Stock market

2 Cheap Passive Income Shares to Consider Before It’s Too Late!

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I have been buying cheap passive income shares for my Self Invested Personal Pension (SIPP) in recent weeks. And I’m looking to continue my buying as there are signs of a new bull market developing.

Here are two top UK stocks that I think savvy investors should consider today. They trade at extremely low earnings multiples, giving them room for substantial share price appreciation in 2024 and beyond.

These bargain stocks also have market-beating dividend yields, making them attractive prospects for passive income seekers.

Healthy profits

Property stocks have been depressed over the past 12-18 months due to higher interest rates. Companies like Asura (LSE:AGR) has experienced a decline in its portfolio values, which has negatively impacted its earnings.

This particular real estate investment trust (REIT) – which allows primary healthcare centers across the UK – saw its net asset value (NAV) per share fall to 49.4p in the 12 months to March. It was down 8% year on year.

If inflationary pressures persist, interest rates may remain high. However, there is a significant possibility of a rate cut after recent inflation data.

In fact, the IMF now expects the Bank of England to cut rates three times in 2024 alone. Such moves could give Assura’s struggling share price a big boost in the coming months.

The cheap valuation certainly leaves room for fresh gains as the firm trades at a forward price-to-earnings (P/E) ratio of 12 times. This is 21.4 times lower than its five-year average.

I believe Assura also has incredible long-term growth potential. This is set to benefit from rapid growth in the UK’s elderly population, and will put pressure on existing healthcare infrastructure.

And because of REIT rules, it can provide impressive streams of passive income in the process. These companies must pay out at least 90% of annual rental profits through dividends.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content in this article is provided for informational purposes only. It is not intended to be, nor is it intended to be, any form of tax advice.

Another top deal

TBC Bank Group (LSE:TBCG) is another FTSE 250 share that offers exceptional all-round value. The Georgian bank trades at 4.2 times forward price-to-earnings (P/E) ratio, following recent weakness in share prices.

This compares to the five-year average of 6.2 times. The bank also carries an impressive 8.3% dividend yield.

Risks for TBC investors have increased in recent weeks as political unrest in the Eurasian country grows. But I would argue that the bank’s hefty price tag outweighs this high risk factor.

Healthy dip buying by bank executives in recent days underscores its attractive value at current prices. TBC Deputy Chief Executive and Chief Financial Officer Giorgi Magreishvili recently increased his stake. So is Oliver Hughes, Head of International Business.

Like Assura, I expect the business to continue to grow revenue and profitability for years to come. This will be driven by an increase in demand for financial products with increasing wealth levels in Georgia. The company’s profit growth of around 16% in the first quarter shows its immense growth potential.


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