Here’s why I think it’s a solid candidate to sit quietly in the background and churn out cash in an ISA or SIPP.

What passive income really means

Passive income is a bit like earning rent from an Airbnb — but without the leaking boiler and constant maintenance. With dividend shares, the company does the hard work, then sends you a slice of profit a couple of times a year.

The idea is simple: hold for years, let the income roll in, and ideally watch your savings grow faster than inflation. But payouts aren’t guaranteed (they can be cut), so identifying sustainable dividend payers is critical.

Why TP ICAP stands out

TP ICAP is one of the largest interdealer brokers in the UK, helping institutions from around the world trade bonds, currencies and other financial products.

In 2024, revenue edged higher to roughly £2.25bn, and profits before tax also grew, showing the core business is making solid money. On top of that, management has been confident enough to run share buybacks alongside rising dividends, which is usually a positive sign.

Now, first up, it’s important to note this is not a growth stock by any means. The share price is up a very modest 13.8% in the past five years. But here’s why income investors may want to consider it — when adjusting for dividends, its total five-year return jumps to 80%.

That equates to an annualised return on investment (ROI) of 12.47% per year.

If those numbers held, a £5,000 investment over 10 years would balloon to £17,339 (with dividends reinvested).

But let’s not get ahead of ourselves — after all, past performance is no indication of future results. Due to its excellent track record and solid cash coverage, I think the company has a better chance than others — but it’s not without risk.

Challenges ahead

TP ICAP offers specialised services that could fall out of favour if banks change how they trade. Recently, analysts have noted the potential for AI to disrupt its business model. To avoid this and other possible hiccups, it must keep innovating to meet the demands of an evolving financial landscape. 

It’s also heavily reliant on market volatility. If this dries up and trading volumes fall, profits – and eventually dividends – could come under pressure. But if history is anything to go by, I wouldn’t expect markets to remain subdued for long.

Final thoughts

There’s no such thing as guaranteed passive income in the stock market — every investment comes with some risk. Mature and well-established companies are an obvious choice for stability, but that doesn’t mean they only exist on the FTSE 100.

Every blue-chip today was once a smaller, up-and-coming business. Sometimes, identifying such stocks before they hit the big time can be the most profitable strategy.

At The Motley Fool, we’re always hunting for those hidden gems with long-term compounding potential.

The post Why I’m buying more of this FTSE 250 dividend stock for passive income appeared first on The Motley Fool UK.

The financial, mining and healthcare sectors have done particularly well, making up around 40% of the growth. But with interest rate cuts looming, banking stocks could lose their edge and gold growth could taper off, hurting mining stocks.

So what can an investor look towards in 2026 and how much is needed to target £3,500 in passive income?

Looking ahead

Economists and market pricing currently point to the Bank of England cutting rates toward roughly 3.5% by mid‑2026, with an initial cut expected this month (December) and another move in early 2026.

Some of the highest‑yielding UK income names today are in life insurance and asset management, where cash generation is less directly tied to short‑term base rate moves.

So the finance sector still commands an important part of a portfolio. But before looking at which stocks to consider, let’s crunch some numbers.

The journey to £3.5k a month

Aiming for a dividend income of £3.5k a month is a realistic goal, equating to £42,000 a year. That would require a £600,000 portfolio, working on a typical average yield of around 7%.

For investors that don’t have £600k in cash lying around, it isn’t too late to start building towards it. With a £5,000 initial investment and monthly contributions of around £500, it would take around 28 years to hit that target.

Of course, that’s no small amount a month and would require some tight budgeting — so the sooner you start, the better. With only £300 to contribute a month, it would take closer to 35 years.

Stocks to consider

To hit a 7% average yield, investors would need to aim for a mix of reliable stocks with sustainable yields between 5% and 9%. A few examples include Legal & General (9%), Admiral Group (7.6%), Primary Health Properties (7.5%), Aberdeen Group (7.5%), Investec (7%), LondonMetric Property (6.8%), TP ICAP (LSE: TCAP) (6.5%), Imperial Brands (5.9%) and OSB Group (5.7%) and Schroders (5.6%) and Rio Tinto (5%).

These aren’t just the highest-yielders but those with good payment track records, cash coverage and low debt. For instance, TP ICAP has enough cash to cover dividends 2.6 times and dividend payments only make up 70% of earnings. Its balance sheet shows debt that’s only half its equity and it has a solid return on equity (ROE) of 8.7%.

Together, these metrics reveal a company that’s operating efficiently, managing its debt responsibly and exhibiting dedication to shareholder returns.

But that doesn’t mean it comes without risk. Although TP ICAP’s niche market position gives it a wide moat, analysts have noted the possibility of AI replacing some of its products. And any major regulatory change to OTC (over-the-counter) trading rules could reduce its brokerage fee earnings and hurt profits.

Still, with group revenue up 7% in its latest results, I remain confident in the company’s directions. As such, I think it would be an ideal stock to consider for an income-focused retirement portfolio.

The post How much do you need in the stock market to target a £3,500 monthly passive income? appeared first on The Motley Fool UK.

The regular dividends paid out to shareholders for owning shares are kind of like money for nothing. And when I think about retiring on just a basic State Pension, money for nothing sounds pretty good!

But how much would I need to be comfortable – and how many dividend shares could deliver those returns?

Calculating returns

Taking into account inflation and the cost of living, an average UK citizen would need approximately £3,333 a month in 20 years or so (or £40,000 a year).

Even with a yield as high as 10%, that would require £400,000. Since most portfolios seldom achieve higher than a 7% average yield, it would need to be closer to £570,000.

By investing approximately £500 a month and reinvesting all dividends, it could take approximately 27 years to reach that amount.

A strategy

The good first step in this strategy — if not done already — would be to open a Stocks and Shares ISA. The tax benefits of an ISA can greatly maximise returns over the long run.

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. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The next step would be to build a diversified portfolio of high-yielding dividend stocks. With the right mix of stocks yielding between 5% and 9%, an average yield of 7% is achievable.

The problem is, unreliable stocks can lead to volatile yields, so it’s important to pick the right ones.

A good start is to look at the company’s track record of making payments. The best income-focused companies make their shareholder returns a top priority, and the track record shows.

A stock to consider

One stock for income investors to consider is the FTSE 250 specialised financial services group TP ICAP (LSE: TCAP). It has a 7% yield and has been paying dividends for over 20 years.

The company does a good job of balancing payouts with funding operations, ensuring the business runs smoothly. Even if profits slip, it has more than enough cash to keep covering dividends.

But like many income-focused stocks, it doesn’t experience much price appreciation — the shares are up only 30% in five years. However, with such a generous dividend, that’s sufficient as far as I’m concerned.

Helping to reaffirm its dividend sustainability, it has a healthy balance sheet showing a meaty £7.48bn in assets and comparatively low debt.

However, as always, there are risks. There’s a possibility that some of the company’s brokerage services could be rendered obsolete by AI. Although it’s working to adapt the business to meet these challenges, it’s too early to know how things will pan out.

Plus, as a key player in international markets, its profits are sensitive to volatility, inflation and interest rate changes.

Final thoughts

Typically, investors focus on large-cap FTSE 100 stocks for passive income. But in my opinion, TP ICAP stands out as a rare example of a smaller business offering long-term income stability.

To reduce risk, income investors typically build a diversified portfolio of 20 or more stocks, with some defensive and growth shares for balance.

The post How much do you need in an ISA to target a £3,333 monthly passive income? appeared first on The Motley Fool UK.

Factors to consider

Given that the index average yield takes into account all the constituents, it’s not surprising to find some high-yielding options to consider. In fact, there are half a dozen FTSE 250 companies with a yield greater than 10% right now!

Of course, simply buying the highest-yielding shares for a portfolio isn’t always the best move. This is because a yield can rise sharply when the share price falls rapidly. In this case, the dividend might not be sustainable, as it might be cut due to the problems causing the stock fall.

A happy median can be found. I think it’s reasonable to pick stocks yielding around 7%, which strikes an acceptable balance between risk and income potential. To then work out how much this can make an investor, it really depends on the level of investment and the time scale.

Talking numbers

For example, if someone put away £500 a month for 15 years with this yield, it could mean that in year 16, the person could enjoy £980 a month in income. In contrast, if the amount was reduced to £100 and left to compound for only three years, the following year it could be only £28 a month.

Typically, allowing a portfolio to compound for a longer period boosts its overall value. However, it’s worth remembering that dividends aren’t guaranteed from a company. This means that predicting income many years down the line can be tricky.

Rapidly growing income payments

One example of a stock that could be used as part of building this portfolio is TP ICAP Group (LSE:TCAP). The financial services broker currently has a dividend yield of 6.78%, with the stock down 5% in the past year.

The business makes money by acting as a financial intermediary between banks and other institutions. It earns a commission in the process, meaning that the more trades it makes, the more revenue it generates. That’s why in the latest quarterly update earlier this month, it didn’t surprise me to see revenue up 3% even compared to a strong equivalent quarter last year. The stock market has been very volatile over this period, providing plenty of opportunities for the firm.

In terms of dividends, it has a strong track record of growing payments. For example, last year it paid out 16.10p per share. This is easily over double what was paid back in 2020. Given management’s desire to keep income flowing through dividends, I don’t see any big risk of a dividend cut anytime soon.

In terms of risks, TP ICAP operates in a very competitive market on thin margins. If it loses some key clients to other firms or experiences pressure to reduce commissions to retain business, its finances overall could be impacted.

Ultimately, I think it’s an income stock worth considering for investors looking to boost passive income.

The post A dividend portfolio yielding 7% could generate this amount of monthly passive income appeared first on The Motley Fool UK.

That often leads to one of the market’s quirks: as share prices rise, dividend yields usually fall. It’s a simple relationship — the same payout spread over a higher share price means a smaller percentage return.

Take Imperial Brands as an example. Its yield’s dropped from around 8% to 6.2% this year, as the share price climbed nearly 40%. That’s great news for long-term shareholders, but it also makes the stock less appealing for those looking to buy in now.

When yields fall, income investors often start searching elsewhere for opportunities.

Of course, the opposite can also happen. When a company’s share price drops sharply, its yield can look very attractive on paper – but that’s not always a good thing. A soaring yield might signal that investors have lost confidence in the firm’s ability to maintain payouts.

For that reason, a stock that manages to hold on to a high yield while its price is rising is often worth a closer look.

Digging deeper

That’s what caught my attention this week. Zigup (LSE: ZIG), the commercial vehicle hire and accident management company operating across the UK, Ireland, and Spain, has seen its share price jump 10% in recent weeks.

Despite that rise, it’s still yielding an impressive 8%, and the dividend’s comfortably covered by earnings.

Since 2015, payouts have grown at a compound annual rate of around 6%. Analysts seem optimistic too, with the average 12-month forecast suggesting a 43% increase from current levels.

For an income-focused investor, that combination of growth potential and income looks promising. 

However, there are reasons to be cautious. Zigup’s balance sheet’s healthy for now, but margins are thin and cash flow remains minimal. If profits slip, the firm may need to extend its debt, and that could quickly put dividend payments under pressure.

In my view, that risk negates its long-term appeal as a passive income pick. It’s not that the business is in trouble, but the lack of financial flexibility leaves little room for error.

A better option?

By contrast, I think TP ICAP (LSE: TCAP) offers a stronger mix of stability and yield. Like Zigup, it’s a FTSE 250 income stock, but with far more robust financials. The group – best known for its interdealer brokerage operations – boasts twice as much equity as debt and generates consistent cash flow.

Profit margins aren’t spectacular, yet they’re sufficient to sustain a dividend track record spanning over two decades. After a brief cut during the pandemic, payouts have bounced back solidly.

That’s not to say it’s risk-free. The rapid rise of electronic and automated trading could gradually erode the company’s relevance if it fails to innovate fast enough.

Still, for now, I think it stands out as a well-managed, dependable dividend payer that income investors should consider as part of a diversified portfolio.

When it comes to dividends, a stable business often trumps a high yield. For my money, TP ICAP fits that bill nicely.

The post Up 10% this month, this FTSE 250 stock still boasts an 8% dividend yield! What’s not to like? appeared first on The Motley Fool UK.

With valuations stretched in some parts of the market, I think it’s wise to check out companies trading at discounts to their intrinsic value.

The domestic economy still feels sluggish. Inflation remains sticky, and with consumers continuing to feel the effects of the cost-of-living crisis, there’s always the risk of a downturn. That’s why I’ve been weighing up shares where the numbers suggest value’s still on offer.

To do that, I’ve leaned on valuation tools such as discounted cash flow (DCF) models and enterprise value (EV) to EBITDA. Two stocks in particular stand out to me right now.

easyJet

It’s been a tough year for easyJet (LSE: EZJ), with the share price falling around 20% since January. The most recent blow came last weekend when a cyberattack targeted European airports. Airline shares fell between 1% and 2% in the immediate aftermath, reflecting the market’s nervousness around sector risks.

Valuation-wise though, easyJet looks appealing. Analysts currently estimate the shares are undervalued by about 25% when measured against future cash flow projections. Its EV/EBITDA ratio sits at a low 2.3, while its forward price-to-earnings (P/E) ratio’s just 6.

Taken together, these numbers point to a stock that’s trading well below its potential intrinsic value.

That said, I think investors should carefully weigh up the risks. Airlines remain highly exposed to external shocks, whether that’s oil price spikes linked to geopolitical conflict or operational issues like cyberattacks. A rise in jet fuel costs, for example, can quickly erode profit margins. And as we’ve seen this week, technology vulnerabilities can also add unexpected costs and reputational damage.

Still, for investors who can stomach the volatility, I reckon easyJet’s a stock worth considering at current prices.

TP ICAP

Unlike easyJet, TP ICAP (LSE: TCAP) has held up relatively well this year, with the share price up 6.6%. The world’s largest interdealer broker plays a crucial role in facilitating trades across equities, commodities and fixed income.

In August, the stock dropped 8.1% after posting weaker-than-expected half-year operating profits. But that fall might have presented a value opportunity. Right now, TP ICAP trades at an EV/EBITDA ratio of just 2.27, alongside a forward P/E ratio of 8.6.

These figures suggest the market’s pricing in stronger earnings and cash flow in the near future, which could support further gains if performance stabilises.

Of course, there are risks to consider here too. TP ICAP is highly sensitive to global market conditions, foreign exchange fluctuations, and regulatory changes. Any dip in trading activity or shift in regulation could squeeze margins.

But overall, I think it’s a stock investors may want to check out as a potentially cheap way to gain exposure to financial markets.

Hunting for value

With the FTSE 100 still hovering near record levels, I think it’s more important than ever to be cautious. Both easyJet and TP ICAP have faced issues recently but stand out as UK shares that currently look undervalued on key metrics. 

For long-term investors willing to weigh up the risks, both offer an intriguing value opportunity that’s worth considering as we head into the fourth quarter.

The post 2 UK shares that look cheap as the FTSE trades near record highs appeared first on The Motley Fool UK.

Some of the factors at play

I’m going to assume that £500 a month is the amount that can be invested in dividend stocks. Of course, this will vary from investor to investor, but we have to start somewhere. The next factor to look at is the yield that the portfolio could offer each year.

As a benchmark, the average yield of the FTSE 100 is 3.27%. So if an investor bought a tracker index that paid out the dividends, this would be the yield. But there are stocks in the index with a yield above 8%. So with active stock picking, it could be possible to target a yield between 5% and 7%. If I included the FTSE 250, it could be possible to target a yield closer to 10%, but this would be quite high risk. I’m not sure how sustainable that level of income would be.

Another factor is the timing involved. If initial dividends can be reinvested back into the portfolio, future passive income potential rises. This is because the money can compound at a faster rate. So if an investor is happy to wait for a decade before starting to spend the income, it could result in higher income than if it were being paid after just a year or two.

A share to consider

One dividend stock that could be included in a portfolio that’s pursuing this strategy is TP ICAP Group (LSE:TCAP). The financial broker connects institutions that wish to trade different assets like stocks and bonds, taking a small fee on each trade booked. It used to make most of its money through such trading, but has recently been trying to diversify revenue via providing data and analytics to clients as well.

Over the past year, the stock is up 14%, with a current dividend yield of 6.03%. I think the dividend is sustainable going forward. It has a clear dividend policy, targeting a payout ratio of about 50% of adjusted post-tax earnings. That means the company retains enough earnings for reinvestment and paying debt interest, while also distributing half to shareholders.

The company benefits from strong cash flow given the nature of its operations. This is beneficial as it provides more cushion to pay dividends and also means there’s not a large pressure to take on a lot of debt. If the company maintains this, I don’t see pressure on the dividend in the near term.

Of course, there’s some concern that TP ICAP need to keep adapting to survive. Trading is becoming more electronic and automated. Therefore, the need for brokers is diminishing. The business is diversifying, but it needs to ensure it keeps innovating, otherwise it could struggle.

The numbers

A portfolio with an average yield of 6% and £500 a month of inflows could stack up over time. In theory, after a decade it could generate £4,620 in the following year, just from dividends. This translates to £385 a month.

The post How much passive income could you make by investing £500 a month? appeared first on The Motley Fool UK.

While plenty of names in the FTSE 100 and FTSE 250 offer steady income, I’ve been running the numbers on two that stand out. Both provide above-average yields, both look relatively cheap, and both could fit nicely into a long-term income portfolio.

The names in question? Insurance stalwart Admiral Group (LSE: ADM) and interdealer broker TP ICAP (LSE: TCAP). On the surface, they look equally tempting, but which one comes out on top?

Admiral Group

Admiral’s about as dependable as it gets in UK insurance. The company’s been selling cover since 1991 and is now firmly embedded in the FTSE 100. Its stock’s had a cracking 2025 so far. After posting upbeat interim results on 14 August, shares surged 3.3% to a record high of 3,470p and are now up 36% year to date.

Profits are equally strong. Pre-tax profit rose 67% year on year, powered by competitive pricing and an impressive performance in its UK motor business. Analysts are starting to take notice too. Last Thursday, RBC lifted its target price for Admiral from 3,800p to 4,100p.

As for dividends, they remain a major attraction. The current yield’s a juicy 5.66%, with a payout ratio of 87.4%. Payments have been uninterrupted for 20 years and have grown 86.4% year on year. That’s exactly the sort of consistency I like to see.

Valuation’s a little less appealing. The forward price-to-earnings (P/E) ratio sits at 15.6, which is higher than the market average, while the price-to-book (P/B) ratio looks downright frothy at 7.7. Debt coverage is also thin. Admiral’s still an attractive dividend machine, but an investor is clearly paying a premium.

TP ICAP

TP ICAP might not be a household name, but it’s a vital cog in global financial markets. The FTSE 250 firm specialises in interdealer brokerage, working with banks to facilitate trades across interest rates, credit, derivatives, foreign exchange, and swaps.

The share price has been steadier than Admiral’s, up 7.8% this year. Results have been mixed though. In early August, it reported weaker-than-expected first-half operating profit of £189m, sending shares down 8.1%.

Dividends however look rock-solid. TP ICAP currently yields 5.8%, with a payout ratio of 70.1%. It has 20 years of uninterrupted payments, and dividends grew 8.8% year on year. Coverage looks slightly stronger than Admiral’s.

Valuation is where things get interesting. With a forward P/E ratio of 8.7 and a P/B ratio of just under 1, the stock appears relatively inexpensive compared to its peers. Debt coverage is sufficient too, giving it a sturdier balance sheet than its rival.

My verdict

On paper, Admiral looks like the stronger performer right now. Earnings growth is impressive and analysts are still raising targets. However, the stock’s pricey, and that could limit future growth.

TP ICAP’s healthier on valuation so it’s still worth considering, but weaker results leave a question mark hanging over short-term performance.

I already own shares in TP ICAP but after crunching the numbers, I’m leaning towards Admiral as the better option for a Stocks and Shares ISA. In fact, I plan to pick up a few shares next month.

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These painful lessons forced me to rethink how I approached dividend investing. Over time, I’ve developed three core rules that guide how I build my passive income portfolio today. 

Today, I’m sharing my not-so-secret secrets so that others can avoid repeating my costly errors.

Only buy dividends covered by cash flow

I find dividends more reliable when backed by tangible cash flow. That’s why I look beyond earnings and focus on the cash dividend coverage ratio. This measures how many times free cash flow covers dividends paid. Ideally, I look for a multiple of at least two. 

Anything less could signal future strain, especially if market conditions turn.

Diversify across sectors and regions

I used to pack my portfolio with UK financials, thinking the steady dividends were a sure bet. Then a sector-wide wobble knocked multiple holdings at once. Now, I spread investments across industries — from insurance to infrastructure — and also look globally. 

That way, if one part of the economy struggles, other holdings can offset the impact.

Avoid yields above 8%

A sky-high yield can be a trap. In my experience, anything above 8% deserves intense scrutiny. Is it sustainable? Is the company carrying too much debt? If growth or cash flow coverage isn’t strong, I steer clear. 

Chasing the biggest payout often leads to disappointment when cuts arrive.

A dividend share that ticks many boxes

One stock that broadly fits these rules is TP ICAP (LSE: TCAP). This FTSE 250 company is the world’s largest interdealer broker, operating across rates, forex, commodities and equities. In other words, it sits at the heart of global markets, connecting buyers with sellers and earning fees for its role.

However, this also means it’s sensitive to trading volumes, which can fluctuate with global uncertainty. Regulatory pressures also present a risk and any sharp downturn in market activity could squeeze fees and impact profits.

It appears to navigate these risks well, as evident in its dividend policy. 

The yield currently stands at a healthy 5.66%, with a sufficient cash dividend coverage ratio of 2.9 times — comfortably covering payments. Better still, the dividend’s grown by around 8.8% a year, on average.

The company’s earnings growth has been impressive too, up 128% year on year, with revenue growing at an average pace of 2.63%. Meanwhile, its valuation also looks attractive. It has a price-to-earnings (P/E) ratio of 13.9, a strikingly low price-to-earnings growth (PEG) ratio of 0.1, and a price-to-sales (P/S) ratio under 1.

Checking the balance sheet, £6.45bn in assets overshadow liabilities of £4.37bn, and it has a conservative debt-to-equity ratio of just 0.47.

A steady, rational business

Overall, it strikes me as a well-managed operation that carefully balances profit and shareholder returns.

For those aiming to build passive income without overreaching for yield, I think TP ICAP’s worth considering. It blends reasonable growth with a solid dividend track record, underpinned by a steady business model. 

As ever, I always aim to ensure each stock is part of a well-diversified portfolio.

The post My 3 ‘secret’ rules I always follow when hunting passive income stocks appeared first on The Motley Fool UK.

Many would-be investors spend years saving and saving, thinking of the ideal day when they’ll have enough to start investing. But the truth is, any amount of money’s enough to get started.

In fact, savings often lose money over time as they fail to beat inflation. So it can be a case of chasing a never-ending goal. When calculating compounding returns over a certain time period, it becomes increasingly evident how important it is to start investing early.

Imagine an investment of £10,000 into a FTSE 100 tracker with an average 5% return. An investor that started at age 30 would have £57,000 by retirement at 65.

But an investor who began just 10 years earlier, aged 20, would end up with almost double that!

No matter the financial situation, the sooner the better!

Building a second income with investments

The key to achieving a second income through investing is with dividends. When an investor has a large enough pot of savings, the dividends alone provide a steady stream of income.

For example, £750 a month equates to £9,000 a year. Let’s take a conservative approach and assume a decent portfolio can achieve an average 6% yield. That’s how much of the total it pays out annually.

Nine grand is 6% of £150,000, so that’s how much would be needed. With only £10k, it would take a long time to reach £150k — possibly 40-45 years. Realistically, regular contributions would be needed to speed things up. By adding just £100 a month to the pot, it could reduce the time to 26 years.

How to construct a portfolio

There’s two ways to work towards a second income by investing. One option is to aim for a high growth portfolio that achieves an average of 9-10% annual returns. This is possible but risky. Another option is to opt for reliable dividend stocks and reinvest the dividends to maximise growth.

Such stocks typically see minimal price appreciation, but the reinvested dividends make up for it. I find this approach more successful.

One under-the-radar example that income-focused investors may want to consider is TPICAP (LSE: TCAP). On first inspection, it might not scream ‘high returns’, particularly as the price is down 22% in the past five years.

It’s a relatively small brokerage firm but plays a significant role in the UK financial services industry. As one of the world’s largest interdealer brokers, it provides liquidity and trade execution across multiple asset classes, including fixed income, commodities and equities. Notably, it facilitates transactions between major financial institutions, investment banks and asset managers worldwide.

At the same time, this is its biggest risk, as an economic downturn can hurt the stock.

Dividend-wise, the 6.2% yield is more than sufficient. Its long-term dividend growth was hindered by Covid but during strong economic periods, it often increased by more than 10% a year. Now at 16.1p per share, it’s the highest it’s ever been.

When considering income stocks, it’s best to opt for well-established firms in strong industries with good dividend history.

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