2 high-yield dividend stocks to consider for a £2k passive income in 2025

With a lump sum investment, these UK dividend stocks are worth considering for a brilliant second income this year and beyond. Royston Wild explains.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Man smiling and working on laptop

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.

Many investors are looking for ways to turbocharge their passive income in the New Year. Fortunately the London Stock Exchange is bursting with high-yield heroes following years of share price underperformance from top dividend stocks.

Here are two I think are worth serious consideration today. As we can see, the forward dividend yields on these companies sail above the 3.6% average for FTSE 100 shares.

Dividend stockForward dividend yield
iShares MSCI Target UK Real Estate (LSE:UKRE)7.7%
BlackRock World Mining Trust (LSE:BRWM)7.1%

Dividends are never guaranteed. But if broker forecasts are correct, just over £27,000* equally invested across these UK shares would deliver a £2,000 passive income this year alone.

Should you invest £1,000 in Vistry 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 Vistry made the list?

See the 6 stocks

I’m optimistic that these companies will deliver a growing dividend income over time as well. Here’s why I think they’re worth serious consideration today.

* £27,030 to be exact.

iShares MSCI Target UK Real Estate

My first pick is an exchange-traded fund (ETF) rather than an individual stock. By investing in more than 30 different assets, this particular instrument allows investors to spread risk while at the same time targeting a large passive income.

Major holdings here include Segro, Land Securities and Unite. But the fund doesn’t only invest in property stocks and real estate investment trusts (REITs). It also holds capital in fixed income securities such as gilts.

There’s a danger that returns here could disappoint if interest rates remain above recent norms. Property businesses suffer during such periods as net asset values are depressed and earnings impacted.

But I believe it could still be a great source of passive income looking ahead. This is thanks in part to its large weighting of REITs. These businesses are obliged to pay at least 90% of their annual rental profits out by way of dividends.

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.

BlackRock Mining Trust

The BlackRock Mining Trust provides the same sort risk reduction through diversification. It holds shares in more than 60 raw materials producers including industry heavyweights Glencore, BHP and Rio Tinto.

Now, parking one’s cash in commodities producers can be high-risk. Problems at the exploration, mine development and production phases can be common. And each can take a massive chunk out of company earnings.

Investing in this fund doesn’t eliminate this danger. However, it does limit the impact of issues at one or two miners on overall returns.

I also like this fund because of its exposure to a variety of metals like gold, silver, copper, uranium and aluminium. Commodity prices are notoriously volatile on a range of supply and demand issues. The fund’s wide approach type helps limit this risk.

What’s more, its balanced allocation across investment metals and industrial commodities can provide a smoother return across the economic cycle.

I think Blackrock Mining Trust could deliver solid capital gains and dividend income as the new commodities supercycle kicks off. Phenomena including renewable energy growth, the emergence of artificial intelligence (AI), and rising demand for electric cars could light a fire under global metals demand.

Should you buy Vistry now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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 positions in Rio Tinto Group. The Motley Fool UK has recommended Land Securities Group Plc and Segro Plc. 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.

Pound coins for sale — 51 pence?

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

More on Investing Articles

Dividend Shares

Why this stock market correction is great for passive income investors

Jon Smith explains why those looking for passive income from dividends could benefit from the move lower in stock prices…

Read more »

Investing Articles

The FTSE’s tanking. Here’s what I’m doing

In the blink of an eye, the FTSE has fallen more than 10% due to economic uncertainty. Here’s how Edward…

Read more »

US Stock

Apple stock is close to 52-week lows. Should I snap it up now?

Jon Smith discusses the double-digit percentage fall in Apple stock last week and weighs up whether now's the time to…

Read more »

Investing For Beginners

2 FTSE 100 gems that rallied last week as the stock market tumbled

Jon Smith flags up a couple of FTSE 100 shares that actually jumped at a time when most of the…

Read more »

Investing Articles

Glencore’s share price is 53% off its 52-week highs. Is it time to consider buying?

Glencore’s share price has tanked due to concerns over an economic slowdown. Is this an amazing buying opportunity for long-term…

Read more »

Investing Articles

Forecast: in 1 year, the Marks and Spencer share price could be…

The Marks and Spencer share price has hit its highest point since 2016 after more than doubling under the new…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 34%, does IAG’s share price look an unmissable bargain to me now?

IAG’s share price had fallen a long way even before the latest market rout, but this may mean a bargain-basement…

Read more »

Investing Articles

Forecast: in 1 year, the HSBC share price could be…

The HSBC share price is approaching a 20-year high under its new CEO as he targets $1.5bn of savings. Here…

Read more »