2014, we have held Chesnara (LSE: CSN), demonstrating our enduring faith in its business strategy. With 440 million acquisitions completed in the last five years, it functions as a disciplined buyer of legacy life insurance assets. By pursuing overlooked deals and refusing to overpay, Chesnara has carved out a niche while private equity concentrates elsewhere and large financial institutions streamline operations and sell off non-core assets (often at attractive discounts). This methodical approach has produced a solid track record of transactions that increase earnings. As older policies expire, the book is replenished by the consistent stream of acquisitions. With expansion into Europe and an increase in assets under administration from 8.5 billion to over 20 billion, scale has grown significantly. The management anticipates more opportunities with over 100 million firepower. Chesnara produces cash by effectively managing its current books and offers investment returns that surpass the risk-free assumptions built into its actuarial models.
Leading the world in liquefied natural gas (LNG) containment systems, GTT (Paris: GTT) is expected to grow structurally. As economies move away from coal, demand for LNG is predicted to increase by about 60% between 2025 and 2040, necessitating the need for more tanker capacity. GTT's membrane technology is essential to the safe transportation of LNG, and decades of research and development have given it a commanding market share. Due to the high barriers to entry and the reluctance of shipowners and insurers to take a chance on unproven suppliers, pricing power and consistently high margins are supported. Growing worldwide LNG flows and a replacement cycle for an aging tanker fleet should help core growth. More than 15,000 vessels already have technology installed, and GTT is also developing a digital services platform. This makes it possible to cross-sell software and consulting services, which is an area with high returns but is still under-monetized. This focus could be accelerated by a new CEO, and reinvestment and dividends are supported by strong cash generation.
Early in 2026, the sharp decline in software stocks opened up opportunities for income-seeking investors. Softcat (LSE: SCT), a UK IT reseller, collaborates with over 200 international technology providers to help businesses connect with complex IT. It has produced steady organic growth, increasing market share and gaining a devoted clientele; repeat business accounts for 95% of revenue. Softcat is in a good position to meet the growing demand for processing power, storage, networking, and security infrastructure due to the quick uptake of AI. It is anticipated that this structural tailwind will sustain the company's earnings growth, leading to an increase in dividends.
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