Passive income is the dream of almost every investor. Who wouldn’t want to receive cash without having to do extra work? Luckily this is entirely possible through dividend investing.

Own a part of company and share its profits

Dividends are a portion of a company’s profits that are paid to shareholders. This can happen once, twice, or even four times a year and can range from just a few pennies to a couple of pounds per share owned.

Sounds great, right? Well, like any investing it comes with risks and some uncertainty. Companies are under no obligation to issue a dividend and the amount they pay may rise or fall.

Personally, I like dividend investing because I can re-invest those payments and grow my portfolio over time.

Passive income of 7% or more

The vast majority of companies pay an average of 4% yield each year. At that rate I could earn £300 per month with a portfolio of £90,000. But that same £90,000 in companies which pay 7% or higher would net me £525 a month.

Companies like Polymetal International (LSE: POLY) and Imperial Brands (LSE: IMB) offer yields like this at the moment.

Now, as a general rule, the higher the percentage yield a company offers, the less sustainable it is over the long term. So consistency is key in this field.

I’ve spoken a lot about Imperial Brands and have been impressed with its commitment to its shareholders. While its glory days seem to be behind it, the tobacco producer still takes pains to ensure that it pays some sort of dividend multiple times a year.

Polymetal International is a mining company and, unfortunately mining can be a very inconsistent business. Some years can be very good while others are devastating. It has issued at least one dividend each year since 2012 but those payments range from as little as £0.08 in 2013, to as much as £0.50 just the year before. Hardly the consistency I’m looking for.

The heavy hitters

As hard as it is to believe, there are companies that pay even higher.

M&G, a financial services company, currently offers shareholders a 9.5% dividend. The mining companies BHP Group and Rio Tinto both pay an astonishing 10.7% and 10.8% respectively.

But the king of them all, at time of writing, is the mining company EVRAZ (LSE: EVR) with a whopping 13% dividend yield. Of course EVRAZ has not paid this much every single year, but it has been fairly consistent in the cash amount, issuing an average of £0.26 per share at least twice annually since 2018.

For me though, none of these companies will be additions to my portfolio. Most of them are in mining which, is as I mentioned above, can be a very unstable sector. The two others are financial services and tobacco which are highly regulated and could continue to lose favour with the general public as fewer people take up smoking and the Bank of England looks set to increase interest rates.

However, it’s always good to see what’s available so I can plan my portfolio accordingly.

The post Passive income: 6 insanely high dividend stocks available right now appeared first on The Motley Fool UK.

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James Reynolds has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.