Investing in stocks can be a great way to get income. Over recent weeks, I’ve trawled the indices to find the best companies to add to my portfolio for their dividends. Here are three income stocks that I’d buy soon. Let’s take a closer look.
Glencore
Glencore (LSE:GLEN) has performed well over the past couple of years. The firm – a miner and producer of base metals – has seen profits increase markedly since last year. Between 2020 and 2021, the business swung from a pre-tax loss of $5.1bn to a pre-tax profit of $7.3bn.
For 2021, the firm paid a dividend of $0.26 per share. At the current share price of 417p, this equates to a dividend yield of 5.1%.
The company has been benefiting from increasing demand for base metals, especially with the war in Ukraine. Russia is a large producer of nickel, for instance, so the virtual removal of Russian-produced nickel from the market sent prices skyrocketing.
The business could also benefit from the reopening of the Chinese economy, with investment bank JP Morgan forecasting that demand for metals, like iron ore, could rise rapidly.
However, there’s always the risk that cost inflation will negatively impact Glencore’s operations.
National Grid
National Grid (LSE:NG) has also performed well recently, reporting a pre-tax profit of £3.4bn for the year ended March. This rose by 107% compared to last year.
The company – a UK-based gas and electricity supplier – paid a dividend of 50.97p per share for 2021. The shares currently trade at 1,103p, so this payment is equivalent to a current dividend yield of 4.59%.
This payment was around 3.7% greater than the previous year, indicating that company earnings rose. Much of this is down to significantly higher revenue from electricity transmission in the face of higher energy prices.
Investment bank Jefferies, however, downgraded the company from ‘buy’ to ‘hold’ because of potential regulatory pressures. These could impact on National Grid’s future balance sheets, which may ultimately be bad news for the share price.
Barratt Developments
Finally, Barratt Developments (LSE:BDEV) has an attractive dividend yield of 6.1%. This is based on the dividend payment for 2021, which was 29.4p. The shares are currently trading at 481p.
Prices in the UK housing market have continued to rise recently and Barratt – a housing developer – has benefited from this trend. The total average selling price per home in 2022, for instance, is now £300,000. In 2021, this figure was £288,800.
For the year ended June, between 2020 and 2021, pre-tax profits grew from £492m to £812m. Furthermore, the business is set to beat previous profit guidance of £1.048bn, with new forecasts ranging from £1.05bn to £1.06bn.
However, there’s the possibility that rising interest rates and the cost-of-living crisis deter potential customers from borrowing to buy houses. This could lead to a wider slowdown of the housing market.
Overall, these three firms could help me create an income stream through their dividend payments. However, dividend policies can change at any time. I’ll be adding these companies to my portfolio in the next few days and I’ll also keep a close eye on performance with a view to purchasing more shares in the future.
