At first glance, Lloyds Banking Group (LSE: LLOY) looks like a great stock to generate passive income.

With the share price at just over 59p, the projected dividend yield for 2025 is around 5.8%. Shareholders have enjoyed a good run so far in 2024.

I think it may have been due to the general belief that the economy was improving.

I’m struggling with earnings

However, Lloyds is a cyclical business and a glance at its financial records over many years shows that profits and cash flows are inconsistent.

I worry that after a growth cycle, business could fall at some point. After all, City analysts expect profits to rebound next year after a weaker period in 2024. But even after the predicted growth in 2025, profits will only return to the levels first reached in 2021.

Are profits actually looking like they’re peaking? It’s possible. But overall, it’s the heightened uncertainty surrounding Lloyds that’s keeping me away. However, the business and the shares could do well for shareholders in the years ahead. If the increasingly benign general economic conditions we’re seeing continue, Lloyds could prove to be a decent investment.

For me, however, there are better options to pursue. For example, I am interested Supermarket REIT Income (LSE:SUPR).

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The company is a British real estate investment trust that, as its name suggests, focuses on food properties.

It’s not a pulse-pounding stock or business, but that’s the point. I believe the company operates in a stable and sustainable sector, which leads to steady cash flow streams.

Impressive dividend record

That’s exactly what it takes to pay investors a steady income in the form of dividends. Indeed, the long-term record here is impressive, with a dividend annual growth rate (CAGR) of around 34%.

Investing in real estate obviously comes with risks. We’ve seen substantial swings in real estate values ​​over the decades, and in that sense it’s a cyclical sector, which adds a little more risk for shareholders.

However, Supermarket Income REIT has weathered the pandemic well and, unlike many other companies, has continued to pay out to shareholders.

One of the biggest advantages is that the company’s tenants are defensive businesses. People have to shop for groceries, no matter what happens in the economy.

In March, the company issued an upbeat statement on the outlook. Chairman Nick Hewson said the UK food sector had shown “strong immunity” to a complex macroeconomic environment.

Company tenants “continue to grow”strengthening its financial and operational performance by placing multi-channel supermarkets at the heart of its operations, Hewson said.

We will learn more about the company’s full-year financial results, which are due to be released on September 18.

In the meantime, with the share price at around 75p, the projected dividend yield for 2025 is around 8%. I think this looks attractive and would be worth considering now as I do some more research with a view to owning a few shares to add to my diversified portfolio.