We’re now two-thirds of the way through 2024, so it’s time for me to think about which shares to buy next year. I’m drawing up a list of dividend stocks and have recently added the following three to my shortlist.
| Company | 2025 dividend yield |
|---|---|
| Alternative Income REIT (LSE:AIRE) | 8.2% |
| Central Asia Metals (LSE:CAML) | 9% |
| Epwin Group (LSE:EPWN) | 6% |
As you can see, each of these companies provides a dividend yield way north of the 3.5% FTSE 100 average. If City forecasts are accurate, a £15,000 investment spread equally across them would provide me with an £1,155 passive income in 2025.
I think these big-paying shares will grow dividends strongly over the long term too. Here’s why I’m considering adding them to my stocks portfolio.
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The REIT
Penny stocks are usually sought after for their excellent growth potential. But in the case of Alternative Income REIT, this is a share that could prove to be a top pick for dividend income.
This particular small-cap is a real estate investment trust (REIT). As such, it must pay at least 90% of annual rental revenues out in the form of dividends.
Alternative Income rents out a wide variety of properties like hotels, gyms, hospitals and residential apartments. It also has tenants tied down on long contracts (its weighted average unexpired lease term is above 16 years).
Combined, these characteristics give the company strong cash flows across the economic cycle, a critical factor for reliable long-term dividends. That said, it’s worth remembering that earnings and asset values are sensitive to interest rate movements.
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The miner
Mining stocks often have wild dividend histories. When commodity prices drop, dividends usually follow suit as profits invariably dip.
Yet despite this danger, City analysts expect Central Asia Metals — which owns copper and lead-zinc assets in Kazakhstan and North Macedonia respectively — to still pay a large dividend in 2025.
They also expect shareholder payouts to grow the year after. I believe the business could deliver solid capital gains and rising dividends over the long term, driven by megatrends like global urbanisation and the expanding green economy.
With cash in the bank of $56.4m as of June, Central Asia Metals has a strong balance sheet to help it pay those large near-term predicted dividends.
The materials supplier
Epwin Group provides a wide range of building materials. These include doors, windows, cladding and drainpipes. As a consequence, it’s in good shape to capitalise on a possible housebuilding boom in the UK. The new Labour government has vowed to build 1.5m new homes through to 2029.
But Epwin isn’t solely dependent on the new-build market to drive profits and dividends. It also supplies considerable volumes to the repair, maintenance and improvement (RMI) market. Given the age of Britain’s housing stock, this should support earnings for years to come.
City analysts expect profits and dividends here to rise every year to 2026 at least. This is despite the danger that interest rates may remain around current highs and limit new homes demand.
