2 of the best dividend stocks to buy for passive income right now!

I’ve bought more shares in this dividend aristocrat. And I think this other income hero will be another great stock to buy when I have spare cash to invest.

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I’m searching for the best income stocks to buy during these tough times for the global economy. Here are two I think are too good to ignore.

Begbies Traynor

The UK economy is spluttering as high inflation persists and the Bank of England hikes interest rates. Unfortunately the number of companies going bust is soaring as a result.

One way I can protect my wealth in this climate is to buy shares in insolvency specialist Begbies Traynor (LSE:BEG). Latest financials this week showed organic revenues up 6% during the 12 months to April.

The firm also said its insolvency order book was up 19% year on year thanks to increased volumes of distressed companies. This supports City expectations that Begbies Traynor will continue lifting dividends for the next two years at least.

Improved payouts of 3.9p and 4.2p are anticipated for this year and next respectively. So the firm carries dividend yields of 2.9% and 3.1% for these fiscal periods.

Okay, these yields are on the decent side rather than being spectacular. But the AIM company’s solid dividend cover puts it in a stronger position to meet payout forecasts than many other UK shares. Projected dividends are covered between 2.6 times and 2.7 times for the next two years.

I feel that Begbies Traynor’s acquisition-based growth strategy will help it to grow dividends strongly over the long term, too.

Acquisitions can erode shareholder value if they go wrong. So this is a constant risk to the business. But encouragingly the insolvency specialist has a great track record on this front.

Diageo

Drinks manufacturer Diageo (LSE:DGE) is another rock-solid dividend stock to own in these uncertain times. In fact I used recent share price weakness here to buy more for my own UK shares portfolio.

The FTSE 100 firm has several layers that allow it to grow dividends each year. One of them is its leading position in alcoholic beverages, a market that remains largely immune to economic shocks. Diageo’s ability to lift the annual dividend every year for more than 30 years shows its ability to navigate tough times.

The company’s resilience is also down to its broad portfolio of leading brands. Demand for the likes of Smirnoff vodka, Guinness stout and Captain Morgan rum stays strong even when consumer spending comes under pressure.

In fact, the immense loyalty that its drinks command enables Diageo to raise prices even during such periods. Thus it can grow revenues and earnings much more effectively than most other drinks manufacturers.

Indeed, organic net sales and operating profit increased 9.4% and 9.7%, respectively, during the six months to December.

Finally, Diageo has operations in 180 markets spanning six of the world’s seven continents. This protects earnings from trading troubles in one or two regions and gives it extra strength to raise dividends.

Speaking of which, City analysts expect the firm to pay increased dividends of 84.78p and 91.76p in the years to June 2024 and 2025 respectively. This results in yields of 2.6% and 2.8%.

Projected dividends are covered a robust 2 times by expected earnings as well. I think this is a top income stock to buy even though its huge marketing costs continue to rise which poses a risk to future profits.

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 positions in Diageo Plc. The Motley Fool UK has recommended Begbies Traynor Group Plc and Diageo Plc. 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.

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