There are always dangers involved with share investing. Markets can go up as well as down. And surprises can spring up that can blow a company’s previously positive investment case to smithereens.

But with some detailed research, investors can significantly reduce the risk to their wealth. Here are two high-dividend stocks I’d buy with my last £5k to generate long-term passive income.

Legal & General Group

Financial services giant Legal & General (LSE: LGEN) has one of the biggest dividend yields on the FTSE 100. A figure of 8% is more than double the index average of 3.9%.

In fact, the company has a long record of paying above-average dividends. This is thanks to its exceptional cash generation, which remains impressive to this day. Cash generation leapt 22% in the six months to June, to £1bn, which in turn drove its Solvency II capital ratio to 212% from 182% previously.

Legal & General is a go-to provider for customers in the fields of asset management, life insurance and pensions. As people become more financially conscious — and especially as uncertainty over the State Pension make retirement planning more important — I expect trading activity at the company to steadily rise.

Legal & General’ share price provides excellent all-round value today. As well as that huge yield, it carries a forward price-to-earnings (P/E) ratio of just 7.3 times. I’d buy it even though the worsening economic outlook could dampen profits growth in the near term. Those impressive cash flows make it too good to miss.

Assura

Real estate investment trusts (or REITs) are popular stocks for passive income. This is because they are required to distribute nine-tenths of annual profits out by way of dividends. Moreover, the predictable rents they receive give them the means to provide regular income.

Assura (LSE: AGR) is one low-risk REIT I’d buy for my own portfolio. It owns and operates primary health properties in the UK, demand for which is growing strongly as the country’s population rapidly ages and healthcare demand grows.

Of course, healthcare is also one of those industries that is largely unaffected by broader economic conditions. This gives Assura exceptional earnings visibility and helped it become a true dividend aristocrat. Shareholder payouts here have risen for nine years on the spin.

My only concern is how possible future changes to NHS policy could hit for GP surgeries and the like. Assura currently trades on a forward P/E ratio of 18.5 times. Meanwhile, City predictions that the annual dividend will grow for a 10th straight year leave it with a large 5.3% dividend yield.

Healthcare properties

As a quick introduction, Assura is a property business that focuses on GP surgeries, primary care, and community healthcare buildings. It designs, builds, invests in, and manages these properties as well as earning rental income from them.

So what’s happening with Assura REIT shares currently? Well, as I write, they’re trading for 67p. At this time last year, the stock was trading for 74p, which is a 9% decline over a 12-month period.

A REIT with risks I must consider

Let’s consider some bearish aspects first then. As with any stock I look to buy for boosting my passive income stream, I must remember dividends are never guaranteed. These can be cancelled at the discretion of the business. Some reasons that this can occur are economic volatility, a financial crash, or a one-off, unexpected event like a pandemic. Dividends are cancelled to conserve cash.

Another issue I feel could affect Assura’s level of returns is the fact most of its buildings are used by the NHS. There is a chance that an NHS price cap for renting such facilities could be enforced. This would limit the income Assura could earn and limit returns I hope to make. This is a development I will keep an eye on.

Why I like Assura shares

So to the positives then. Firstly, I believe that Assura REIT has excellent defensive traits. This is because it provides its properties to the healthcare sector, specifically the NHS. Healthcare is a staple for all. No matter the economic outlook, healthcare services will always be needed. This demand level should continue to boost Assura’s performance and levels of returns.

Next, I can see Assura has a great track record of performance. I do understand that past performance is not a guarantee of the future, however. Looking back, I can see Assura has grown revenue and gross profit for the past four years in a row. As the UK population continues to increase, I envisage performance and returns growing as healthcare services will only increase too.

For any REIT I consider buying, I look at levels of returns. Assura’s current dividend yield stands at 4.5%. This is double the FTSE 250 average of just under 2%.

Finally, at current levels, Assura shares look decent value for money on a price-to-earnings ratio of just over 11.

To summarise, I would add Assura REIT shares to my holdings to boost my passive income. Its current yield, performance track record, as well as defensive traits help me come to my decision.

Assura

Healthcare property landlord Assura (LSE: AGR) has several things going for it as far as I can see.

The long-term demand for healthcare is likely to be resilient, which means lots of buildings such as GP surgeries and ambulance depots are still needed. The sorts of tenants that rent those premises often do so for decades on end and can be relied upon to pay their bills. That compares favourably to the scrappier end of the commercial property market.

That helps Assura to generate substantial and fairly predictable cash flows, which in turn can fund dividends. At the moment, the dividend yield on offer is 4.4%. I think that is attractive. I also like the group’s valuation. Its price-to-earnings ratio of 12 looks like fair value to me for a quality business.

What could happen to change my analysis? One risk I see is the political risk of price capping for service providers to the NHS. Even without that, the politically sensitive nature of the sector could limit the profits to be made. But Assura’s large and growing estate looks set to be a long-term money spinner to me. That is why I would consider adding the shares to my portfolio.

Dunelm

Like Assura, Dunelm (LSE: DNLM) is a member of the FTSE 250 index. But unlike Assura, its name is known to millions of people as it has a nationwide chain of homeware stores.

Is now a good time to be in homewares, given the risk that consumer belt tightening could mean less money is spent on home decoration? Obviously some investors are sceptical. That risk helps explain why the shares have plummeted 35% over the past year.

But I think a recession may actually turn out to help sales at Dunelm. It stocks a wide range of items including some at low prices could help it attract new shoppers. Inflation may eat into profit margins, although for now at least the business seems confident it can manage rising prices without hurting profitability.

The shares yield 4%. The dividend is comfortably covered and the company balance sheet looks healthy to me. At the time of its interim results, the company was sitting on net cash of £48m. Free cash flow of £106m in the first half underlined what I see as the attractiveness of Dunelm’s business model. I own the shares in my portfolio and would consider buying more in August.

Buying FTSE shares this summer to hold for years

Both of these FTSE 250 shares strike me as attractive options to add to my portfolio for the long term.

I expect more economic doom and gloom may emerge over the summer, which could offer me an even lower price to buy these two shares. But I already think they offer me attractive long-term value. I like their cash generative business models and would happily buy both.

Assura

One of the income shares I would happily tuck away in my portfolio is healthcare property specialist Assura (LSE: AGR).

The firm rents property to a range of medical care providers, from local GP surgeries to ambulance depots and NHS trusts. I expect demand for such buildings to stay high and even to grow in coming years.

The company is currently developing new projects like the West Midlands Ambulance Hub and GP surgeries in places including Brighton, Cardiff and Sutton. The sorts of tenants involved seem likely to pay their bills in my opinion, reducing the risk of rent defaults on profits.

Assura grew its pre-tax profit by 44% last year. Earnings per share were up 37% to 5.6p. That comfortably covers the annual dividend of 3.12p per share. Dividends are paid quarterly and have risen annually in recent years, although that does not necessarily mean that they will keep doing so. One risk I see is inflation in building costs eating into profit margins.

At the moment, the shares yield 4.3%. That dividend, along with the potential for ongoing business growth, means I am considering adding Assura shares to my portfolio.

ITV

I am also increasingly drawn to ITV (LSE: ITV).

The long-term decline of television advertising is a risk to the company’s future revenues and profits. But I think investors may be overemphasising that at the moment. After all, the company continues to post impressive business results.

In the first quarter, for example, total external revenue grew 18% compared to the same period last year, to £834m. Although advertising is an important part of that revenue, it is not the key driver. Non-advertising revenue was larger than advertising revenue in the quarter. But even the ad revenue grew 16% in the quarter compared to the same period last year.

It seems to me that there is a lot of money still to be made from television advertising. On top of that, ITV is clearly positioning itself for the future by developing other sources of earnings, such as producing shows it can license and sell. I expect demand for content like that to be strong in future, even if it is watched on a wider variety of devices than was the case in television’s heyday.

ITV’s dividend yield stands at 4.8%. On top of that, the shares trade on a price-to-earnings ratio of around 7. That looks cheap to me. I would consider adding ITV to my portfolio soon both for its income and growth prospects.

While dividends are never guaranteed, at the moment these three shares each pay four dividends per year, all in different months. So if I owned these three shares, I would hope to receive a dividend from one company in every month of the year.

Assura

The healthcare property operator Assura (LSE: AGR) is set to benefit from long-term demand for healthcare facilities. It builds or buys doctors’ surgeries, ambulance depots, and the like, then rents them out. Healthcare tenants can often sign long leases. I like the fact that they should typically be able to pay rent, even if there is an economic downturn that pushes up the default risk among other commercial property tenants such as retailers. One risk is rising interest rates adding costs.

Assura has increased its dividend annually in recent years and the shares yield 4.5%. The company currently pays dividends in January, April, July, and October.

Unilever

Consumer goods giant Unilever (LSE: ULVR) has been battling rising cost inflation, which threatens to eat into profits. But its portfolio of premium brands such as Domestos and Dove give it pricing power. I think that could help to offset at least some of the negative impact of inflation on profit margins.

The company’s global reach spans around 190 countries. Its presence in everyday products like soap and mayonnaise should mean enduring customer demand for the company’s brands even when the economy is weak. A phenomenal 3.4bn people use Unilever products on any given day. That is over two in five of the world’s population! The business generates substantial free cash flows that can help support its dividends.

Unilever yields 4.0% and pays out in March, June, September, and December.

British American Tobacco

Another multinational company that benefits from a premium brand portfolio is British American Tobacco (LSE: BATS). Historically the company has been a license to print money, thanks to the juicy profit margins on cigarettes.

But what of the future? A risk here is that declining cigarette sales will hurt revenues and profits. The company has mastered the art of making profits even as volumes decline in some markets, for example, by raising prices. Its range of non-cigarette products is also expected to start turning a profit in 2025. Meanwhile, the British American Tobacco dividend yield stands at 6.2%.

Dividends are paid in February, May, August, and November.

Income shares to buy now

I would happily buy all three of these shares for my portfolio. Indeed, I already own two of them.

If they continue to pay dividends on their current timetables, I could hopefully receive a dividend from one of the trio every month of the year. That could be pleasing — but it is not my main reason to consider owning these shares. More than the timing of the dividends, I like the underlying cash generation qualities of the businesses. That is what funds the dividends, after all — now and hopefully in the future, too.

Animal magic

Retailer Pets at Home Group (LSE: PETS) could suffer some stress in the short-term as the cost of living jumps. But I think it’s a top long-term buy as the amount we spend on our furry friends steadily rises. Analysts at Research and Markets think the UK pet food market for example will grow by almost 3% each year through to 2026.

Pet ownership has recently soared as people sought companionship during Covid-19 lockdowns (a record 62% of British households owned a pet in 2021/2022). And numbers could keep growing as lifestyles change post-pandemic — for example the number of people working from home increases — and the introduction of standard tenancy agreements makes it easier for renters to own a pet.

A brilliant beast

I think Pets at Home is a great way to capitalise on this theme. Its stores and website are one-stop shops for everything your pet needs, from food and toys to veterinary care and grooming services.

Its broad range of services allow exceptional cross-selling opportunities when people are in store. This, in part, explains why like-for-like sales continue to grow strongly (up 8.7% in the three months to December).

I also like it because of its rapidly-growing ‘VIP’ loyalty scheme. This helps it fend off the competition and provide shoppers with a more personalised experience. The number of members here leapt 13% year-on-year between October and December, to 7m.

Pets at Home boasts a large 3.9% dividend yield for this financial year. The figure leaps to 4.3% for next year too.

Carry on doctors

I also think buying property stock Assura (LSE: AGR) shares is a great idea in the current climate. This is because demand for its assets remains stable during all points of the economic cycle.

This particular FTSE 250 stock builds and develops primary healthcare properties which it then lets out. Demand for medical services isn’t something which ebbs and flows, meaning Assura can expect rents to roll in during the good times and bad.

If anything, the need for GP surgeries and the like is set to grow as Britain’s population rapidly ages and the strain on existing infrastructure rises.

5%+ dividends

I also think buying property shares could be a good plan for me in this period of high inflation. The rents that companies like Assura charge tend to increase in line with broader prices, protecting me from the trouble that most other UK shares are currently facing.

Assura could suffer if government health policy changes. If NHS funding drops then profits at the business might take a big hit.

But all things considered, I think the rewards of owning this business outweigh the risks. Assura’s dividend yields for this financial year and next also sit at 4.8% and 5.1% respectively.

Today however, I’m looking at a sub-£1 share whose main draw, at least for me, is its income stream. In fact, I think this dividend stock could quite easily be a core holding if securing a lifetime of passive income were my priority.

Defensive income

The stock — or real estate investment trust (REIT) to be completely accurate — is Assura (LSE: AGR). No, I hadn’t heard of it either.

To bring everyone up to speed, the FTSE 250 member owns, develops and manages medical centres for GPs. There are several reasons why this strikes me as an attractive destination for my money.

First, there’s the demand. It’s hard to imagine a more defensive sector in the market than healthcare. This quality has become even more apparent following the pandemic and the push to have more community-based services.

A consequence of this is that Assura has great visibility on earnings. Leases tend to be 21+ years. It’s also able to pre-let properties before they are even constructed.

All this has been good news for income hunters. With the exception of the anomaly that was 2020, Assura has a great record hiking its total payout. For me, that’s preferable to a company offering sky-high cash returns only for these to prove unsustainable and eventually cut.

So just how good are the dividends?

Analysts are predicting Assura will return 3.11p per share to holders in FY23 (which began on 1 April). Using Friday’s closing price, that’s a yield of 4.6%.

That may not be the highest I can find, but it still sounds pretty good to me. It’s slightly above that of peer Primary Health Properties (4.4%) and significantly greater than the FTSE 250 index as a whole (2.4%).

It goes without saying that 4.6% is also an awful lot more than I’d get from any kind of cash savings account. With inflation showing no sign of slowing, the value of my money is literally being eroded if I went for this option. No thanks.

Risks to consider

Of course, no investment is risk-free. Say what you like about cash savings (and I do), having at least some money on hand for life’s little emergencies (or just ridiculously high energy costs) is never a bad plan. I also know that my bank balance won’t jump around as the UK stock market has recently.

An investment in Assura carries no such guarantee. As evidence, the share price is down 7% in the last 12 months. Sure, some penny stocks have fared far worse. But there’s no rule to say it can’t fall further.

Then there’s the valuation. A forecast P/E of 21 is on the expensive side for an income stream that, while looking solid, can never be guaranteed.

Core holding

On balance, I’d be prepared to buy this dividend stock today. It ticks the vast majority of boxes on my checklist for a long-term income play.

And if I choose to reinvest what I receive, I stand to benefit even more from the magic that is compounding. How very Foolish.

Here are a couple of penny shares I would consider adding to my portfolio in April based on those criteria.

Angling Direct

Some people spend their spare time casting around in the stock market for promising shares to buy. Others prefer to rest on the riverbank casting for fish. The two come together in the form of Angling Direct (LSE: ANG).

The company is a retailer of angling supplies. As its name suggests, it has a sizeable digital commerce operation. But the company has also been building a network of retail branches. I think that two-pronged approach makes sense. The retail network can help build awareness of the company as well as serving anglers who prefer to buy in person. Meanwhile, the digital operation helps the company build national scale.

Even in a world with online retail beasts, I think there is a place for specialist retailers. Their focus and customer service can help them build a reputation with a particular target customer group. Anglers are often happy to spend on their hobby and I expect the popularity of fishing to endure. There are risks – for example, a cyber attack not only hurt the company’s reputation but also lost it some sales. That might happen again. But I am tempted to take a bite on the shares.

Assura

Another area I expect to experience enduring demand is healthcare provision. That requires staff, equipment, and medicines – but it usually also needs buildings. Whether it is a doctor’s surgery or ambulance depot, such buildings are likely to see ongoing use for many years.

One property company that has decided to focus on serving the healthcare sector is Assura (LSE: AGR). The business model here is quite simple: Assura builds or buys properties then lets them out to healthcare tenants. I reckon the profile of such tenants makes them attractive: they will often be happy to stay in one place for the long term, and have the resources to pay their rent on time.

If the portfolio is well chosen and maintained, I think that ought to add up to a profitable formula for success. Assura has raised its dividend annually over the past few years. It is firmly in growth mode, adding more properties to its portfolio. That brings additional risk as the company is carrying debt on its balance sheet. If it struggles to lease properties, servicing the debt could eat into profits. But I am positive about the firm’s business model and would consider adding it to my portfolio.

Penny stocks to buy now

I like the look of both Angling Direct and Assura as potential purchases for my portfolio. But I do not see them as penny stocks to buy now just because of their price. Rather, I reckon their strong business models could be profitable for years to come.

Dividend shares as passive income ideas

Dividends are never guaranteed, but mixing my holdings between different companies means that even if one cuts its payout I can still receive passive income from others.

Here are three UK dividend shares from different industries I would consider buying for my portfolio.

British American Tobacco

One dividend share I already own and would be happy to keep buying is British American Tobacco (LSE: BATS).

Tobacco is a business that carries risks for manufacturers as well as their customers. From declining cigarette purchase rates hurting sales volumes to the potential costs of a withdrawal from the Russian market, the Lucky Strikes owner faces a number of challenges.

But I think the risks are already factored into the company’s share price. It offers a 6.7% yield. The company has raised its dividend annually for over two decades. Although the most recent raise was small, British American has also started a sizeable share buyback programme. That suggests management is confident in the business outlook. The company has also been making progress in reducing debt.

With its strong cash flows, portfolio of premium brands and pipeline of non-cigarette products, I continue to see British American Tobacco as an attractive passive income pick for my portfolio.

Direct Line

Insurer and financial services provider Direct Line (LSE: DLG) is another of the passive income ideas I would consider adding to my portfolio. It currently offers a yield of 8.3%, so if I invested £1,000 in it today I would hope to get annual passive income of £83 in future.

Insurance is not typically a high-growth business, but it is pretty resilient. Vehicle owners are obliged to have insurance. Many homeowners keep insuring their properties even when premium prices go up. That makes for attractive economics in the insurance industry. Direct Line’s iconic brand can help it benefit from those economics. That can enable it to reward shareholders with dividends.

There are risks, too. For example, shortages have pushed up the cost of secondhand cars. That has made it costlier for Direct Line to settle some claims, which could eat into profits. Over the long term, though, I reckon the company’s proven ability to price the risks profitably could make it an attractive dividend share for me to hold in coming years.

Assura

Shares in healthcare property landlord Assura (LSE: AGR) have fallen 7% over the past year. Along with a growing dividend, that means the company currently offers a yield of 4.4%.

I think Assura is positioned to benefit from strong demand for the sorts of properties it operates. From local clinics to ambulance depots, I expect resilient demand to support future profits.

One risk here is share dilution to fund ambitious expansion plans. That could lower earnings per share if the company’s growth is not well-managed.

Assura is not what I would call an exciting business. Actually, that is partly why I like it. The business model is proven and it works. I think Assura’s market niche could support profitability in the coming years. The dividend appeals to me and I would consider adding the shares to my holdings.

Mega cheap on paper

Investors have been turned off by Venture Life Group (LSE: VLG) in recent months and its share price has slumped. The business manufactures a range of non-prescription healthcare products and demand for its hand sanitisers has slumped in line with global Covid-19 infection rates. This penny stock is now 53% cheaper than it was a year ago.

I think this weakness provides a great dip-buying opportunity though. After all, Venture Life now trades on a forward price-to-earnings growth (PEG) ratio of 0.3. This is inside the accepted benchmark of 1 that suggests a stock could be undervalued.

Acquisitions to fuel growth?

I like Venture Life because of its commitment to expansion and the success of its acquisition strategy. City analysts believe the stock’s earnings will rebound 35% in 2022 and latest financials in January underlined its solid outlook.

Back then, Venture Life said that second-half sales were up 35% from the first six months of 2021. It added that the order book was “significantly ahead” of levels reported a year earlier. I’m also encouraged by its deal with Samarkand Global to sell its oral products like Dentyl mouthwash in China. Disappointing sales from its previous partner there compounded the firm’s woes last year.

Venture Life is a highly cash-generative business and has plenty of liquidity to pursue acquisitions following a revolving credit facility it sealed in mid-2021. An acquisition-led growth strategy can throw up problems like poor sales and unexpected costs later down the line. But as a long-term investor I find its commitment to supercharge profits through M&A very attractive.

Another great dip buy

Assura Group (LSE: AGR) is another penny stock that’s fallen heavily over the past year. Despite a recent recovery, the healthcare property specialist trades at a 6% discount to levels recorded this time last March. I’m also considering snapping it up today.

Assura doesn’t exactly look cheap based on current earnings forecasts. The business trades on a price-to-earnings (P/E) ratio of 21.6 times for the financial year beginning in April. However, its jumbo 4.6% dividend yield is what makes it an attractive buy for me at current prices.

A rock-solid penny stock

I have to say I believe that Assura deserves that premium P/E ratio, anyway. It’s never going to deliver explosive earnings growth — City analysts are forecasting a 6% profits rise in the year to March 2023 — but the ultra-defensive nature of its operations make it a fantastic investment in my book.

Assura develops and then lets out primary healthcare facilities. This is a part of the property market that delivers stable rents at all point of the economic cycle. In fact, demand for such buildings should keep rising steadily as Britain’s population ages and the need for healthcare infrastructure subsequently increases.

Future changes to government health policy could hit earnings one day. But as things stand now, I think Assura is a great buy, and especially for those seeking passive income with dividend shares.