The Motley Fool

Best shares to buy for income? I’d pick these FTSE 100 stocks

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

UK investor holding smartphone and monitoring shares
Image source: Getty Images

If I were hunting the best shares to buy for income, there are a few things I’d be looking for:

  • A decent, but not excessive, too-good-to-be-true yield
  • A history of growing payouts over the years
  • The company’s products or services are in near-constant demand
  • Finances are solid enough to weather inevitable stock market storms.

With this in mind, here are three stocks from the FTSE 100 I’d feel comfortable building my portfolio around.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!


At 2.1%, Diageo‘s (LSE: DGE) dividend yield looks pretty low. However, I do think it’s one of the most secure. The company owns many of the best-selling premium spirits brands. It also has a massive geographical reach, meaning it’s not dependent on just one or two economies performing well. 

Sure, there are risks. The global pandemic has shown that even the most robust businesses can still run into trouble as a result of black swan events. The closure of drinking dens around the world has hit Diageo’s sales and share price, even if many of us have continued to consume at home. 

So long as we continue to fight back against the virus, all this should prove temporary. The fact that it’s continued to increase dividends even over the last year suggests management is confident of sales recovering strongly.


I consider FTSE 100 peer Unilever (LSE: ULVR) to be another one of the best shares to buy. Again, the income isn’t excessive. A 3.4% yield for the current year pales in comparison to what you could get from a FTSE 100 miner or housebuilder. But this is missing the point. 

Like Diageo, Unilever’s appeal as a source of dividends lies in the fact its products are always in demand. A company whose earnings are cyclical is often forced to reduce its dividend payouts when the tide turns. 

Of course, earnings growth may still occasionally disappoint (as it has recently), highlighting that even Unilever’s share price can run into difficulty. However, its performance over the long term shows just how rewarding it can be to buy right and wait.

Unilever also scores highly when it comes to regularly raising its payouts to investors. When a firm can do this year after year, it makes sense for me to re-invest what I receive, thus compounding returns over time

National Grid

I couldn’t think about building an income portfolio without some exposure to the utility sector. Thanks to our constant need for electricity, gas and water, these companies tends to be a rich source of dividends. That’s why my final ‘best shares to buy for income’ pick is National Grid (LSE: NG.).

Analysts have the power provider returning 49.6p per share in the current financial year. At the current share price, that becomes a yield of 5.2%. That’s a lot higher than the 3% offered by the FTSE 100 as a whole. 

Again, there are some things to be aware of. Dividend cover — how well payouts are covered by profits — is a little low. The high costs involved in keeping its infrastructure running smoothly also mean dividend hikes will always be conservative. Supporting its rather dull reputation, share price progress has been fairly pedestrian too.

Nevertheless, the predictability of earnings means I’m willing to overlook these things. I’d be happy making National Grid a core holding of an income-focused portfolio.

The Motley Fool UK's Top Income Stock...

We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign.

But with this opportunity it could get even better.

Still only 55 years old, he sees the chance for a new “Uber-style” technology.

And this is not a tiny tech startup full of empty promises.

This extraordinary company is already one of the largest in its industry.

Last year, revenues hit a whopping £1.132 billion.

The board recently announced a 10% dividend hike.

And it has been a superb Motley Fool income pick for 9 years running!

But even so, we believe there could still be huge upside ahead.

Clearly, this company’s founder and CEO agrees.

Learn how you can grab this ‘Top Income Stock’ Report now

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo and Unilever. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.