For many decades, the London Stock Exchange has proved a great place for investors to make a second income. There are stacks of top-quality UK shares out there whose strong market positions and financial robustness makes them ideal candidates for large and growing dividends.
It’s fair to say that the London stock market has underperformed in 2023. Share prices have been under sustained pressure as rising interest rates have put the global economy’s timid recovery in jeopardy.
The good news is that dividend yields on many income stocks have leapt to eye-popping levels. If City dividend forecasts prove correct, investors today could make a fat second income in 2024.
Here are three excellent UK dividend shares I’m considering buying for next year. Based on current estimates, £20,000 invested equally across them would make me £1,433 in passive income.
1. ITV
FTSE 250 broadcaster ITV is under pressure as the UK economy struggles and ad revenues subsequently suffer. But as a long-term investor I’m quite excited by the company’s profits possibilities beyond today.
ITV has invested a tonne of money in technology and programming to capitalise on the streaming revolution. And it is paying off handsomely — the company said that its new ITVX viewing platform is “driving a step change in key viewing metrics and strong growth in digital advertising revenue“. Digital ad sales leapt 24% in the six months to June.
I’m also encouraged by steady expansion of the broadcaster’s impressive production unit ITV Studios. For 2024 the broadcaster carries a large 7.4% dividend yield.
2. Primary Health Properties
Real estate investment trust (REIT) Primary Health Properties could be an ideal stock for these difficult times. Not only does demand for its medical facilities remain steady at all points of the economic cycle. Almost all of the rents (89% in fact) are funded directly by government bodies.
I plan to hold this UK share for the long haul. Growing elderly populations mean that more and more primary healthcare real estate like GP surgeries will be needed. This FTSE 250 firm has a strong pipeline in Britain and Ireland to help it capitalise on this opportunity, too.
I think Primary Health Properties is a great buy despite the problem of elevated construction costs. Today the investment trust carries a meaty 7.5% dividend yeld for next year.
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3. Glencore
Mining stocks like Glencore have proved unpopular this year as metals prices have sank. More trouble could be coming as China’s economy splutters, but I still think this FTSE 100 is highly attractive.
As a major commodities producer — it supplies several important industrial metals including copper, cobalt, lead, and zinc — it is well placed to exploit a likely demand surge as the green economy takes off.
I also like Glencore because of its large raw materials trading unit. This means it carries less risk to investors than companies that concentrate solely on the high-risk mining sector. Right now Glencore shares carry a 6.6% dividend yield for 2024.
