Right now, I’m on the hunt for high-quality stocks I can buy and hold for the years ahead and can also provide me with a second income.
Here are three I’m considering.
Legal & General
First up is FTSE 100 stalwart Legal & General (LSE: LGEN). I already own shares in the insurance giant. But with its stock down over 10% in 2023, I’m considering snapping up some more.
Of course, my main attraction to Legal & General is its dividend yield, which currently sits at around 8.7%, making it one of the Footsie’s largest payers.
The business has taken big strides in the past few years to increase value for shareholders. This was seen through its cumulative dividend plan, in place to finish next year. From this, it’s managed to generate over £3.5bn in dividends.
I’m not just a fan of its yield however. And with its brand recognition and diversification, I see a strong business.
The stock hasn’t recovered fully from the volatility seen earlier this year as a knock-on effect of the US banking crisis. Red-hot inflation has also impacted its assets under management figures.
However, I’m not worried about these short-term concerns. And I think it would be a solid buy.
Barclays
Sticking with the financial theme, next up is Barclays (LSE: BARC). Again, I already hold some shares in the international bank. But at a price of just 160p, I could be swayed into topping up my holdings.
The stock yields around 4.8%. And its latest results revealed a 20% hike in its interim dividend. With a new share buyback scheme also in the pipeline, it’s evident Barclays is looking to reward shareholders.
I’m also attracted to Barclays by its cheap valuation. As I write, it trades on a price-to-earnings ratio of just 4.6. Its price to book also has it as severely undervalued, sitting at around 0.4.
The business has been hit with similar issues to Legal & General. Specifically, its US operations have been flagging in recent times.
But with its low valuation and meaty yield, Barclays is certainly on my radar.
Games Workshop
Taking a turn away from the financial theme, the last on my list is Games Workshop (LSE: GAW).
The UK-based business released its half-year results earlier this month, which included news of its interim dividend rising to 50p, or £1.95 per share, for the financial year. With that, it currently yields 4.3%.
As is the case with any dividend payment, it can be cut at any time by the business. However, with the firm only using “truly surplus cash” to pay its shareholders, I’m confident they should receive a payout.
The business has experienced major growth in the last few years. And as a result, it’s now receiving deals such as the recent one it struck with Amazon.
It’s managed to successfully pass on costs to consumers as inflation continues to bite. But potential further price hikes could deter its customers.
With a loyal fan base, I don’t see this being an issue. And with potential for growth, I’m a fan of Games Workshop.
My move
I like all these stocks. And if I have some spare cash come the end of the month, I’ll strongly consider buying all three.
