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Here are 2 of my best stocks to buy for passive income

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I’m keen to boost my passive income in the weeks ahead should I have any spare cash, so I’m on the lookout for quality stocks with reliable dividend yields.

Here are two piquing my interest.

A staple in my portfolio and my top pick is Legal & General (LSE: LGEN). The stock’s taken a bit of a beating this year, down around 13%. But for me, I think now may be the ideal time to buy.

The stock’s price has experienced a patch of volatility following the release of the firm’s half-year results earlier this month. This was fuelled by the effect of rising interest rates, a consistent theme in recent times.

I’m mainly drawn to Legal & General from a passive income perspective. And with a 9% dividend yield, it’s clear to see why. This places it firmly among the FTSE 100’s best returners.

In the past few years, the firm’s also made a large drive to boost shareholder rewards. This is epitomised by its cumulative dividend plan, of which it provided a positive update in its latest release. Since its inception in 2020, its generated £3.6bn in dividends.

What’s more, analyst predictions forecast dividend growth for the next five years. And with last year’s payout covered nearly 2 times by earnings, it seems the firm has room to grow.

Of course, I’m aware that in the months ahead the stock may put up a slightly weaker performance. With interest rates expected to be hiked again, and with the financial sector being in a fragile position, I’m expecting bouts of volatility.

But I’m a Fool. And therefore I think in years, not months. With that in mind, I see Legal & General as a winner.

Games Workshop

A close second on my watchlist is Games Workshop (LSE: GAW). Unlike Legal & General, its posted a strong performance year-to-date, rising an impressive 20%. What’s more, the last few years have seen the business experience exciting growth.

This starts with its dividend yield, which has risen by nearly 20% a year on average in the past decade. This growth has cumulated in the company offering investors a yield of just over 4%.

Elsewhere, its also posted consistent sales increases. And despite the cost-of-living crisis squeezing the pockets of consumers, it recorded a 13% jump in the latest financial year.

With competition and cheaper alternatives to its miniature soldiers on the rise, the business has been diversifying its revenue streams. The most noticeable of these is its upcoming streaming series on Amazon, exposing the brand to millions of potential customers.

With the deal still in the pipeline, there’s always the threat it could fall through. Should costs continue to rise, the business may struggle to continue passing on costs to customers.

However, with impressive growth and a solid yield, the long-term outlook remains strong.

My move

Buying these stocks for a passive income is a great way for me to put my money to work with minimal effort. Should I have the cash in the weeks ahead, I’ll be looking to snap up these two.

The post Here are 2 of my best stocks to buy for passive income appeared first on The Motley Fool UK.

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More reading

  • I’d buy 10,228 shares of Legal & General stock for £2,000 in yearly passive income
  • 2 cheap FTSE 100 stocks to buy for the next stock market crash?
  • 2 of the best dividend shares to buy now for UK investors?
  • 3 of the ‘safest’ dividend stocks on the planet
  • 9% yield! My once-in-a-decade chance to buy this dirt cheap FTSE 100 dividend stock

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has positions in Legal & General Group Plc. The Motley Fool UK has recommended and Games Workshop Group 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.