2 dividend stocks I’d buy to target a £1,220 passive income even during a recession!

A lump sum investment in these dividend stocks could provide a large and growing passive income even as the global economy splutters.

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Global stock markets are on the defensive as signs of a potential US recession emerge. Shares across the London Stock Exchange have slumped as worries over potential returns from growth and dividend stocks mount.

Goldman Sachs now puts the chances of a US recession at 25%, up from 15% previously. JPMorgan’s even more pessimistic after last week’s poor jobs data. It puts the odds at just 35%, up from 25%.

This suggests that investors depending on dividend income, whether for their investment strategy or daily needs, should carefully consider which stocks to choose.

Should you invest £1,000 in AstraZeneca right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca made the list?

See the 6 stocks

In this environment, it might be wise for me to focus on companies that have:

  • Robust positions in sectors that are largely unaffected by the economy, such telecommunications, utilities, defence, healthcare and consumer staples
  • Strong balance sheets, typified by low debt levels and healthy cash flows
  • Moderate dividend payout ratios, for instance between 40% and 60%. This might provide scope for dividends to be maintained (or increased) even if profits fall
  • Competitive advantages (‘economic moats’) that help them remain profitable even in difficult times. Examples include strong brands, patented products, and cost advantages

A £1,220 second income

This narrows the number of stocks I have to choose from. However, it doesn’t mean I don’t have good opportunities to make a strong passive income.

There remain hundreds of top UK stocks in good shape to pay a large (and potentially growing) dividend regardless of economic conditions. Here are just two of them:

CompanyPredicted dividend growthDividend yield
The PRS REIT (LSE:PRSR)3%4.8%
Greencoat Renewables (LSE:GRP)6%7.4%

If broker forecasts are correct, a £20,000 lump sum invested equally across these shares would provide an £1,220 passive income over the next 12 months.

Here’s why I’d buy them if I had spare cash to invest.

The PRS REIT

The PRS REIT’s a rock-solid income stock, in my book. It’s maintained dividends even during the ongoing cost-of-living crisis. And in the current financial period (to June 2025) it’s tipped to start growing them again.

This is thanks to its focus on the residential property market. Demand for housing remains stable at all points of the economic cycle. In fact, the business is benefitting from strong rental income growth as property shortages persist. Like-for-like rents here jumped 11.7% in the three months to June.

Real estate investment trusts (REITs) like this have to pay 90% of annual rental earnings or more out in dividends, which bodes well for future payouts. However, I’ll bear in mind that profits could suffer if interest rates fail to fall from current levels.

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.

Greencoat Renewables

Electricity, like accommodation, is another essential commodity whose demand remains broadly unchanged over time. So I think Greencoat Renewables could be another sound investment in these uncertain times.

This business predominantly operates wind farms in Ireland, though it also owns renewable energy assets in parts of Mainland Europe. With investment in clean energy heating up, I think the company could be a great buy for long-term dividend growth as well.

I’m concerned about the prospect of rising costs at Greencoat Renewables. Keeping wind turbines in working order is famously expensive, and this could put a dent in earnings. But, on balance, I think it could prove to be a top buy for me.

Should you invest £1,000 in AstraZeneca right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca made the list?

See the 6 stocks

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.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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