Successful passive income investing involves much more than just looking at dividend yields. A dividend share might offer monster yields for today. But this will count for little if the company can’t produce reliable income over the long term.
That said, it’s possible to find shares that offer the best of both worlds. Indeed, heavy stock market volatility has made it even simpler for investors to do this. Panic selling has led to top-class dividend stocks being sold off alongside the duds.
Here are two big-yielding dividend shares that I’m considering buying right now.
ITV
Broadcasting colossus ITV (LSE: ITV) could see ad revenues sink in the near term as inflation soars and consumer spending sinks. The latest Advertising Agency/WARC bellwether report in July actually reduced its ad spend forecasts for 2023. It even warned that spending could fall 1% next year.
However, as a long-term investor, there’s a lot that I like about ITV. I think the vast sums it’s investing in its streaming platforms will reap fruit as viewer habits evolve. The company already has a great track record on this front and its ITV Hub delivered 814m streams in the first half, up 8% year on year.
I also think its development of ITV Studios into a global production giant will deliver big profits. The division already has a swathe of money-spinning hits under its belt like The Voice and Love Island that it sells for big bucks. And the company continues to execute an ambitious expansion strategy to grow the unit. It bought a majority stake in nature programme developer Plimsoll in July for a cool £103.5m.
Heavy share price weakness means ITV shares trade on a forward P/E ratio of 5.8 times. On top of this, the former FTSE 100 firm boasts a terrific 8% dividend yield for 2022. I think this makes it one of the best-value dividend stocks out there.
And what’s more, 2022’s projected dividend is covered a healthy 2.2 times by anticipated earnings. This boosts my faith that the broadcaster will meet brokers’ payout forecasts.
TBC Bank Group
There are plenty of big-yielding banks for me to choose from today. Lloyds and its 5.5% forward yield is especially popular with investors seeking long-term passive income.
But I’d rather invest my money in TBC Bank Group (LSE: TBCG). Its 8.6% dividend yield for 2022 is one reason. So is its focus on the white-hot developing market of Georgia.
This is a region where financial product penetration is low, and where personal income levels are growing rapidly. It’s a combination which helped TBC Bank’s loan book rise 14.8% in the first half from the same point in 2021.
Like ITV, TBC Bank also offers excellent all-round value despite recent share price gains. On top of that 8%+ dividend yield it trades on a forward P/E ratio of 3.7 times.
What’s more, the company’s projected dividend is covered a healthy 3.1 times by anticipated earnings. I think it’s a top buy despite the problem of rising costs.