2 UK shares I’d buy in March for passive income

Our writer is eyeing two UK dividend shares to buy for his portfolio this March that could boost his passive income streams.

| More on:

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.

positive mental health woman

Image source: Getty Image

I like buying shares to set up passive income streams. Once I own them, they really are passive. I can just the let companies do their hard work and hopefully pay me dividends with the profits they make. That is never guaranteed, though, which is why I diversify my passive income streams across several companies. 

Here are a couple of firms I would consider adding to my portfolio in March for the potential long-term passive income streams they offer.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Direct Line

Insurers are often strong dividend payers. That can make them attractive from a passive income perspective. The business model lends itself to consistently generating surplus cash flow. That can be paid out to shareholders. Indeed, some insurers aim to pay out regular dividends but also, if their cash surplus reaches a certain point, to pay out a special dividend.

From a passive income perspective, I would consider adding Direct Line (LSE: DLG) to my portfolio this March. With the company due to announce its preliminary results on 8 March, it will be coming under more scrutiny than normal in the City. At the interim stage, the company raised its dividend by 3%. Although that is a modest increase, over the long term, regular increases could help increase my passive income streams significantly. Currently, Direct Line offers a yield of 7.5%. I find that very attractive as a potential addition to my dividend portfolio.

As well as being in an attractive business sector generally, I think Direct Line’s long investment in its iconic red telephone logo gives it a marketing advantage over rivals. That could help sustain customer loyalty and profits. One risk to profits the company flagged earlier this year was the increasing cost of second-hand vehicles. I will be keeping an eye on the preliminary results to see whether the company is managing such risks in a way that still enables it to raise the annual dividend.


Another company I would buy for its passive income potential is the domestic gas and technology conglomerate DCC (LSE: DCC).

With its yield of 2.9%, the company would offer me an attractive but not unusually large passive income stream. But with an eye on the years to come, I think putting DCC in my portfolio now could turn out to be more and more lucrative over time.

Passive income potential

DCC operates in diverse areas. That helps protect it from some of the risks to individual parts of its business. Still, they do exist and if there is a shift away from using gas as an energy source, which could hurt both profits and revenues.

One thing that impresses me is the company’s proven ability to manage its businesses efficiently and generate substantial profits. It has used its successful business model to increase its dividend for 27 years in a row. At the interim stage, the payout grew more than twice as fast as Direct Line’s, by 7.5%. Dividends are never guaranteed at any company. But I do think the potential for continued dividend growth at DCC could make it a rewarding addition to my portfolio.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

3 reasons why the stock market is falling today

Jon Smith explains several factors that are contributing to the stock market falling today, and his thoughts on them.

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 stocks that are great long-term picks

As recession fears weigh on share prices, our author has found two stocks with strong long-term prospects. He’s looking at…

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

2 lesser-known penny stocks to buy now and hold for 10 years!

I’m currently looking at penny stocks that could help my portfolio grow over the next 10 years. Despite recent volatility,…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

Here’s 1 of the best stocks to buy for passive income

Jabran Khan delves deeper into one of the best stocks to buy for passive income, which is a FTSE 100…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

IAG shares are down 15% amid travel chaos! Is now the time to buy?

IAG shares have collapsed over the past month. Shareholders had hoped for a strong Q2. But maybe this represents a…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

UK shares: 1 dividend stock I own to combat inflation

This Fool is looking for quality UK shares to combat inflation through consistent and stable returns as well as growth…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

Here’s how I’m investing as stock market volatility soars!

2022 has seen an explosion in stock market volatility. But with the right approach I think ongoing choppiness could turbocharge…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

2 top FTSE 100 shares to buy before a new bull market

On my search for FTSE 100 shares to buy before the recovery, I have found two growth options that could…

Read more »