I’m always on the lookout for stocks to buy for my portfolio. My focus is on value and dividends. These stocks provide me with a regular, albeit not guaranteed, source of income in the form of dividend payments.
I use dividend stocks as part of a compound returns strategy, but I could also take those dividends to fund my life.
So let’s take a look at three dividend stocks to help me create a supercharged second income.
The Renewables Infrastructure Group (LSE:TRIG) is a UK-based renewable energy trust. The trust has £3.7bn in assets across six European countries, having grown massively since it was established 10 years ago. The trust’s assets can generate 5.4TWh of clean, renewable power annually — enough to power 1.9m homes.
TRIG’s management also highlights the utility of its diversified portfolio, providing protection from over-concentration in individual assets, technology types, weather systems, power markets and regulatory frameworks.
The FTSE 250-listed stock currently offers a 5.5% dividend yield. That’s some way above the index average. Naturally, higher energy prices benefit this trust, and we’re seeing several benchmarks fall. But, broadly, renewable energies are among the most cost efficient — it’s a highly lucrative industry.
I’ve recently added TRIG to my portfolio.
Phoenix Group (LSE:PHNX) is a provider of insurance services offering shareholders a handsome 7.7% dividend yield. That’s one of the best of the FTSE 100.
I can also take comfort in the company’s commitment to rewarding its shareholders. It has 13 years of consecutive dividend payments. Not many companies can say that, especially after the pandemic.
The firm grows organically and by buying smaller, and older, firms. Its strong track record of delivery has been built through the consolidation of over 100 legacy insurance brands. The insurance brands are managed through to maturity.
It clearly hasn’t delivered world-beating share price growth, but it has a ‘buy’ rating from several brokers. German bank Berenberg has a price target around 23% above the current price.
Like any company, there are risks when investing, and it could suffer if the UK economy underperforms.
Hargreaves Lansdown (LSE:HL) is among my top stocks to buy right now. In fact, I’ve recently topped up my position.
The UK’s top investment platform has seen its share price fall as growth, in the post-pandemic world, slowed. Naturally, people have more to do that make trades and there’s a cost-of-living crisis to add to that.
But the company is still performing well, and that’s because of higher interest rates. The firm earns interest on customer deposits, and in this higher rate environment, that amounted to around 33% of total revenue.
I appreciate that with the current economic challenges, continuing to grow will be tough. But in the long run, I’m bullish as I see Britons increasingly taking charge of their own investments. Hargreaves offers the perfect platform for this.
The post 3 stocks to buy for a supercharged second income! appeared first on The Motley Fool UK.
We think earning passive income has never been easier
Do you like the idea of dividend income?
The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?
If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…
Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.
What’s more, today we’re giving away one of these stock picks, absolutely free!
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
- 2 stocks investors should buy for a second income!
- This FTSE 100 stock looks like a value trap
- FTSE 100 shares are still cheap! 2 stocks on sale that I’d buy today
- I’d buy these FTSE 100 shares to earn a second income
- 2 FTSE 100 shares to buy now at 52-week lows
James Fox has positions in Hargreaves Lansdown Plc, Phoenix Group Holdings, and Renewables Infrastructure Group. The Motley Fool UK has recommended Hargreaves Lansdown 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.