With its rich dividend culture, the London stock market’s a great place for investors seeking passive income. Even in these uncertain times, there are hundreds of companies tipped to pay a large and growing dividend in 2025 alone.
Here are two that have grabbed my attention.
| Dividend share | Predicted dividend growth | Forward dividend yield |
|---|---|---|
| ITV (LSE:ITV) | 2% | 6.8% |
| Primary Health Properties (LSE:PHP) | 1% | 7.4% |
It’s essential to note that dividends are never guaranteed until they’ve been paid. But if broker forecasts are correct, a £20k lump sum spread equally across these dividend shares will produce a £1,420 passive income stream this year alone. That’s based on an average 7% dividend yield.
Here’s why I think passive income investors should give them a close look.
ITV
With the UK economy locked in low growth mode, commercial broadcaster ITV may struggle to improve ad revenues. Advertisers are already highly cautious, and bookings at the Love Island maker cooled in the run-up to October’s Budget.
Chances are high however, that ITV will still be able to pay the large and growing dividend that analysts expect. This year’s reward is covered 1.8 times by anticipated earnings, below the safety benchmark of 2 times.
But this figure is still pretty decent, while the FTSE 250 company also has a strong balance sheet it can use to finance dividends. Borrowings are steadily falling, and as of June the net-debt-to-EBITDA ratio was just 0.9.
ITV’s decision to repurchase £235m of its shares underlines the company’s robust financial foundations.
This is a dividend stock I think should be considered as a Hold for the long haul. I like its excellent progress its ITVX platform’s making in the streaming arena, while its ITV Studios production arm also has considerable potential as content demand ramps up.
ITV says it remains on course to double digital revenues to at least £750m over the five years to 2026 as ITVX users grow.
Primary Health Properties
Primary Health Properties is a real estate investment trust (REIT). This means it’s obliged to pay a minimum of 90% of profits from its rental operations out in dividends. In return, the business receives juicy tax breaks.
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This REIT classification on its own doesn’t guarantee a large and growing annual dividend. But it does — along with the firm’s positioning in an ultra-defensive sector — make it highly likely.
Primary Health owns and rents out frontline medical facilities like doctor surgeries. Their use remains stable at all points of the economic cycle, providing a dependable stream of rental income that can then be distributed to shareholders.
Rental collection was 99% in both 2022 and 2023, with rents also guaranteed by funding from government bodies like the NHS. This robustness means that Primary Health’s weak dividend cover of one for this year doesn’t overly concern me.
I think the FTSE 250 REIT has an exceptional long-term investment potential, as ageing populations in its British and Irish markets drive demand for healthcare properties. It’s why I hold it, despite the threat to asset values that higher interest rates pose.
