2 FTSE 100 and FTSE 250 dividend shares to consider for a passive income portfolio!
The following FTSE 100 and FTSE 250 stocks could be great ways to build a robust passive income over time. Here's why.
At 8.5%, the forward dividend yield on Legal & General (LSE:LGEN) shares is a proper show-stopper. This is twice the current average for the broader FTSE 100 (3.4%).
Truth be told, investors like me have become used to the enormous yields the company offers. Excluding pandemic-affected 2020, dividends here have risen for 13 straight years, helping it to maintain those market-beating payouts:
Legal & General's resilience is thanks in part to its broad diversification. With operations spanning insurance, asset management, and retirement products, earnings and cash flows aren't overly dependent on strength in one sector.
Furthermore, while the UK and US are critical markets for the company, its wide geographic footprint covering North America, Asia, and Mainland Europe helps cushion weakness in one territory.
Like any financial services business, Legal & General is highly sensitive to broader economic conditions, and a backdrop of high inflation and weak growth has impacted its share price performance since 2020.
This remains a risk as trade tensions disrupt economic conditions and consumer spending. But on the plus side, I'm optimistic the firm's prudent capital management and strong balance sheet should at least help it continue paying large dividends. Its Solvency II capital ratio was 232% as of December.
Over the longer term, I expect Legal & General shares to enjoy strong momentum as demographic changes — and the growing importance of financial planning — boost demand for its products.
The Brunner Investment Trust (LSE:BUT) doesn't offer the same sort of jaw-dropping yields as Legal & General shares. But one of the London Stock Exchange's greatest records of dividend growth make it worth serious attention in my book.
The FTSE 250 trust has hiked shareholder payouts for 53 years on the spin. They've kept growing despite crises like banking sector meltdowns, global pandemics, and sovereign debt crises, providing an effective hedge against inflation.
Brunner's resilience reflects its exposure to a broad range of blue-chip multinational companies. It currently holds shares in 56 different businesses, from tech giant Microsoft and card provider Visa, to oil producer Shell and energy manager Schneider Electric.
The trading location of its shares is also well spread out, as the chart below shows. This provides some protection if, say, demand for US shares continues to decline due to political uncertainty there.
I'm happy to overlook Brunner's handy-if-unspectacular 1.7% forward dividend yield. As a bonus, at £13.95 per share, the trust trades at a 2.8% discount to its net asset value (NAV) per share, adding an extra little sweetener.
Investors need to consider Brunner's current high weighting to cyclical sectors. For instance, around 23% of the trust is invested in both financials and technology stocks, leaving it somewhat vulnerable to a fresh economic downturn.
But the trust's proven long-term resilience gives me optimism that it can ride out any such trouble. It's delivered an average annual return of 10.7% since 2015.
The post 2 FTSE 100 and FTSE 250 dividend shares to consider for a passive income portfolio! appeared first on The Motley Fool UK.
More reading
5 Stocks For Trying To Build Wealth After 50
One Top Growth Stock from the Motley Fool
Royston Wild has positions in Legal & General Group Plc. The Motley Fool UK has recommended Microsoft and Visa. 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.
Motley Fool UK 2025
擷取數據時發生錯誤
登入存取你的投資組合
擷取數據時發生錯誤
擷取數據時發生錯誤
擷取數據時發生錯誤
擷取數據時發生錯誤
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
37 minutes ago
- Yahoo
5 trends that could make more money for Rolls-Royce shareholders
To say Rolls-Royce (LSE: RR) shares have made investors richer over the past few years would be an understatement. The stock has topped the FTSE 100 over two, three and five years, up 475%, 907% and 671%, respectively! I don't see Rolls-Royce generating the same returns again, especially when there's a risk of a global recession. Along with the escalating Middle East war, this could lead to a near-term reduction in travel demand. Meanwhile, the stock is pricey at 37 times forecast earnings. It's arguably due a breather after sprinting uphill so fast. However, I do think it will do well long term. Here are five reasons why I think Rolls-Royce is still worth considering. Let's start with its bread and butter, which is engines for widebody aircraft like the Airbus A350 and Boeing 787. It's not just about selling engines, of course, but the lucrative revenue that follows from keeping them running. So, the most supportive trend here is rising long-haul travel. According to the International Air Transport Association, global passenger numbers are forecast to double over the next two decades, reaching 8.6 bn by 2043. This will be driven by an exploding middle class across Asia and the Middle East. Rising international travel will obviously necessitate more planes and engines, which should underpin growth in Rolls-Royce's key civil aerospace division. Next, the firm's defence unit should benefit from Europe's forthcoming defence spending boom. This is going to cost hundreds of billions of euros, and will involve upgrading ageing fleets of jets, submarines, and military vehicles. Many EU members will require modern propulsion systems for new frigates and naval vessels, along with engines for military transport aircraft and helicopters. The European Commission aims to mobilise €800bn over four years. As things stand, UK defence firms will be able to bid for some EU defence contracts. And that will almost certainly provide opportunities for Rolls' defence division. Another big trend here is an increase in data centres, driven by the rise of artificial intelligence (AI) systems. Rolls-Royce supplies backup and mission-critical power systems for data centres. It ended last year with over 85,000 units installed, providing over 10GW of back-up power. This gave the firm a market share of around 20%. Its battery energy storage solutions are now in over 140 projects worldwide. As the AI revolution advances, many more data centres will be needed, providing growth opportunities for Rolls-Royce's power systems unit. Next, the engine maker intends to return to the single-aisle airplane market in the years ahead, preferably through a partnership. If so, this will extend the company's overall market opportunity, and CEO Tufan Erginbilgic is very keen on doing so. Finally, also looking further out, Rolls-Royce has a massive emerging market in small modular reactors (SMRs). These mini power plants can be built in factories and deployed where needed, helping countries to meet net zero commitments. In 2024, Rolls-Royce SMR was named the preferred supplier for the Czech Republic. Recently, it won the UK competition, and is in the final two in Sweden. Poland, Romania, and the Netherlands are also interested, as well as tech giants wanting to power data centres. According to IDTechEx, the global SMR market could reach $72.4bn by 2033 and $295bn by 2043. The post 5 trends that could make more money for Rolls-Royce shareholders appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Ben McPoland has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce 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. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
38 minutes ago
- Yahoo
SNB's Schlegel still ready to intervene in forex markets despite U.S. list
ZURICH (Reuters) -The Swiss National Bank is ready to intervene in foreign currency markets to hit its inflation target, Chairman Martin Schlegel said, despite Switzerland recently being added to a U.S. watch list on currency manipulation. The SNB, which cut its key interest rate to zero on Thursday, uses interest rates to steer inflation to its 0-2% target, Schlegel told broadcaster SRF. "We're also ready to be active on the currency markets," Schlegel said in the interview broadcast on Saturday. The U.S. Treasury this month put Switzerland on a list of countries being monitored for unfair currency and trade practices. Bern is seeking to avoid the 31% trade tariffs Washington has threatened against Switzerland, and Schlegel said the SNB conducts policy in the national interest. "Switzerland and the SNB are not currency manipulators," he said. "When we have intervened in the past, we have done it only to achieve our goal of price stability. Our motivation is not to gain an unfair advantage for Swiss exporters." There had been a "very good" exchange with U.S. officials the last time Switzerland appeared on the list, and there was a good understanding of why Switzerland was active in foreign currency markets, he said. Even if Switzerland did reappear on the list, that would mean further dialogue, Schlegel added. He also backed the government's proposals for stricter rules for UBS, unveiled earlier this month, which could force the bank to hold $26 billion more in core capital. "This is not a radical solution," said Schlegel. "Everyone has an interest in UBS doing well, that UBS is a strong bank and that UBS is also a bank that is strongly capitalised and well prepared in terms of liquidity." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Wall Street Journal
41 minutes ago
- Wall Street Journal
Medicaid Work Requirements Have Mostly Failed. The GOP Is Still Pushing Them.
Republicans are pushing to add Medicaid work requirements to the budget bill they are moving through Congress, saying the provisions are necessary to cut costs and get more low-income Americans back on the job. State experiments with that approach show its limits.
