The idea of building a rising passive income with FTSE dividend stocks appeals to me. So, I’d choose shares with strong, high-quality underlying businesses capable of raising their dividends a bit each year.
If I hold stocks like that, my portfolio could generate a rising passive income. And, on top of that, share prices tend to increase over time to reflect the progress of underlying business operations. So, I may see my dividend income rising and the capital value of my portfolio increasing as well.
Of course, nothing’s certain. But by being selective about the shares chosen means there’s a good chance the investing outcome will be favourable over the long term. And, right now, I’ve got my eye on seven potential investments that may be suitable for a portfolio aimed at generating a rising passive income.
My top dividend stocks
They all have a decent trading record and a long history of paying rising shareholder dividends. And they all occupy attractive niches within defensive sectors. Operations tend to generate decent cash inflow in each case. And I reckon all the underlying businesses have the potential to keep dividends rising in the years ahead.
FTSE SmallCap company AG Barr makes soft drinks and owns several popular brands including Irn-Bru. City analysts predict a robust single-digit percentage increase in the dividend for the trading year to January 2022. And with the share price near 518p, the forward-looking yield is just below 3%.
In the FTSE 100, I’d go for smoking products maker British American Tobacco. Steady mid-single-digit percentage advances in the dividend are ahead, according to analysts’ estimates. Meanwhile, with the share price near 2,803p, the forward-looking yield is almost 7.9% for 2021.
Meanwhile, premium branded alcoholic drinks supplier Diageo has a steady record of single-digit percentage increases in the dividend. And the FTSE 100 company predicts further gains ahead. With the shares at 3,036p, the forward-looking yield is just over 2.4% for the trading year to June 2022.
Business software company Sage is another Footsie company that stands out for its solid record of dividend raising. Analysts expect further increases ahead. And with the share price near 575p, we can expect a yield for the trading year to September 2022 of around 3%.
I’d select water company Severn Trent from the FTSE 100 too. We can expect modest dividend increases ahead. And the share price of 2,367p implies a forward yield of just over 4.3% for the trading year to March 2022.
More from the attractive soft drinks sector
From the FTSE 250, I’d select soft drinks producer Britvic. Forward-looking predictions for the dividend are robust. And with the shares at 817p, the yield anticipated for the trading year to September 2022 is around 3.6%.
My final pick is small-cap company and owner of the Vimto brand Nichols. Again, we can expect decent dividend rises ahead. And with the shares at 1,220p, the yield for 2021 is just above 3.1%.
