Stock market

I’m looking for passive income! Are these the best stocks to buy?

Image source: Getty Images

I’ve made solid progress over the past two years when it comes to buying stocks that will help me build a second income stream. But I have no plans to slow down.

gave FTSE 100 Where I do most of my shopping. With its average dividend yield of 3.6%, it’s easy to see why. In comparison, FTSE 250 Offers an average yield of 3.2%. Abroad, average payout from S&P 500It is only 1.4 percent.

So I stick to what I know. These two stocks look like they could be great additions to my holdings. Let me know more about them.

Phoenix Group Holdings

Where better to start than with the highest yielding business on Footsy? she is Phoenix Group Holdings (LSE: PHNX).

Its share price has struggled so far in 2024. While many shares rose, Phoenix Group was down 6.5 percent. This is also down 11.6% over the last 12 months.

But don’t worry. This now means that it offers investors a 10.6% yield. Last year, it achieved its 2025 new business cash generation target two years ahead of schedule, delivering £1.5bn.

It achieved a further cash generation of over £2bn. The balance sheet of the business is also in good condition. All these are very positive. As a result, in 2023, it increased its profit by 2.5%.

High interest rates will continue to pose a risk as they affect asset values. More broadly, the insurance sector can be very volatile. Phoenix is ​​known for being a cyclical business.

But focusing on the long term, with the UK’s aging population, the Phoenix Group looks like it could be in a strong position to benefit in the coming years. Looking ahead, analysts predict that revenue will grow by about 39 percent annually through the end of 2026.

Taylor Wempe

I have also included the house builder. Taylor Wempe (LSE: TW.) on my watch list. It has outperformed the Phoenix Group, which is up 2.8% year-to-date. In the last 12 months, it has grown by 25.7%.

This means it now has a yield of 6.5%. Last year, its payout rose 1.9% to 9.58p per share.

Homebuilders have struggled recently. Last year, Taylor Wimpey’s pre-tax profit fell 42.8% to £473.8m. The housing cost crisis has seen demand for homes drop.

Moreover, it may suffer losses in the near term due to rate cuts. Talks of cuts quickly died down in June as elections were announced. It now looks like we will see the Bank of England make the first move in August.

But when the rate falls, it should increase its share price. I am conscious of opening a position earlier to take advantage of higher yields.

Lower rates should see demand increase. Management hinted that the property market is slowly finding its footing in 2024, saying it has seen “Continued market stabilitySo some investors are optimistic that the housing sector is turning around.

With that said, these are two stocks that I will definitely be watching closely in the coming weeks.


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button