2 UK shares I own to boost my passive income stream!

This Fool explains how he is making a passive income through two UK shares that pay a regular and consistent dividend.

| More on:
Passive income text with pin graph chart on business table

Image source: Getty Images

As a passive income seeker, I look for the best UK shares that are designed to pay out regular and consistent dividends.

Two of the stocks I own are real estate investment trusts (REITs). As a quick reminder, a REIT is a business set up to make money from income-yielding property. They are legally required to return 90% of profits to shareholders.

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!

I must note there are risks to investing in REITs to boost my passive income stream. As with any dividend stock, dividends are paid at the discretion of the business, meaning they can be cancelled at any time. Furthermore, if a REIT cannot rent out or collect rent from its properties, it cannot generate a profit and pay a dividend.

Passive income stock #1

Supermarket Income REIT (LSE:SUPR) invests in supermarket-related property in the UK. One of its core aims is to provide inflation-linked income. In fact, over 80% of the business’s rental income is tied to inflation. With inflation currently rising, Supermarket’s rental income should increase, in turn, increasing my returns.

So what’s the current state of play with the Supermarket share price? Well, as I write, the shares are trading for 127p. At this time last year, the shares were trading for 118p, which is a 7% increase over a 12-month period.

I view the grocery business as a defensive option. Despite the current macroeconomic outlook and cost of living crisis, people need to eat. This tells me that retailers will need the kinds of properties in Supermarket Income REIT’s portfolio.

As well as favourable market conditions, Supermarket shares carry an enticing dividend yield of close to 5%. This is higher than the FTSE 100 average of 3%-4%. The shares also look good value for money right now with a price-to-earnings ratio of just nine.

Finally, Supermarket’s performance historically has been excellent. I do understand that past performance of UK shares are not a guarantee of the future, however. Looking back I can see it has grown revenue and profit year on year for the past four years.

I have owned Supermarket shares for some time now and may add more soon to boost my passive income stream.

Stock #2

The second stock is Primary Health Properties (LSE:PHP). It is a REIT that specialises in the purchase, development, and ownership of primary healthcare premises in the UK and Ireland. An example of this is GP surgeries.

Let’s look at Primary’s share price now. As I write, the shares are trading for 136p. At this time last year, the shares were trading for 157p, which is a 13% drop over a 12-month period.

I believe Primary Health Properties has defensive attributes too. Healthcare demands have only increased in the UK and Ireland due to an ageing and growing population. If Primary Health Properties can continue to provide quality locations, it should continue to yield rental income and boost returns in the form of dividends for passive income seekers like myself.

So what about the dividend yield? Well, the shares have a yield of 4.5% currently, which is also higher than the FTSE 100 average. The shares are a bit more expensive than Supermarket Income, on a price-to-earnings ratio of 14.

Primary also has a good track record of performance. Looking back I can see it has grown revenue and profit for the past three years in a row.

Like Supermarket Income and many of my UK shares that pay a dividend, I intend to hold my position in Primary Health Properties for the long term to boost my passive income stream.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Jabran Khan owns shares in Supermarket Income REIT and Primary Health Properties. The Motley Fool UK has recommended Primary Health Properties. 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

Investing Articles

With inflation at 9%, here are the stocks I’d buy now

Inflation is creating all kinds of problems in the global economy right now. But not all companies will be impacted…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

3 easy actions that could boost my stock market returns

The UK stock market is going through a sticky patch so this Fool is looking for ways to improve his…

Read more »

Hispanic man using laptop in home office and drinking coffee
Investing Articles

Boohoo shares: time for me to admit defeat?

This Fool is nursing heavy losses from his Boohoo Group (LON: BOO) shares. Should he sell up and move on?

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

6% dividend yields! 2 cheap UK shares to buy in July

Harshil Patel considers two cheap UK shares paying fairly high dividends. He'd consider them for his Stocks and Shares ISA.

Read more »

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »