Investing in UK shares can be a brilliant way to make a passive income. This is because the London Stock Exchange is packed with mature, financially robust companies that have excellent track records of dividend distribution.
I’ve built a strong portfolio of British dividend stocks with my Stocks and Shares ISA. And I’m considering buying the following high-yield shares too to receive more market-beating dividends.
National Grid
Forward dividend yield: 6.2%
Investing in regulated companies like National Grid (LSE:NG) comes with certain dangers. Whenever they make large profits, calls for caps on shareholder distributions inevitably follow.
But, on balance, I believe this FTSE 100 firm is one of the most secure out there. As it is responsible for keeping Britain’s lights on, revenues flow into the company at all points of the economic cycle. Furthermore, it has a monopoly on what it does, meaning it doesn’t have to worry about competitors chipping away at its profits.
I’m backing National Grid’s dividends to grow steadily over the long term too as it builds its asset base to boost profits. Under current plans it is seeking to expand its combined UK and US portfolio by between 6% and 8% a year.
Bank of Georgia
Forward dividend yield: 7.8%
Investing in banks can be a great way to make a second income. Products like mortgages, loans, and credit cards ensure a constant flow of revenue through interest payments and other charges.
Bank of Georgia Group (LSE:BGEO) is one such company on my radar today. As a major player in Georgia’s banking sector it is well placed to exploit strong economic conditions in the country. The Asian Development Bank is tipping GDP growth of 4.5% and 5% in 2023 and 2024, respectively.
A fresh economic shock could derail earnings here. But as a long-term investor I think this FTSE 250 share has exceptional potential. Banking product penetration in Georgia is tipped to soar from current low levels as personal income levels steadily rise.
Bank of Georgia’s operating income and adjusted profit increased 18% and 29% in the first half of 2023, latest financials showed, as demand for its financial services soared.
Bakkavor Group
Forward dividend yield: 7.5%
Earnings at food producer Bakkavor Group (LSE:BAKK) remain under pressure as high ingredient prices persist. But I’d still buy the business to capitalise on the fast-growing fresh meals sector.
People are living ever-busier lifestyles, and this in turn is driving demand for healthy, pre-prepared food steadily northwards. Like-for-like revenues here rose 7.9% in the six months to June, with sales driven by higher prices and volumes as well as market share gains.
There are other things I like about buying Bakkavor shares. Demand for food producers and retailers remains broadly stable even during economic downturns. As a result, profits here tend to remain stable even during economic downturns.
I’m also a fan of the company’s wide geographic footprint that spans the UK, US, and China. This provides earnings (and therefore dividends) with an extra layer of protection.
