FTSE 100 shares with dividend yields above 5% that I think could help you get richer and retire earlier

Most investors will know by now that many companies have cut their dividends as a result of the Covid-19 crisis. However, despite the doom and gloom there are FTSE 100 shares still paying a decent dividend. Given dividends play a big role in total returns for most investors I think it could be worth checking some of them out.

A 6.8% dividend yield makes this share exciting

The first high yielding FTSE 100 share I’d think about buying is Rio Tinto (LSE: RIO). The company is clearly not without controversy, as shown by the recent furore over the blowing up of caves important to Aboriginal people in Australia. This may bring with it increased political pressure which could hold back the share price and pose a risk.

On the point about risks, the growth of ESG investing, especially among the large institutional investors, perhaps has the potential to also hold back the share price. More so possibly in the future than has been the case in the past. 

However, fundamentally and longer-term I think the group is attractive from an investment point of view. Rio Tinto is a high margin business. Demand from China especially for iron ore seems unlikely to significantly fade, which should support the share price.

Rio Tinto always carries some risk. It’s cyclical, which means the shares do fluctuate more than other FTSE 100 shares. But overall I think the yield, at 6.8%, makes it an attractive investment.

A safe and steady 5% FTSE 100 dividend yield

National Grid (LSE: NG) is a very different kind of share. It’s a defensive share so is less volatile. It’s earnings are regulated giving it much more visibility over its future income and allowing it to plan its capital expenditure. National Grid’s business is unlikely to deliver surprises either good or bad. This makes it well suited to providing income for investors; even more so in the uncertain times we’re currently in.

The share price is up just a smidgen so far this year. This shows how the shares lack volatility. Despite the V-shaped recovery (so far) many other shares are still at least a little down on where they started 2020.

For National Grid I think one of its strengths is that it operates in very stable markets. It has operations in the US and the UK. National Grid has been increasing operating profits in the US and I think that market has potential for more growth.

With a 5% dividend yield, I think National Grid shares are a great buy for any investor’s portfolio. The payout is covered by earnings and has been steadily growing year-on-year, which I expect to continue.

With demand for electricity not going away anytime soon, I think the shares provide one of the safest FTSE 100 dividend yields. 

I think other defensive shares also are well-suited to investors looking for income. Companies such as GlaxoSmithKline and United Utilities, to name just two examples, could be worthwhile investments also.