I think these brilliant UK bargain shares could be a great way for me to boost my passive income. Here’s why:
Greencoat UK Wind
| Current share price | 144.5p |
| 12-month price movement | -5.5% |
| Market cap | £3.4bn |
| Forward price-to-earnings (P/E) ratio | 9.1 times |
| Forward dividend yield | 6.9% |
Renewable energy stocks like Greencoat UK Wind (LSE:UKW) can be turbulent investments at times. When the wind doesn’t blow or the sun shine, energy generation drops off and earnings can take a whack.
But I’m a patient investor, and so I’d be happy to accept these occasional troubles. This is because I think profits and dividends here could soar over the long term as clean energy demand surges.
This investment trust owns around 50 assets with a total capacity of 2GW. And it has a strong balance sheet it can use to continue growing its asset base and returning cash to its shareholders.
Indeed, in October it hiked its dividend targets for 2023 and 2024 to 10p per share. The business announced plans to repurchase £100m of its shares.
Greencoat also completed the purchase of a minority stake in the Kype Muir Extension wind farm on Monday, 11 December.
The PRS REIT
| Current share price | 79.3p |
| 12-month price movement | -8.7% |
| Market cap | £435m |
| Forward price-to-earnings (P/E) ratio | 18.9 times |
| Forward dividend yield | 5% |
Residential landlord The PRS REIT (LSE:PRSR) dropped in value in 2023 due to higher-than-normal interest rates. While this remains a threat for the New Year, declining inflation suggests things could be easier going forwards.
I’d buy this dividend share to capitalise on booming private rents in the UK. According to Hamptons, tenant costs will hit a new all-time high of £85.6bn this year.
This is no short-term phenomenon. Private rents have more than doubled from £40bn in 2010. The chronic homes shortage that has driven them higher is worsening, too, suggesting revenues at this real estate investment trust (REIT) should keep rocketing.
City analysts reckon profits will soar 36% in this financial year (to June 2024). This leaves it trades on a price-to-earnings growth (PEG) ratio of 0.5. Any reading below one indicates that a stock is undervalued.
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.
Rio Tinto
| Current share price | £54.87 |
| 12-month price movement | -5.3% |
| Market cap | £69.9bn |
| Forward price-to-earnings (P/E) ratio | 10 times |
| Forward dividend yield | 6% |
Mining stocks such as Rio Tinto (LSE:RIO) have been pulled lower by declining commodity prices. This remains a risk going into 2024 as China’s economy splutters.
Yet I think recent share price weakness represents a great dip buying opportunity for long-term investors like me. I expect prices of many industrial metals to soar over the next decade as a huge supply and demand gaps emerge.
This is in part due to the rapid rise of the green economy. Soaring demand for electric vehicles and renewable energy — and the massive investment this will require in global power infrastructure — will supercharge consumption of conductive and construction metals.
Rio Tinto’s has the financial might to capitalise effectively on this fertile landscape, too. It announced plans last week to spend $10bn per year between 2024 and 2026 on iron ore, copper, and lithium projects.
