I’ve been buying the best high-dividend stocks to boost my passive income. Here are two whose dividend yields beat the sub-4% average for UK shares. I think they’re still brilliant buys right now.
Boxing clever
Soaring inflation is delivering a hammer blow to the UK economy. And things are looking grimmer and grimmer as economists increase their inflation forecasts.
I think investing in property stocks is a good idea to protect myself against this threat. Real estate businesses are usually able to raise rents to offset the impact of surging inflation on their cost bases. It’s why I’m considering buying more shares in Tritax Big Box REIT (LSE: BBOX).
I first bought Tritax to capitalise on growing e-commerce activity during the 2020s and beyond. The business operates a portfolio of warehouse and distribution assets across Britain. And its assets are let to global blue-chip companies like Amazon, Tesco, Ocado and Marks & Spencer. This gives me added confidence that rental income will remain stable during good times and bad.
In fact, internet giant Amazon is by far the company’s largest customer by contracted rent. In 2021, it accounted for 16.4% of total rental income.
A top REIT to buy
Construction of so-called big box storage and distribution assets continues to lag demand by a large distance. It’s a phenomenon that is expected to persist, even as e-commerce growth slows from Covid-19 levels too. So the market in which Tritax operates is tipped to keep growing strongly.
I also like REITs like this because they’re required to pay 90% of annual profits out to shareholders by way of dividends. It’s why the business sports a 4% dividend yield for 2022 and an 4.2% one for next year.
Sure, there are dividend shares with larger yields out there today. And Tritax could suffer some growth problems if it fails to identify suitable acquisitions.
But Tritax’s robust, inflation-resistant operations provides me as an investor with excellent peace of mind. All things considered, I think it’ll prove a top buy for long-term passive income.
6.4% dividend yield!
DS Smith (LSE: SMDS) is more likely to be impacted by the tough economic landscape than Tritax. This business manufactures packaging products that are used widely by e-retailers like Amazon. So trading is likely to suffer as consumer spending power falters.
However, I believe DS Smith’s cheap valuation reflects this risk. The FTSE 100 firm trades on a forward P/E ratio of 7.7 times following heavy share price weakness in 2022.
In fact, I’m thinking of buying more of its shares as a way to boost my passive income. Recent share price weakness leaves its dividend yields at a gigantic 6.1% and 6.4% for 2022 and 2023 respectively.
I believe DS Smith has a very bright long-term future. E-commerce has plenty more room for growth as the digital revolution continues. And I like the company’s commitment to growing its global footprint and improving its environmental credentials. Last year, it announced plans to double R&D spend to capitalise on soaring demand for more sustainable packaging.