7.3%+ dividend yields! 4 FTSE 100 and FTSE 250 shares I’d buy for a second income

I’m looking to make a big second income from UK shares. And I’m expecting these top stocks to deliver big dividends over the next decade.

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.

Young Caucasian woman holding up four fingers

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.

These top FTSE 100 and FTSE 250 shares each offer big dividend yields for 2023. Here’s why I’d buy them today to hold for at least the next 10 years if I had cash to spare.

Assura

Forward dividend yield: 7.3%

I’m expecting Assura to deliver big dividends even as the domestic economy struggles.

As the owner and operator of 600 primary healthcare facilities, the rents it receives are backed by the National Health Service. So unlike many property stocks, it doesn’t have to worry about rent defaults.

On top of this, as a real estate investment trust (or REIT), Assura has to pay at least nine-tenths of its rental profits out in the form of dividends.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The FTSE 250 company has a terrific opportunity to grow profits as Britain’s elderly population booms and healthcare demand consequently rises. It’s a top buy in my book despite the risks associated with its acquisition-based growth strategy.

Glencore

Forward dividend yield: 8.7%

The near-term outlook for commodities companies like Glencore is fraught with uncertainty. As interest rates rise and the global economy cools, demand for metals and energy products could remain very weak.

But thanks to a strong balance sheet I’m expecting this FTSE 100 miner to still pay big dividends in 2023. Net-debt-to-EBITDA clocked in at a modest 0.2 as of June. What’s more, a bright longer-term demand picture should Glencore the confidence to keep paying above-average dividends.

I’m expecting the industrial metals it produces and trades like copper, nickel and iron ore to all rise strongly as the green economy takes off and urbanisation in developing regions continues.

Bluefield Solar Income Fund

Forward dividend yield: 7.3%

Companies that are involved in power generation can be great lifeboats for investors. Electricity demand remains broadly stable even during economically challenged times like now. This gives them the confidence and the means to pay large dividends year after year.

Bluefield Solar Income Fund is one FTSE 250 share on my radar. I like this particular company as it also gives me exposure to the rapidly growing world of green energy. The firm owns more than 120 solar assets, almost all of which are located in England.

I’d buy the fund even though unfavourable weather is a constant threat that can hinder power generation.

Forward dividend yield: 8.8%

I already own Legal & General shares. And a recent surge in the firm’s dividend yield is making me consider increasing my stake.

Demand for its retirement, insurance and investment products could come under pressure if the economy remains subdued. But the FTSE 100 company’s excellent cash generation means it should still pay the large dividends brokers currently expect in 2023. Its Solvency II capital ratio rose to 230% as of June.

Like healthcare property giant Assura, I’m expecting Legal & General’s earnings to rise strongly as the older population expands. Sales volumes could surge as more and more people plan for their retirements. It also has an opportunity to grow in large markets like North America.

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 Legal & General Group Plc. 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.

More on Investing Articles

Young black man looking at phone while on the London Overground
Investing Articles

1 delicious penny stock I reckon can deliver juicy returns and growth

This food delivery penny stock has experienced a surge in performance and uptake recently. Our writer is excited by its…

Read more »

Investing Articles

If I’d bought Rolls-Royce shares the day Tufan Erginbilgiç joined here’s what I’d have now

Harvey Jones is startled by just how fast the Rolls-Royce share price has risen since its transformative CEO took over.…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

How much do I need to invest in Lloyds shares to earn income of £1,000 a year?

Harvey Jones is getting income and growth from his Lloyds shares but wished he'd bought more of them. So he's…

Read more »

Illustration of flames over a black background
Investing Articles

Down 75%! Will the Saga share price ever be loved again?

The last few years have been incredibly difficult for those watching the Saga share price. But what does the future…

Read more »

Investing Articles

What kind of return could I expect by investing £100 monthly in a Stocks and Shares ISA?

Using a Stocks and Shares ISA to avoid capital gains tax could grow a £100 monthly investment into a second…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Can strong operational momentum keep the Informa share price rising?

FTSE 100 company Informa has been performing well, but this may be just the beginning of a multi-year trend for…

Read more »

Market Movers

What’s going on with the Britvic share price?

Jon Smith flags up why Britvic's share price is surging on Friday, but believes that the company is in a…

Read more »

Cheerful young businesspeople with laptop working in office
Dividend Shares

2 super-cheap passive income shares I’m eyeing up right now

Jon Smith discusses two of his favourite passive income shares in the banking and property sectors, both featuring yields above…

Read more »