Owning shares to build a growing passive income stream is the name of the game for many investors. In my portfolio, I have a small handful of dividend stocks that I intend to hold until retirement, and possibly even beyond.
Here are three of them that I feel are worth considering.
Betting on gold and copper
The BlackRock World Mining Trust (LSE: BRWM) does exactly what it says on the tin (pun intended). It’s an investment trust run by BlackRock that invests in global mining stocks.
There are a few things I find really attractive about this one. Firstly, the managers have a lot of freedom. They can obviously invest wherever the mining opportunity is, whether that’s lithium in Chile, copper in the Congo, or gold here and uranium there. But they can also invest in miners not listed on the stock market, as well as corporate bonds.
Today, the trust has a massive 31% weighting towards gold, the price of which is rising due to unstable geopolitics, ballooning sovereign debt, and stubbornly high inflation.
I’m bullish on the price of the yellow metal long term, so this gives my portfolio exposure to it. Top gold miners it holds include Agnico Eagle Mines, Kinross Gold, and Newmont.
BlackRock World Mining also has a large weighing to copper (nearly 24%). The energy transition (EVs use up to four times more copper than petrol cars) and the rise of data centres needed for AI should continue creating huge demand for copper. The trust holds Rio Tinto and BHP, which are both big copper players.
There are risks, of course. Any severe global downturn would hammer commodity prices, putting pressure on the trust itself. Indeed, copper is often nicknamed ‘Dr Copper’, because its price tends to reflect the health of the global economy. Therefore, a sudden drop-off in demand in China is a risk.
Over a 20-year timeframe though, I’m bullish on the prices of key commodities. They’re likely to trend much higher due to supply and demand imbalances.
The dividend yield is currently 4.3%. While nothing is guaranteed, I expect to be receiving regular passive income from BlackRock World Mining for the next two decades.
Population trends
The other two stocks are Legal & General and HSBC. According to the Office for National Statistics, the number of people aged 65 and over in the UK is expected to exceed 22m over the next few decades, up from 12.7m in 2022.
In other words, the UK population is ageing rapidly. This should be a supportive trend for pensions giant Legal & General, despite its exposure to a sluggish UK economy, which is admittedly a risk to the firm’s growth.
Legal & General has a long track record of reliable dividends, and the yield is currently a juicy 8.5%.
Meanwhile, HSBC is selling off Western assets to double down on opportunities in Asia. This does present an element of risk because most of these markets are less mature and can be volatile. Again, an economic slump in China is a risk for HSBC.
However, according to asset manager Schroders, the middle-class population in Asia Pacific is expected to surge to 3.49bn people by 2030, up from 1.38bn in 2015. This means millions more people will need banking, loans, and wealth management services — exactly what HSBC specialises in.
