These 2 beaten-up FTSE 100 turnaround plays are yielding almost 5%

I have been digging through the FTSE 100 for high yielding companies, and these two quickly caught my attention. Both stocks fell sharply over the summer, suggesting they might offer a turnaround opportunity going forward. Both yield nearly 5%, offering an attractive income while you wait.

Give me Land

Property developer British Land Company(LSE: BLND) is down 10% after its shares peaked at 675p in the summer. Over three years, it'ss down 29%. That's despite reporting a 7.4% rise in underlying profit to £390m during 2016, with a strong leasing and operational performance. However, Brexit still casts shadows over the sector, and the value of its portfolio dropped 1.4%.

In August, HSBC downgraded British Land from "buy" to "hold", claiming that its valuation is likely to come under pressure for the foreseeable future, due to the ailing UK economic and political situation, a situation that has since worsened. While many FTSE 100 companies now earn the bulk of their revenues overseas, the group's £13.9bn portfolio of prime London office space and UK retail centres leaves it fully exposed to any domestic downturn. British Land is no longer the attraction it was.

Tricky territory

The group recently launched a £300m share buy back, to take advantage of the fact that it is trading at a large discount to the net asset value (NAV), which currently stands at 915p, against a share price of just 610p. Management said the move is a good use of its money, better than using the cash to buy more property. However, critics point out that a similar scheme in 2007 failed to lift the share price.

Forecast earnings per share growth looks patchy, with City analysts predicting a 4% drop in 2018, and just 1% growth in 2019. Brexit will hurt if more companies do pull out of London and consumers abandon shopping centres. Given this threat, a valuation of 16.7 times earnings looks a little high. A forecast yield of 5.1% does offset that, although cover is only 1.2. Neil Woodford is an enthusiastic buyer (for what that's worth these days). Personally, I will keep looking for dividend stocks with stronger growth prospects.

United we fall

Water company United Utilities(LSE: UU) is also having a tough time, its share price down 17% in the last six months despite September's reasonably upbeat trading update. Management reported current trading remained in line with expectations, and stated that its operational performance was "delivering value" for customers, shareholders and the environment.

Earnings are expected to be almost 3% higher than last year, reflecting permitted regulatory revenue changes, with first-half underlying operating profit also expected to rise. However, EPS growth has disappointed lately, being negative in both 2016 and 2017, with a further 3% drop predicted in 2018. City analysts are more optimistic further down the line, expecting an impressive 15% leap in 2019.

Liquid asset

The biggest attraction that United Utilities has to offer is a forecast yield of 4.7, but again, cover is wafer thin at 1.1. I would also have expected a lower forecast valuation than a pricey-looking 19.5 times earnings. Prospects of a brighter 2019 make it my pick over British Land.

However, I reckon there are far more tempting dividend stocks out there.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

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