Dividend investing: How I’d select stocks to earn guaranteed passive income now – Yahoo Finance UK

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FTSE 100 dividend payers

There are, however, two risks to investing in these stocks. One, they may still slash dividends. IMB has already done so earlier this year. BATS may feel compelled to do the same, if market conditions stay weak. Two, both companies’ share prices have been weak for a long time. With the recession now officially underway, there’s even less likelihood of improvement in tobacco shares’ prices. In other words, I have to make peace with erosion of my capital to generate a steady income. Is the trade-off worth it? Maybe not.

For consumer goods companies like ULVR and DGE, capital erosion is not a worry. Both have proven to be robust stocks over time. But they offer muted dividend yields of 3.3% and 2.7% respectively. The upside is that they are relatively dependable. Even with a small decline in revenue, ULVR reported a healthy increase in earnings per share in its latest update. This is a huge sign of dividend dependability for me. DGE’s latest results have been less robust, but it is still a profitable company, and alcohol demand can be resilient even in slowdowns. My question now is – do I necessarily have to settle for a low yield to get capital protected and dependable returns?

What should I buy?

The post Dividend investing: How I’d select stocks to earn guaranteed passive income now appeared first on The Motley Fool UK.

Manika Premsingh owns shares of easyJet. The Motley Fool UK has recommended Carnival, Diageo, GlaxoSmithKline, Imperial Brands, InterContinental Hotels Group, and Unilever. 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.” data-reactid=”40″>Manika Premsingh owns shares of easyJet. The Motley Fool UK has recommended Carnival, Diageo, GlaxoSmithKline, Imperial Brands, InterContinental Hotels Group, and Unilever. 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.

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