I’m building a list of dividend stocks I hope to buy to boost my passive income in the New Year. Here are several whose market-beating dividend yields have recently grabbed my attention.
Each carries a forward yield that beats the 3.8% average for FTSE 100 shares.
Go with the flow
Dividend yield: 6%
The threat of persistently high inflation remains a danger for debt-heavy utilities like Pennon Group. But better-than-expected CPI data as 2023 draws to a close suggests that welcome, profits-boosting Bank of England rate cuts could be around the corner.
I like water suppliers such as this one because of their defensive operations. Not only is water demand largely unaffected by broader economic conditions, companies like this FTSE 250 firm also have a monopoly on what they do.
This could make it a perfect stock to consider buying in these uncertain economic times.
Metals mammoth
Dividend yield: 4.1%
Predictions of weak global growth in 2024 is a bad omen for cyclical stocks like miner Glencore. Signs of mounting stress in China’s economy are especially concerning given the country’s role as a major commodities consumer.
But this shouldn’t impact this FTSE 100 share’s ability to continue paying market-beating dividends, a view shared by City analysts. This is thanks in large part to the company’s strong balance sheet. Its net-debt-to-adjusted-EBITDA ratio clocked in at just below 0.2 as of June.
This is a UK share I’d think about buying then holding for the long term. I expect profits to rise steadily as factors like the growing green economy and emerging market urbanisation boost commodities demand.
Safe as houses?
Dividend yield: 4.8%
Residential landlords like The PRS REIT will also benefit from a likely fall in interest rates. They can also expect rental income to continue shooting higher as the UK’s property shortage steadily worsens.
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Data from the ONS recently showed private rent growth picked up again in November, to 6.2%. This was the fastest rate since records began in 2006. Tenant costs are widely tipped to continue rising in the New Year as the buy-to-let sector shrinks and new homes supply fails to match demand growth.
I’d consider this real estate investment trust (REIT) despite the possibility of rent collection problems.
Bluefield Solar Income Fund
Dividend yield: 7.6%
Like Glencore, investment trust Bluefield Solar Income Fund gives me an opportunity to profit from the clean energy revolution. I think recent share price weakness that has turbocharged its dividend yield presents an attractive dip-buying opportunity.
This renewables stock is focused on solar energy, although in recent times it has widened its strategy to include onshore wind, hydro and energy storage. This desire to diversify could give it improved growth opportunities and help to reduce risk.
Calm and cloudy weather conditions are constant risks to stock like this. But on balance I think it’s a rock-solid dividend stock to research in these uncertain times.
