8% dividend rate! Buying these UK dividend shares could provide a second income of £1,600

Featured in:

Image source: Getty Images

Invest in FTSE100 AND FTSE250 stocks can be a great way to build passive income. Established market positions and solid balance sheets give many of these companies the strength to pay sustainable dividends. Many of the UK’s top blue chips are currently offering stunning dividend yields.


Recent gains mean the average yield on FTSE 100 stocks has fallen to 3.5%. Meanwhile, the corresponding reading for FTSE 250 shares fell to 3.3%.

I think I can do better and I’m looking at the following three FTSE 250 companies to facilitate me escalate my passive income. Also included below are their market-record dividend yields and dividend growth forecasts.

Business Dividend rate in the future Expected dividend escalate
NextSolar Energy Fund (LSE:NESF) 10.9% 1%
Bank of Georgia Group (LSE:BGEO) 6.4% 20%
HICL Infrastructure (LSE:HICL) 6.6% 0%

Second income of £1,600

The average profitability of these stocks is a gigantic 8%. If the brokers’ forecasts are correct, a lump sum of £20,000 invested equally in these shares will give me a passive income of £1,600 over the next 12 months.

I am confident that they will provide steadily increasing dividends in the coming years. Here’s why I’d buy them if I had spare cash to invest today.

Turn on the power

The NextEnergy Solar Fund renewable energy stock may be considered by investors looking for reliable dividend income. This is despite the fact that maintaining and operating solar panels can be an steep, profit-cutting business.

The Fund can expect revenues to remain stable regardless of economic conditions. After all, electricity demand remains essentially unchanged even during economic downturns.

In addition, NextEnergy Solar receives UK government subsidies linked to inflation, which in turn provides additional cash flow protection.

I think the company could be a great way for investors to capitalize on the green energy revolution.

Banking star

Investing in Georgia is riskier today than it has been in many years. The ongoing political crisis in the country threatens to undermine the country’s good economic prospects.

In summary, I believe that the risk of such turmoil is embedded in Bank of Georgia’s rock-bottom valuation. Today, the bank trades at a forward price-to-earnings (P/E) ratio of just 3.7 times.

Also offering a dividend yield of almost 6%, I think Bank of Georgia offers incredible value right now.

This is another FTSE 250 stock that I believe has significant growth potential. Regional rival TBC Bankthis is illustrated by the company’s earnings growth of almost 16% in the most recent quarter (announced last week).

Real estate giant

HICL Infrastructure invests mainly in public sector related assets. This makes it vulnerable to changes in government policy and legal changes.

However, I think it’s another great way to earn reliable passive income. The contracted rents it receives from its portfolio of over 100 assets provide a steady stream of revenue that it can then pass on to shareholders.

HICL’s focus on key infrastructure such as hospitals, schools, railways and roads provides another layer of strength. These assets are in high demand at all points in the economic cycle.


Find us on

Latest articles

Related articles

See more articles

Apple overtakes Microsoft and returns as the world’s most...

(Reuters) - Apple became the world's most valuable company once again on Wednesday, dethroning Microsoft (NASDAQ:)...

If I invest £17,000 in Aviva shares, how much...

Aviva (LSE:AV) shares have lost around 6% of their value since April 2, when they traded...

Morgan Stanley will see oil prices rise this summer,...

U.S. crude oil prices rose slightly on Tuesday after the U.S. Energy...

Analysis: As Supreme Court decision approaches, legal attack weakens...

Authors: Chris Prentice and Michelle Price WASHINGTON (Reuters) - A legal attack on the U.S. Securities...

Nutanix announces receipt of notice of conversion of its...

Nutanix (NASDAQ:NTNX) on Monday announced that it had received a conversion notice from BCPE Nucleon (DE)...