2 high-dividend UK shares I’d buy for a second income!

The London stock market is packed with top stocks to give my passive income a big boost. Here are two high-dividend UK shares I’m considering buying.

| 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.

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’m searching for the best high-dividend stocks to buy in September. Here are two such UK shares I think could deliver solid passive income for years to come.

Residential Secure Income REIT

I think REITs can be a great way to secure a reliable second income. In exchange for certain tax advantages, these businesses are obligated to pay 90% of annual profits out in the form of dividends.

Residential Secure Income REIT (LSE: RESI) is one such stock on my radar today. This UK share invests in residential rental properties and shared ownership homes. As a consequence I expect profits to boom as private rents charge higher.

To illustrate this point, estate agent Hamptons thinks rent increases will outpace home price rises over the next four years. It reckons tenant costs will rise 5% in both 2023 and 2024.

Rising construction costs pose a danger to Residential Secure Income REIT’s earnings. But I think the prospect of prolonged and powerful rents growth, driven by Britain’s long-running accommodation shortage, still makes it a great buy in September.

The real estate stock carries a tasty 4.7% dividend yield for the financial year ending September 2022. The dial improves to 4.8% for the upcoming year too.

Vodafone Group

Huge uncertainty surrounds Vodafone Group (LSE: VOD) as activist investor Cevian Capital pushes for change. A range of revolutionary measures, from significant boardroom changes to major consolidation in several European markets, are all reportedly on Cevian’s ‘to do’ list for the telecoms firm.

This could give Vodafone’s share price a welcome jolt after years of underperformance. But the scale the overhaul Cevian is planning also creates extra risks for shareholders.

Consolidation, for example, brings a range of dangers that could erode shareholder value. In fact, a rush for mergers and acquisitions in recent times raises raises the threat of Vodafone paying over the odds to expand.

That being said, there are still plenty of reasons to be optimistic about the FTSE 100 firm. It’s rapidly expanding its position in fast-growing areas like 5G and full-fibre broadband.

Vodafone also has a large footprint in Africa where it provides telecoms and mobile money services to around 238m customers. Africa is widely tipped to be the fastest-growing telecoms market in the world over the next two decades thanks to climbing personal wealth levels and low product penetration.

I especially like Vodafone because of its credentials as an income stock. Its lofty position in the ultra-defensive telecoms sector means that it should deliver solid dividend income during good times and bad.

The company is also a mighty cash generator. As well as giving it the means to invest in its operations for growth, this gives it the financial headroom to dole out large dividend payments year after year.

Speaking of which, Vodafone currently carries a mighty 6.7% dividend yield for this financial year (to March 2023).

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 assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Vodafone. 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.

More on Investing Articles

Investing Articles

Is the Centrica share price a compelling value play?

I'm always on the lookout for investments that might be undervalued, but is the Centrica share price as cheap as…

Read more »

Investing Articles

Down 88% since its peak! Is this one of the best UK shares to buy now?

I see lots of potential shares to buy on the UK stock market right now, but I don't see explosive…

Read more »

Investing Articles

Should investors be looking at the Barclays share price?

The Barclays share price has been in rally mode lately, but is the best still to come for new investors?…

Read more »

Investing Articles

Here’s what Stocks & Shares ISA investors are buying today!

ISA investors are piling into these UK and US stocks. But which could be the best buy right now? Royston…

Read more »

Investing Articles

2 powerful passive income stocks investors should consider snapping up

Building a passive income stream via dividend-paying stocks is possible, according to our writer, who details two picks to take…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing For Beginners

This UK stock has gained 42% since I bought it, but I think it’s still a bargain

Jon Smith outlines his reasons for thinking that a UK stock he owns has the potential to keep rallying for…

Read more »

Investing Articles

1 under-the-radar value stock I’m eyeing up for returns and growth

This Fool is looking for quality stocks at bargain prices and reckons this potentially overlooked value stock could be a…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

National Grid shares have plunged — but if I’d bought 2 years ago, would I be in profit?

National Grid shares are about 22% lower than in May, but that may just be a small blip for long-term…

Read more »