£2K buys me 220 shares in these top income stocks, both yielding over 7%

Income stocks are a great way to boost passive income. Our writer explains how £2K can help her buy two great picks with above-average yields!

| More on:

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Two income stocks I’ve been watching closely for a while are HSBC (LSE: HSBA) and Plus500 (LSE: PLUS).

If I had £2,000 to invest, I could buy a total of 220 shares in both stocks. Splitting my pot down the middle, I could snap up 165 HSBC shares at 606p per share. The other half would buy me 55 Plus500 shares at 1,787p per share.

Here’s why I like the look of both picks!


As one of the world’s leading banks, the past 12 months or so have been a tad difficult for HSBC. This is due to wide macroeconomic volatility. However, the business hasn’t been alone as many stocks, especially financial services stocks, have been impacted.

The shares have meandered up and down but are only down 1% over a 12-month period from 617p, at this time last year to current levels.

Recent turbulence has been a bit of a double-edged sword, in my view. Higher interest rates have helped boost HSBC’s coffers. At the same time, chances of defaults have increased too. Plus, HSBC’s key growth market, Asia, has been struggling due to a flagging Chinese economy. This is the main risk I’ll keep an eye on that could hurt future performance and returns.

As a long-term investor, short-term issues don’t worry me too much. HSBC’s longer-term outlook is favourable, in my opinion. Its focus on Asian markets, where there is potential for high growth, could help boost performance and returns, and where my bullishness stems from.

Finally, the shares look good value for money on a price-to-earnings ratio of just six. Plus, a dividend yield of 8% at present is attractive, and looks well covered based on the firm’s balance sheet. However, I’m conscious dividends are never guaranteed.


Online trading platform Plus500 has some key bullish traits that attract me as a passive income seeker.

Before I dive into them, it’s worth noting that the shares are on a good run in recent months. Over a 12-month period, a rise of just 2% from 1,743p to current levels looks modest. However, since October 2023, the shares are up 42% from 1,254p, to current levels.

The first bullish trait I’m drawn to is the fact that Plus500 has no debt on its balance sheet. This is crucial, as it can reinvest its profits into the business for growth, and reward shareholders well if it chooses to do so. Next, the business has an excellent record of performance and growth. However, I’m conscious that past performance is not a guarantee of the future.

There are a couple of risks I’m wary of though. Firstly, competition is ramping up in the industry. This could hurt Plus500 as it looks to enter new markets for growth. A bad move could hurt its balance sheet, and potentially returns too. The other issue is that analyst forecasts profits could come under pressure next year. I’ll keep an eye on this as it could mean dividends are cut.

Finally, a dividend yield of 7.6% and the shares trading on a P/E ratio of just seven make the investment case even more attractive for me.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Investing freedom — but inside a pension

Strapped consumers might be cutting back on investing, but they’re still keeping up their pension contributions. The only problem? A…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Forget gold! I’d rather buy these 3 FTSE high-yielders in a Stocks and Shares ISA

Gold looks like a risky investment to me as the price hits an all-time high. I'm ignoring the fuss to…

Read more »

Young female business analyst looking at a graph chart while working from home
Growth Shares

This 55p UK stock could rise more than 300%, according to a City broker

This UK stock has fallen from above 800p to below 60p. But analysts at Citi believe it’s capable of a…

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

I think this FTSE 250 trust has all the right ingredients to lock in long-term profits

Today I'm examining the prospects of a private equity investment trust on the FTSE 250 that caught my attention recently…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

2 under-the-radar UK shares investors should consider snapping up

Two UK shares have caught the eye of our writer. She explains why investors should be taking a closer look…

Read more »

Investing Articles

Are these 2 ultra-high-yielding income stocks a good buy for me?

These two income stocks often split the debate amongst investors. So what does our writer think of them as potential…

Read more »

Senior woman potting plant in garden at home
Investing Articles

5% yield! This dividend stock could be great for my retirement

Our writer explains why this dividend stock appeals to her as she’s investing to build wealth to enjoy in the…

Read more »

A young Asian woman holding up her index finger
Investing Articles

I’d aim for a second income of £1,000 a month with this super-reliable dividend stock

I think a great way to build a second income stream is by investing in dividend stocks via a Stocks…

Read more »