2 second income shares I’d buy to hold until 2034!

Looking for dividend stocks to buy and hold for the long haul? Here are two top second income shares I think might be too cheap for me to ignore.

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I love buying stocks with high dividend yields. The abundant second income they provide give me the financial firepower to buy more shares which, over time, can substantially magnify my returns.

But I’m not just interested in big cash dividends today. I’m searching for stocks that could grow shareholder payouts over the long term. Here are two top stocks I think might do just that and am considering.

The PRS REIT

Property stock The PRS REIT (LSE:PRSR) has fallen in value in 2024 as hopes of imminent interest rate cuts have receded. Higher rates will keep the net asset values (NAVs) of companies like this under pressure.

But signs of toppling inflation suggest rates could still be on course to steadily topple as 2024 progresses. Latest British Retail Consortium (BRC) data showed shop price inflation topple to 1.3% in March, from 2.5% a month earlier. This was also the lowest figure since December 2021.

So now could be a good time to snap up some PRS shares. In fact, I think it might be a terrific stock to buy for the long term. Rents here are soaring (up 11% in the year to December 2023), and I’m backing them to continue rising strongly, given the worsening shortage of available properties.

Weak property construction rates, allied with a continued exodus of private landlords, is impacting rental supply, while demand stresses are rising as the UK population expands.

Residential real estate operators like this can be especially good for dividend income too. This is because their contracted rents remain robust at all points of the economic cycle. PRS’s rent collection came in at 99% between October and December.

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.

At 77p per share, the trust trades at a near-37% discount to its NAV per share of 123.6p per share. It also carries a 5.1% forward dividend yield. I think the real estate investment trust (REIT) merits serious attention at its current price.

Octopus Renewables Infrastructure Trust

Green energy stock Octopus Renewables Infrastructure Trust (LSE:ORIT) also offers attractive all-round value today.

Like PRS REIT, its share price has toppled due to fears over high interest rates. So at 71p per share, it trades at a hefty 33.4% discount to its NAV per share of 106.1p.

On top of this, Octopus carries a giant 8.5% dividend yield right now.

Renewable energy stocks can see profits fall during calm and cloudy periods when energy generation slips. But on balance, they can be more reliable dividend providers than most other UK shares. This is because demand for the power they provide remains largely unchanged, regardless of economic conditions.

Buying Octopus shares can help reduce the risk of unfavourable weather conditions to shareholder returns too. Its wind and solar assets are spread across the UK, Ireland, Germany, Sweden and France, a characteristic that leaves profits at group level less vulnerable to localised weather patterns.

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.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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