Stock market

2 Second Income Shares I’ll Buy to Hold Until 2034!

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I like to buy high yielding stocks. The second income they provide gives me the financial leverage to buy more shares which can increase my profits substantially over time.

But I’m not just interested in big cash profits today. I look for stocks that can increase shareholder payouts over the long term. Here are two top stocks that I think might do the same and are considering.

PRS REIT

Property Stock PRS REIT (LSE:PRSR) has fallen in value in 2024 as hopes of an impending interest rate cut fade. Higher rates will keep the net asset values ​​(NAVs) of such companies under pressure.

But signs of falling inflation suggest rates could still fall further as 2024 progresses. The latest British Retail Consortium (BRC) data showed shop price inflation fell to 1.3% in March, from 2.5% a month earlier. It was also the lowest number since December 2021.

So now might be a good time to pick up some PRS shares. In fact, I think it could be a great stock to buy for the long term. Rents here are rising (up 11% a year from December 2023), and I’m backing them to continue to grow strongly, given the growing shortage of available properties.

Weak rates of property construction, linked to the continued exodus of private landlords, are affecting rental supply, while demand pressures are increasing as the UK’s population grows.

Such residential real estate operators can also be particularly good for dividend income. This is because their contracted rents remain strong throughout the economic cycle. Between October and December, PRS’ rent recovery stood at 98 percent.

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At 77p per share, the trust trades at a 37% discount to its NAV of 123.6p per share. It also carries a forward dividend yield of 5.1%. I think real estate investment trusts (REITs) deserve serious attention at their current value.

Octopus Renewables Infrastructure Trust

Green energy storage Octopus Renewables Infrastructure Trust (LSE:ORIT) still offers attractive overall value today.

Like PRS REIT, its share price has fallen on concerns of higher interest rates. So at 71p per share, it trades at a steep 33.4% discount to its NAV per share of 106.1p.

On top of that, Octopus currently has a hefty 8.5% dividend yield.

Renewable energy stocks can see reduced returns during calm and cloudy periods when energy production declines. But on balance, they can be more reliable dividend providers than other UK shares. This is because the demand for the electricity they provide remains largely unchanged regardless of economic conditions.

Buying Octopus shares can also help reduce the risk of adverse weather conditions affecting shareholder returns. Its wind and solar assets are spread across the UK, Ireland, Germany, Sweden and France, a feature that makes group-wide profits less vulnerable to local weather patterns.


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