In the UK, a popular way to build a passive income stream is investing in dividend‑paying companies. Many publicly listed companies share part of their profits with investors as regular cash dividends, often a couple of times a year. If you reinvest those payments while you are working, you can grow your pot faster, then later switch to taking the cash as income.

How dividends actually work

The key risk with dividends is that they’re not guaranteed. Companies can cut or cancel them if profits fall or the business needs to conserve cash. That is why it’s worth focusing on firms with a long history of paying dividends through different market cycles, such as Diageo, British American Tobacco, and British Land (LSE: BLND).

So what you want to look for in dividend stocks is a strong track record of payments, a clear dividend policy, and sufficient coverage. If too much profit is going out as dividends, a cut is more likely.

Let’s take a closer look at British Land as an example of a company that takes shareholder income seriously.

A UK property titan

British Land is a UK real estate investment trust (REIT) that owns offices, retail parks, and the big Canada Water regeneration project in London. Recent full‑year results showed underlying profit up 4%, high occupancy at 98%, and strong rental growth. That tells us tenants are paying their rent and the portfolio is still in demand.

On the income side, British Land currently offers a dividend yield of about 6.57%, with a payout ratio of roughly 50.5% of earnings. Dividends look reasonably well covered and in recent results, the dividend was neither increased nor cut, just held at 22.8p per share. 

The shares are up around 55% over the past five years, while earnings have jumped 159% year on year, suggesting the business has been recovering strongly. The market still prices the stock at only 7.9 times trailing earnings and around 0.61 times book value. That kind of discount can hint at value if the assets and rental income prove resilient.

Macroeconomics matters here. Higher interest rates hit UK commercial property hard by pushing up borrowing costs and forcing yields higher. With the Bank of England having already cut rates to 3.75%, sentiment towards quality property names like British Land is slowly improving.

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.

The bottom line

British Land is just one example of a dividend stock that’s worth considering as part of a passive income portfolio.

Of course, there are risks. A deeper UK slowdown, sticky inflation, or another spike in interest rates could put pressure on property values and rents, which may eventually feed through to earnings and dividends.

Still, it offers a mix of chunky yield, reasonable dividend cover and exposure to high‑quality UK real estate at a discount price. Add in its long record of paying shareholders and the potential benefit of easing interest rates, and it looks like a great addition to a passive income portfolio.

The post Want to earn passive income from the stock market? Here are 3 ways to identify quality dividend stocks appeared first on The Motley Fool UK.

Each trades on a rock-bottom price-to-earnings (P/E) ratio. They also carry a dividend yield that could supercharge investors’ near-term passive income. But are they really bona-fide bargains, or are they simply classic value traps?

A bright dividend share

Foresight Solar Fund (LSE:FSFL) has exceptional appeal as an income share, in my view. Cash flows are broadly stable, thanks to the defensive nature of its operations, along with its inflation-linked turnover and long-term government-backed contracts.

This has given it the strength to raise dividends every year since its IPO in 2013. Dividends are paid quarterly, too, allowing investors the chance to reinvest their income more regularly.

Today its dividend yield is an enormous 8.9%.

That’s not to say dividends are completely without risk. Power generation can dip sharply when solar radiation falls. Changes to government support could also hamper future dividend growth and yields. Yet I still feel it’s more secure than most other dividend-paying shares.

It also trades on an undemanding P/E ratio of 10.6 times.

Cyclical dangers

Real estate investment trusts (REITs) like British Land (LSE:BLND) can be great ways to source a second income. Under sector rules, a minimum of 90% of annual rental earnings should be paid out in dividends.

But I’d have significant reservations about parking my cash in this FTSE 250 share. Through its large retail portfolio spanning malls, shopping parks, and high street outlets, it faces significant structural threats like e-commerce alongside cyclical dangers. Its leisure and office outlets are also sensitive to the worsening UK economy, with the latter also under threat from the ‘work-from-home’ trend.

I prefer its plans to expand in the high-growth urban logistics sector. This has substantial long-term potential as online shopping continues to grow. But today, this forms only a small part of the company’s overall portfolio.

Not even British Land’s low P/E ratio of 5.8 times and 6.6% dividend yield are enough to encourage me to invest.

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.

Another reliable dividend stock

Primary Health Properties (LSE:PHP) is a REIT I’d prefer to add to my portfolio. I already hold its shares in my ISA, in fact. And its cheap P/E ratio of 11.2 times and high 7.3% dividend yield are tempting me to buy more.

Along with Foresight Solar, I think it’s one of the FTSE 250’s most attractive value and dividend stocks.

Like the aforementioned renewable energy stock, its operations are largely unchanged by outside economic factors. Furthermore, around nine-tenths of rents are guaranteed by government bodies such as the NHS. These benefits allow it to pay a large and growing dividend every year.

At Primary Health Properties, cash rewards have risen every year since 1998.

Future earnings and dividends could be impacted by changes to health policy. But I’m confident over the outlook here, as the UK’s rapidly ageing population drives demand for additions and upgrades to primary healthcare facilities.

The post Low P/E ratios, yields up to 9%! Are these the FTSE 250’s best value stocks? appeared first on The Motley Fool UK.

To that end, I’m always scanning the UK market for high-quality, dividend-paying shares to add to my portfolio. Lately, one area in particular has caught my attention: FTSE 250 real estate investment trusts (REITs). These property-focused companies offer consistent income potential and the added benefit of asset-backed stability.

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.

As interest rates stabilise or fall, financing for property development is likely to become more affordable, encouraging expansion. The FTSE 250 typically hosts domestically-focused companies such as specialist REITs, which are better positioned to capitalise on these trends.

Here are three such stocks to consider as part of a reliable second income over the next decade.

British Land

With a market-cap of £3.86bn, British Land (LSE: BLND) is the largest REIT on the FTSE 250 and a significant player in the UK property market. In fact, its enterprise value (EV) of £6.5bn is equivalent to some FTSE 100 constituents, such as Diploma and St James’s Place.

British Land’s 5.9% dividend yield, coupled with a low payout ratio of 40%, makes it a compelling income pick. This low ratio suggests the firm has enough earnings to weather downturns and invest in growth – key traits I look for in an income stock.

Risk-wise, it’s exposed to the broader commercial property market, which could suffer if interest rates remain high or demand for office space declines. But for now, its scale and discipline make it a cornerstone of my second income strategy.

Primary Health Properties

Primary Health Properties (LSE: PHP) is a specialist REIT with a £1.38bn market-cap, focused on leasing properties to NHS organisations and other healthcare providers. It’s a niche business with a reliable client base, helping it grow by 7.28% over the past year.

Its 6.8% dividend yield is one of the highest among REITs. However, this level of income comes with a caveat: the payout isn’t well covered by earnings. Moreover, it trades at a high price-to-earnings (P/E) ratio of 33.4, which may limit near-term growth and raise some concerns around valuation.

Still, the healthcare property sector tends to be more resilient in economic downturns. This helps balance the risk for long-term investors like me.

PRS REIT

If there’s one REIT that looks like an emerging income star to consider, it’s the PRS REIT (LSE: PRSR). With a focus on the private rental sector, it has seen its market-cap climb 50% in the past year to £630m.

Its dividend yield is the lowest of the three at 3.57%, but what stands out is the earnings coverage – over five times the payout. The trust also trades at a P/E ratio of just 5.7, which suggests it could be significantly undervalued relative to its earnings potential.

The main risk here is scale. As a smaller REIT, this firm is more sensitive to changes in tenant demand and regional property trends. But with the UK rental market remaining tight, I believe the long-term outlook’s favourable.

The post In the next 10 years, I’ll aim to earn the most second income from this area of the FTSE 250 appeared first on The Motley Fool UK.

Eyes on the prize

I’m talking about British Land (LSE:BLND). The UK-based real estate investment trust (REIT) specialises in owning, managing, and developing commercial properties.

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.

Over the past year, the stock is only up a modest 2%, with a dividend yield of 5.56%. Yet with a market cap of £4.1bn, it looks set to head to the FTSE 100 next month. Part of this comes from the fact that during the stock market fall in April, British Land didn’t experience a massive fall. I’m not surprised by this, given the nature of the sector — the REIT isn’t exposed to the impact of Trump’s tariffs.

The 11% rise in the past three months has helped to push the stock into contention. Positive soundbites coming out about new deals caused the rise. For example, in late March it got approval to redevelop Euston Tower into a whopping 560,000 square feet of workspaces and hospitality venues.

Looking ahead

Even before we get to the reshuffle, investors will have to negotiate something else. I’m talking about the full-year results that are due out on Thursday (May 22). The half-year results were positive, with a 1% increase in underlying profit. In the period in question, it leased 1.7m square feet of space, 8% ahead of estimated rental values. This demonstrated robust demand for its properties, which investors will be hoping carried forward for the rest of the year.

Assuming the results aren’t a disaster, the promotion to the FTSE 100 could bring a further boost to the share price. This is because index trackers and portfolio managers that have to own FTSE 100 companies will automatically buy the stock. Of course, FTSE 250 trackers will sell it. But the amount of money that’s focused on the FTSE 100 is much larger than on the FTSE 250. So the net impact should be positive for the share price.

Sensitive to demand shifts

The main risk I see for British Land is the section of the portfolio focused on office spaces. I just don’t see high demand going forward, with work-from-home here to stay. Therefore, I think it needs to push into other areas, even potentially residential options, to stay profitable in the long term.

Despite this concern, I think it’s well set for the year ahead. If it does get the tap on the shoulder to head to the main index, this should only benefit the company. Therefore, I think it’s an idea for investors to think about right now.

The post I think this FTSE 250 stock is primed for promotion to the FTSE 100 next month appeared first on The Motley Fool UK.

So how could an investor put £100,000 to work in order to deliver £5,000 annually? And how could it be done sustainably?

Investing wisely

It’s not just about chasing the biggest headline yield. True sustainability comes from investing in companies with a track record of increasing their dividends over time, backed by sound fundamentals and prudent management.

Over the long term, even modest annual increases can transform a good yield into a great one, especially when dividends are reinvested to compound returns.

Investors also need to remember that if a stock’s yield looks unusually high, it can sometimes signal distress rather than opportunity. That’s why it’s crucial to dig deeper. Investors must examine the company’s ability to sustain and grow its payouts. 

A key metric here is the dividend payout ratio. This measures the proportion of earnings paid out as dividends. A lower payout ratio, typically below 50%, suggests the company retains enough profit to reinvest in its business and weather downturns, while still rewarding shareholders. Conversely, a very high ratio’s typically a red flag unless earnings are due to improve substantially.

In short, putting £100,000 in a group of stocks paying an average 5% yield is ‘easy’ (even though nothing’s guaranteed with dividends until you have the money in your possession). However, by focusing on sustainability, value, and dividend growth, it’s possible to build a portfolio capable of generating a reliable £5,000 passive income that grows with time.

A stock for the job

Naturally, investors shouldn’t put all their eggs in one basket. So here’s one stock that could form an important part of a dividend portfolio, namely British Land Company (LSE:BLND), which offers a mix of attractive yield and improving fundamentals.

The current dividend yield stands at 5.8%. Despite pandemic-era volatility, dividends have grown steadily from 15p in 2021 to a projected 25p by 2027. In turn, this amounts to a 66.5% cumulative increase.

As a UK REIT (real estate investment trust), British Land’s required by law to distribute at least 90% of the tax-exempt profit from its property rental business to shareholders. With net income projected to rise from £440m in 2025 to £639.7m in 2027, the outlook’s positive.

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.

British Land stands out for its ownership of high-quality, strategically-located assets like the exclusive Paddington Central development. This prime real estate gives the company unique pricing power as any business seeking a presence in such landmark locations must lease from British Land, strengthening its negotiating position and supporting rental income.

However, key risks include sensitivity to commercial real estate markets. Shifts in office demand or retail trends, such as a rise in remote working or e-commerce, may challenge parts of the portfolio.

Of course, the counter argument is that British Land’s prime real estate’s adaptable. Over the long term, these assets can be repurposed to meet evolving market needs.

It isn’t a stock I own, but it’s interesting me so is now on my watchlist.

The post £100,000 in savings? Here’s how to potentially unlock a £5k passive income overnight appeared first on The Motley Fool UK.

There have been some big winners including Rolls-Royce and NatWest that have seen valuation gains of 92% and 85% in the last year, respectively.

However, I’m in bargain hunting mode at the moment. That means I want to find a hidden gem in the Footsie that could be a good fit for my existing portfolio.

There’s one unloved stock that has piqued my interest and I’m thinking about buying it in 2025.

Unloved REIT

British Land (LSE: BLND) is the stock in question. The real estate investment trust (REIT) has seen its share price sliding, down 8.6% in the last 12 months and 11.9% in the last three years, to £3.64 per share.

The company is one of the largest REITs in the UK, investing in a portfolio of London campuses and urban logistics assets, as well as retail parks across the country.

British Land’s strategic £1.1bn investment in retail parks in the last few years has helped boost earnings and profitability, partially offsetting challenges in the London office market.

The landlord booked a 1.7% decline in valuation for the half-year ended 30 November 2024, and analysts see its office exposure as a potential impediment to growing earnings per share (EPS) in 2025.

European Real Estate Association (EPRA) net tangible assets (NTA) is a common valuation metric in the REIT game. Notably, British Land’s EPRA NTA per share declined 4.4% to 562p on the back of its office sector exposure.

However, an increase in full-year EPS guidance to 28.1p, up from 27.9p, shows there are some green shoots emerging. Similarly, a 1% increase in the full-year dividend per share to 22.8p is good news for investors.

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.

To buy or not to buy?

There are several reasons why I’m considering buying British Land shares. For one thing, I think the office sector could perform better than expected this year.

It’s certainly an area of the property market that has been under pressure, but a falling interest rate environment and continued return-to-office trend could be supportive of a bottoming out on valuations.

I also like management’s clearly defined strategy. A recent £441m retail park portfolio acquisition from Brookfield is continuing to diversify the portfolio and reduce overall office exposure.

The key factor for me is how retail parks perform, including the recently acquired portfolio, which is fundamental to EPS growth forecasts for FY25 and beyond. Any further evidence of stabilising office valuations should also give investors comfort that the worst may be behind the REIT.

Verdict

I think British Land is an exciting prospect. There are still some big risks to buying the stock including commercial property market volatility, uncertain demand for office space and integration of its acquired retail parks.

However, I think where there’s risk there’s reward and a long-term outlook is important. The REIT would be complementary to my existing portfolio and is one that I’ll be looking at seriously when I get some spare funds.

The post Why I’m considering buying this unloved FTSE 100 stock in 2025 appeared first on The Motley Fool UK.

A lot’s going on in global markets right now, with uncertainty around interest rates and international trade agreements.

By securing a stable flow of secondary income, I can better protect myself against unexpected events. Here are three ideas to consider.

High-yield savings accounts

Lately, many investors are eyeing high-yield savings accounts amid increasing market uncertainty.

In recent months, government bond yields have become particularly attractive due to inflationary pressures. Those seeking safety believe these accounts and bonds are the best low-risk investments.

This week, the Bank of England reaffirmed the benchmark interest rate would remain at 4.75% due to rising inflation. Consequently, UK government bonds (gilts) may become popular options heading into 2025.

But while bonds or savings accounts promise steady income with minimal risk, the returns are often subpar. Such accounts seldom return more than 5%, at best.

So investors with a larger risk appetite are likely to find better returns in individual assets like dividend stocks and real estate investment trusts (REITs).

Dividend Stocks

Earning a second income from dividends has long been a popular choice among UK investors. Companies or ETFs with a long history of increasing payouts are known as Dividend Aristocrats. City of London Investment Trust is one example.

Key industries that benefited from strong dividends in 2024 were financials, REITs and consumer staples.

Despite the evolving economic landscape, many FTSE 100 and FTSE 250 stocks still have opportunities for dividend growth in 2025. Two of my favourite Footsie dividend stocks include Legal & General and British American Tobacco. Both have a solid track record of consistent growth and payments.

Real Estate Investment Trusts (REITs)

REITs are a great way to earn income from property without actually buying any real estate. 

With interest rates stabilising or possibly decreasing in 2025, REITs could rebound. Some popular UK-listed REITs are Land Securities Group and LondonMetric Property, both focusing on commercial property in London. Logistics-focused REITs like Segro and Tritax Big Box REIT prefer buying warehouses and business spaces.

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.

My top choice

One of my favourite’s right now is British Land (LSE: BLND). It’s the smallest REIT by market cap on the FTSE 100 but the one with the second-highest dividend yield, at 6.3%.

In 2002, the pandemic forced it to slash dividends in half. But before that, it had an excellent track record of increasing payments. Assuming the property market continues growing, dividends should follow suit.

Of course, there’s no guarantee that will happen. While I’m bullish on the property market in 2025, several risks remain. British Land has a fairly meaty debt pile and limited cash flow to cover it. This limits its ability to expand through acquisitions and puts it at risk of defaulting.

Still, revenue and earnings are forecast to grow through 2025, which is positive. Earnings per share (EPS) are expected to reach 56p and dividends are forecast to rise moderately to 23.6p per share in 2026.

The expected earnings growth means the current price-to-earnings (P/E) ratio of 21.5 could come down to 7.3. That suggests the current price could be significantly undervalued.

I plan to keep making regular contributions to British Land and other REITs as part of my passive income strategy in 2025.

The post 3 tried and tested ways to earn passive income in 2025 appeared first on The Motley Fool UK.

That got me thinking about setting aside a tenner each day for investing. By investing that money into a portfolio of FTSE 100 dividend shares, just how much could I theoretically generate for my retirement plans in a few decades?

Being patient

Let’s keep my £10 a day plan simple and stick to weekdays. That would give me £50 per week to play with. I will also assume no share price gains (or losses, which of course is somewhat artificial and not guaranteed), plus a 7% annual dividend yield paid out and reinvested four times each year.

Starting with £0 on day one, my portfolio is looking a bit sad. But hey, I’ve got to start somewhere, right?

After one year, my projections give me £2,712 of invested capital and a meagre £112 in annual dividends paid.

After five years of disciplined investing, that portfolio could be worth £15,654 with £980 of annual income. Not a lot to show for my hard work and savvy investing but there’s a nest egg starting to form.

Let’s fast forward a little bit. Let’s say I’ve been at this for 15 years. I wouldn’t be looking to retire just yet, which is lucky, because my hypothetical portfolio is worth £69,138 and paying £4,565 in annual dividends.

So, when can I hit the £10,000 in passive income I’m after? After 25 years that portfolio could be worth £176,189 and paying £11,742 in annual income. That’s enough for me to focus on protecting that and building towards a solid retirement in the future.

Which stocks can help me achieve this?

Clearly, the above is a simplified scenario. However, there are a number of Footsie dividend shares that have yields in the region that I’m talking about.

They include HSBC, Rio Tinto and British Land (LSE: BLND) with dividend yields of 6.6%, 6.5% and 5.9%, respectively. Among those three, I think British Land is an interesting proposition.

The company has a 97% occupancy rate and continues to be proactive in managing its portfolio. Asset disposals and acquisitions are on the agenda. With a pro forma loan-to-value ratio of 34.6% and £1.9bn in undrawn facilities and cash, I think the property company could be one to watch.

With strong outperformance against its MSCI benchmark and a healthy dividend yield, the real estate investment trust (REIT) could be one to watch.

Of course, some of its chosen sectors can be cyclical and impacted quickly, such as retail parks, so it may not be one for me to rely on in my long-term passive income plans.

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.

Wrap up

My simplified example gives me hope for the future. By setting aside just £10 each day, investing it well and enjoying a touch of luck, I think I could generate a £10,000 passive income in the future.

The post How much passive income could I generate with just £10 per day? appeared first on The Motley Fool UK.

BT Group (LSE: BT.A) is down further, with a 7.7% dip over the course of the month. I’m starting to think it could be one of the best value Footsie dividend stocks to consider buying for the long term.

Sizzling speeds

I write this as the BT Openreach engineers are making a terrible racket right outside my window. But I won’t hold that against the company.

It’ll be a little while before I can sign up. But BT is talking about bandwidth of up to 900Mb per second, which I find staggering. When I started writing for The Motley Fool, I had a 33.6kbps dial-up modem. Do I feel old!

Anyway, the point is that BT has passed the peak of its fibre broadband roll-out spend. And that means the future should be less about costs and more about revenue.

Cash cow

That has to be good for the dividend. The forecast shows 5.7% this year and rising modestly, backed by solid earnings cover.

I still don’t like BT’s high net debt, which reached £19.5bn at the end of the last full year. And the company’s pension fund deficit rose to £4.8bn, even after a £0.8bn contribution.

That could come back to bite.

But if BT can keep managing things as it’s been doing, it might continue to be a dividend cash cow.

Real estate

I like a good real estate investment trust (REIT), though they haven’t been too popular for a while. I have my eye on British Land (LSE: BLND) at the moment, with its share price down 10% in October.

It’s had a decent 12 months, but we’re still looking at a 36% loss over the past five years.

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.

Business investment

British Land is in the commercial real estate business. It has a “strategy of focusing on campuses, retail parks and London urban logistics“. And as of the last full-year report time in May, that looks to be paying off.

The biggest risk I see is in weak property values. Or, at least, a perceived weakness due to property market sentiment being low.

But the year-end net asset value per share figure came in at 562p, which is well ahead of the 399p share price at the time of writing. We’ll need to wait until 20 November for this year’s H1 update on that.

Debt funding

The trust did report a 37.3% loan to value figure with those last results. And that means there’s a fair bit of debt that needs servicing, and high interest rates haven’t helped with that.

Still, rates are likely to fall further. And forecasts show a 5.5% dividend yield, rising slowly in the next couple of years.

I fear interest rate optimism might already be built into the share price, and we could face a period of weakness.

But this one is on my shortlist too.

The post These stocks could be my favourite FTSE 100 October fallers appeared first on The Motley Fool UK.

A flash from the past

The last time we had a sharp fall in the interest rate was in 2008/09. It went from 5% in September 2008 down to 0.5% by April 2009. This was in reaction to the global financial crisis and was designed to try and stimulate demand in the economy.

At the start of September, the FTSE 100 index was at 5,595 points. A year later, it was at 5,120 points. If I fast forward another year, by September 2010 the index was broadly at the same level.

From that case, interest rate cuts didn’t cause the stock market to materially rally in the period that followed. However, there’s a key reason why I see a lot of disclaimers saying that past performance isn’t indicative of future returns.

We’re not in the same position this time around. In 2008/09, the black swan event sparked widespread panic. Right now, we’re in a period of steady (if low) economic growth. The reason for the coming rate cuts is inflation coming under control. The central bank is cutting more from a position of strength than weakness. Therefore, I think the FTSE 100 could rally in the following year, with some sectors really outperforming.

An area I’m focused on

One area that I think could do well is real-estate investment trusts (REITs). These are stocks where an investment manager owns a portfolio of properties. A good example is British Land (LSE:BLND).

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.

This REIT has a dividend yield of 5.27%, with the stock also up 42% over the past year. It owns commercial sites including campuses, retail parks and urban logistic centres. The latest annual report showed that the firm has a loan-to-value ratio of 37.3%. This means that when it looks to buy a new property, 37.3% of the price paid comes in the form of a loan from a bank.

As a result, lower interest rates should reduce the cost of these loans going forward. In turn, this means lower costs for the REIT. If the income from the rent and leases remains the same, overall profit should increase. Further, if interest rates fall and economic growth increases, the demand from tenants should also jump.

One risk is that the stock is starting to look overvalued, with a price-to-earnings ratio of 15.34. This could hamper the extent of further share price gains. Even with this risk, I’ve got the stock on my watchlist.

The post History shows this is how the FTSE 100 could react to further interest rate cuts appeared first on The Motley Fool UK.