This reading beats the FTSE 100 forward average of 4.2%. And the property stock’s yield could get even better for financial 2024. For that year it should rise to 7.8%.

Landsec has had its fair share of troubles since the pandemic. But could now be the time to buy the battered business for my portfolio?

Dividend growth

Land Securities cancelled dividends entirely during the height of the pandemic. But the business has been raising payouts again since fiscal 2021.

It paid a 37p per share annual dividend for last year. City analysts expect dividends to rise to 37.85p this year and again to 39.22p in fiscal 2024.

That said, dividend forecasts aren’t covered very well by predicted earnings. This means payouts could fall short if Landsec doesn’t earn as much as expected. For the next two years dividend coverage sits at 1.3 times. A figure of at least 2 times is the target for investors.

Is it a buy?

First let’s look at the good stuff. I like the huge investment Land Securities is taking to revamp its retail properties. Steps to improve the shopper experience is essential as consumers migrate towards e-commerce. And it could pay off handsomely as people reconnect with physical retail in the post-pandemic environment.

However, there’s a danger that the group will continue to swim against the tide as digitalisation increases. It’s not just the impact of e-commerce on its retail business that I’m concerned about. The growth of flexible working also poses a threat to its office portfolio.

The business also faces considerable near-term danger as consumer spending in the UK sinks. In this landscape there could be a surge in the number of its tenants going bust and asking for rent reductions.

The British Retail Consortium reported that total sales rose just 2.2% in September in its latest release. This will likely be far behind the expected rate of consumer price inflation (tipped to be around 10% and could get much worse as energy prices soar).

Debt concerns

As a potential investor, I’m also put off by the enormous rise in borrowing costs that the shopping centre operator faces. Analysts at Goldman Sachs think gross financing costs for Land Securities will rise by around 75% during the next five years, the Financial Times reported. The company had a whopping £4.2bn worth of net debt on its books as of March.

Incidentally, Goldman Sachs also thinks that prices of commercial properties will fall 15-20% between June this year and the end of 2024.

I like Landsec’s enormous dividend yields. I’m also a fan of its low P/E ratio of 10.4 times. But this FTSE 100 share has all the hallmarks of a classic dividend trap. I’d prefer to buy other income shares today.

Safe as houses

One that I think could help me perform well is Land Securities Group (LSE:LAND). The FTSE 100 real estate investment trust (REIT) has a large portfolio in central London. Over the past year the share price is down 24%, with the current dividend yield at 6.91%.

The fiscal help from the Government in recent weeks should help to support the property sector. Granted, the cut to stamp duty won’t be of much benefit for the business. But the support on energy bills for corporates will. This should allow tenants within the commercial properties to be able to pay rent on time as cash flow issues ease.

Cuts to income tax should have an indirect benefit too. The company owns some leisure and retail parks. If people have more take-home pay, some of this could be spent on holidays and shopping. This boosts revenue for the tenants that pay rent to Land Securities. As a result, occupancy levels should increase, with defaults decreasing.

One concern I do need to be mindful of is the risk of a deeper recession in the UK if the fiscal packages don’t help. In this case, I’d expect to see lower demand for prime central London office space, hurting revenue.

The dividend stock I never knew I needed

The second stock I like is DS Smith (LSE:SMDS). The packaging and recycling business isn’t one of the snazziest companies in the FTSE 100. But with a dividend yield of 5.83%, it’s one that has caught my eye.

Let’s start with the bad news. The share price is down 42% in the past year. This is mainly down to financial results that have highlighted much greater costs associated with transportation and energy. This is a clear risk, but I feel a lot of this is a medium-term issue that will get resolved.

On the flip side, demand is increasing. The full-year results from June showed that revenue increased by 21% from the previous year. Operating profit also jumped by 23%. This gives me confidence that if cost inflation pressures can ease in the coming year but demand stays high, profits will increase. In turn, this should give way to a higher dividend per share.

I’m also a fan of the business because of the resilient demand I expect even during a recession. Recycling will remain a focus whatever the state of the economy is. Even packaging solutions should be strong. Only if we see a material fall in the demand of the goods being packaged would this knock-on to DS Smith.

I’m looking to cut back on some spending over the next month and use these funds to buy both of the above dividend stocks.

Supermarket shock

Ocado (LSE: OCDO) shares continued their fall during the week. They’re now down almost 70% over the past 12 months. Shareholders are still well in profit since flotation, though.

The latest dip is fallout from a trading update on 13 September, in which Ocado warned us to expect “a small sales decline in FY22 and close to break-even EBITDA“.

Despite that, the company’s all-in-one online selling package, known as the Ocado Smart Platform (OSP), is doing well. It provides a robotic warehouse automation package. And by the end of the first half this year, 11 partners in nine countries were signed up.

International revenue from the OSP business more than doubled in the half too.

The problem for me is that the bulk of Ocado’s revenue still comes from retail. The OSP business might have years of strong growth ahead of it. But I just don’t know how to put a valuation on it, so I’ll give it a miss.

Out of fashion

JD Sports Fashion (LSE: JD) shares took a dive on 22 September in response to interim results, and then slid further by the end of the week. We’re looking at a 12-month fall of 50% now.

I wonder if this might just be a return to normality. JD shares did soar during the pandemic, but then went into sharp decline in 2022. Over the past five years, shareholders have seen their investment rise by 40%, though the price is back at mid-2019 levels now.

The company’s outlook is upbeat, with early sales in the second half around 8% ahead of the previous year. JD also notes “an encouraging return to positive trading in the United States“.

Forecasts suggest a forward price-to-earnings (P/E) ratio of under 10. There’s certainly risk here, as first-half profits were weak. And a recession ahead of us won’t help.

But I find the valuation attractive, and I’ve put JD Sports Fashion on my list of buy candidates.

Cheap land?

Land Securities (LSE: LAND) had seen its shares slowly gaining in 2021. But 2022 has been less kind, as the price slid. The real estate investment trust (REIT) released an operational update on 21 September, and the market didn’t like it. The shares dipped further, and have now lost nearly 25% of their value in the past 12 months.

With the REIT now down to levels not seen since the worst of the pandemic, I’m adding it to my list of buy candidates too.

Forecasts put the dividend yield at over 6% this year. And Land Securities has a solid track record of annual dividend raises. Whether it will be able to continue that throughout the coming recession is the big risk. And if the dividend is reduced, I can see the shares falling further.

But I see a healthy long-term future for the property rentals business, and I intend to examine this one more closely.

The dream of owning a property empire and collecting monthly rental payments from a beach in the Caribbean is, unfortunately, not a reality.

The world of a landlord is often difficult, with troublesome tenants, damaged property, and lacklustre returns, all contributing to the appeal of being a landlord fading rapidly.

But, with just four little letters, an investor can reap many of the steady income benefits of being a considerable property owner, whilst avoiding a great deal of short-falls: these letters are REIT.

A REIT, or real estate investment trust, is a company that owns, operates, or even finances physical property, and through utilising pooled funds from a range of investors, they can allow a steady dividend income to be achieved, through just owning shares in the company.

For my goal of boosting dividend income, I am most attracted to shares in Land Securities Group (LSE: LAND), a FTSE 100 REIT involved in the commercial property sector.

The company has been around for just under 80 years, and in that time has grown to be the largest commercial property and investment company in the UK. Its portfolio includes London office, retail, and leisure spaces, along with retail and leisure facilities in the North of England. In 2022 this portfolio was valued at £12bn, generating rental income of £586m in the 2022 financial year.

At the current share price of 602.6p, Land Securities Group pays a dividend of 6.1%, almost double the current average FTSE 100 dividend yield of 3.65%. In fact, Land Securities Group has been paying a steady dividend for over 30 years, with the dividend forecast to grow by 3.5% this year alone.

I truly believe that this is one of the best opportunities to boost the income generating ability of my portfolio in the current market.

It’s, of course, important to note that REITs haven’t been immune to the tough market conditions of 2022, as the Land Securities Group share price has fallen 22.4% in 2022. Despite positive performance in 2021, it still remains down almost 40% from its pre-pandemic levels.

However, there are signs of improvement, as gross rental income has increased by 3% since 2021, and the portfolio has increased by almost 4% over the year. This is certainly encouraging, as this may present an opportunity for a capital gain in addition to a steady source of dividend income.

For these reasons I would use Land Securities Group as a way to boost my portfolio’s dividend income. The company offers a great way to gain exposure to the UK commercial property sector, with plenty of diversification, and a near 80-year history of operations.

Of course, the past two years have been challenging, and the company’s financial performance has suffered, but I believe it is on the road to recovery, so the opportunity for a steady income and capital gains is very appealing, and consequently a consideration as a new holding within my portfolio.

Real estate investment trust (REIT)

Land Securities, often referred to as Landsec, is one of the largest REITs and property businesses in the UK. It buys, owns, operates, and rents out a number of different properties including retail, leisure, residential and office buildings. The income it yields from these properties is then paid back to shareholders in the form of dividends.

The beauty of REITs is that 90% of profits must be returned to shareholders. This is why I already a own a few as part of my holdings.

So what’s happening with Landsec shares currently? Well, as I write, they’re trading for 599p. At this time last year, the stock was trading for 666p, which is a decline of 10% over a 12-month period.

To buy or not to buy

I have compiled some pros and cons of me buying Landsec shares to help me decide what to do next.

FOR: I like the fact Landsec is one of the biggest operators in the UK. Through its £12bn portfolio, and 24m square foot operation, it has a diverse portfolio of property and covers lots of different geographical territories. I believe this diversity affords it some protection against challenges such as economic volatility.

AGAINST: Economic volatility is one of the biggest challenges I believe Landsec currently faces. Due to soaring inflation, a cost-of-living crisis has emerged in the UK. One concern I do have is that rent collection could become an issue, which would affect performance and returns. Furthermore, the changing face of retail due to the rise of e-commerce could see its retail outlets experience weaker demand. In addition to this, the working from home trend could impact demand for its office buildings.

FOR: At current levels, Landsec shares look decent value for money on a price-to-earnings ratio of just over five. Additionally, as with any dividend stock, I want to know the dividend yield, which would help me understand the level of return I could receive. Landsec’s dividend yield stands at 6.5%. This is higher than the FTSE 100 average of 3%-4%.

AGAINST: I am aware that dividends are never guaranteed. They can be cancelled at the discretion of the business at any time. Some reasons for this include economic volatility, a financial crash, or an unexpected event such as a pandemic. Dividends are usually cut to conserve cash.

A dividend stock I would buy

To summarise, I believe the positives outweigh the negatives when it comes to Landsec shares. Although I am unable to purchase every stock I like, I would be willing to add Landsec shares to my holdings to boost my portfolio. Its profile, presence, the dividend yield on offer, and current valuation all help me come to this conclusion.

These real estate investment trusts can give me access to a regular income from a broad mix of commercial and industrial property.

If I wanted to invest directly in such property, I’d need millions of pounds. Using REITs, I can get started with just a few hundred.

Here are the three REITs I’d buy to get started in property investing today.

#1 Landsec

FTSE 100 REIT Landsec (LSE: LAND) owns a mixed portfolio of top-quality London office space and large regional shopping centres and retail parks.

Landsec’s focus on quality has helped it to keep occupancy high, despite changing market conditions. Modern London offices in good locations are still in demand, as are leisure and retail sites at centres such as Bluewater and Westgate.

One possible risk is that a UK recession could reverse the recovery that’s been seen during the pandemic. Landsec could be forced to cut rents in order to keep occupancy high. That could put the stock’s 6% dividend yield at risk.

There are always risks, but in my view Landsec’s strong portfolio and low levels of debt mean that the outlook should be fairly safe. I’d be happy to buy this REIT stock as an income investment today.

#2 Primary Health Properties

My second pick, Primary Health Properties (LSE: PHP), owns more than 500 GP surgeries and local medical centres around the UK.

Healthcare property is known for its long leases, and PHP’s portfolio reflects this. The trust’s average remaining lease length is more than 11 years, while 89% of its rent is paid with government funding.

This should mean that PHP can provide very reliable cash flows for the foreseeable future. The main risk I can see is that rising interest rates mean that debt costs will rise. PHP’s interest costs are mostly fixed for the next eight years, providing some protection. But I think this is still a situation that’s worth watching.

PHP shares offer a forecast dividend yield of 4.8% and trade just above their book value. That’s not especially cheap, but with occupancy at 99.7%, I think the stability of this business is worth paying for.

#3 Tritax Big Box REIT

Warehouses have been a hot investment area in recent years. One of the bigger players in this sector in the UK is FTSE 250 firm Tritax Big Box REIT (LSE: BBOX).

Key tenants include Amazon, Morrisons, and B&Q. Tritax recently reported a 0% vacancy rate, with an average remaining lease length of nearly 13 years.

Soaring prices kept me away from warehouses during the pandemic, but I reckon valuations are now starting to look more reasonable.

A UK recession could hit Tritax as demand for new warehouse space might fall. But the company’s modern properties look relatively low risk to me. I’m also reassured by the REIT’s relatively low level of debt.

Tritax shares now trade at a 30% discount to their book value of 240p and offer a 4.2% dividend yield. I think this could be a good entry point for this stock.

These fallen FTSE 100 stocks all offer yields above the index average of 3.7%. Should I buy them today?

Land Securities Group

Property shares like Land Securities (LSE: LAND) are popular to buy when inflation soars. This is because they have the power to lift rents in line with broader price rises, in turn protecting profits from inflationary pressure.

Still, this is one particular stock I won’t buy as consumer spending sinks. Springboard says that visits to shopping centres and high streets have slumped below pre-pandemic levels again. Footfall in malls was particularly weak, dipping 18.6% last month versus July 2019 levels.

This is particularly worrying for Landsec given the large number of shopping centres within its property portfolio. As the economy sinks it could face a tsunami of tenants struggling to pay the rent and the prospect of empty lots in its shopping centres.

It’s an especially concerning situation given the huge amount of debt plaguing the business. Net debt rose by almost a fifth during the 12 months to March, to £4.2bn.

With the company sporting weak dividend cover I think payouts could disappoint over the short-to-medium term. And given the rise of e-commerce and flexible working — casting doubt over future need for physical retail and office space — I think shareholder returns could be weak further out too.

Legal & General Group

Legal & General Group’s (LSE: LGEN) share price has also been driven lower by the worsening economic landscape. Demand for the financial products it sells (such as life insurance and investment services) has a history of shrinking when consumer spending power tightens.

Yet despite the toughening trading landscape, I’m still tempted to buy this FTSE 100 stock. I think its low valuation prices in the rising risks to its earnings. And its large dividend yield could help me to supercharge my passive income.

Unlike Land Securities, I believe Legal & General has a great chance of making this year’s predicted dividend too. Dividend cover is under the widely-accepted security benchmark of 2 times and below. But cash generation remains strong and continues to beat its five-year target.

Legal & General’s a share that’s bought for its dividend income rather than its growth prospects. But that’s not to say that investors should be prepared for dull profits expansion. I think the bottom-line here will grow solidly in the long term as an ageing population drives demand for its pensions and retirement products.

Here are two Footsie dividend stocks with tasty yields I’d add to my stock market portfolio today.

Admiral Group

The Admiral Group (LSE: ADM) share price has trailed the FTSE 100 index by a significant margin this year — it’s down nearly 38%. The fall has pushed the stock’s dividend yield up to a whopping 6.78%.

The insurer recently suffered a heavy sell-off due to a profit warning issued by competitor Sabre Insurance Group, which itself was caused by inflationary pressures. Admiral shares were dragged down amid growing fears of a risk the company will post disappointing H1 results on 10 August.

However, now trading below £20 per share, the stock could be oversold in my view. A key advantage the business has over its competitors is greater diversification. This may help shield it from higher claim volumes and rising car repair costs.

Granted, UK motor insurance makes up the lion’s share of Admiral’s revenue. Nonetheless, UK household insurance, international insurance, and loans also contribute significantly to the company’s bottom line.

I’m particularly encouraged by the firm’s loan book growth to £607m gross balances in FY21 (up 51% on the previous year). The group is optimistic this will hit £800m-£950m this year.

I’ll wait to see whether the company makes substantial revisions to its dividend forecast on results day before investing. Provided Admiral can demonstrate it’s able to navigate the inflationary climate successfully, I view the share price slump as an excellent dip-buying opportunity for me.

Land Securities Group

Land Securities Group (LSE: LAND) shares have fared better this year, falling 5.5%. Structured as a real estate investment trust (REIT) since 2007, it’s the UK’s largest commercial property development and investment company. The stock yields a healthy 5.29%.

At 31 March, this FTSE 100 property business owned a £12bn portfolio of retail, leisure, workspace and residential hubs spanning 24m square feet. It has a particularly high concentration in central London, with 56% of its portfolio located in the West End alone.

The latest financial results were largely positive. The company’s gross asset value increased 11% year-on-year and dividends per share rocketed 37%. Gross rental income was also slightly up, rising 3% to £586m.

It’s not all plain sailing for Landsec shares, however. The Q2 2022 RICS UK Commercial Property Survey results signalled “a more cautious tone…with a weakening outlook across the broader economy anticipated to weigh on the market going forward“. A sharp downturn in commercial real estate prices would be a headwind for the share price.

Nonetheless, the REIT has a high-quality portfolio and I’m bullish on its long-term investment prospects. With flagship properties to its name, such as the Brighton Marina and Bluewater in Kent, I like Landsec’s diversification as well as its strength in the capital. I’d buy this stock for additional real estate exposure in my portfolio and solid dividends.

The UK market offers a choice of REITs, including healthcare, industrial, office and retail specialists. Here, I want to highlight three REITs with yields over 5% that I think are among the best buys today.

A top FTSE 100 REIT

A REIT is a legal structure that’s taxed differently from a company. In short, REITs get certain tax breaks so long as they return 90% of their rental profits to shareholders in the form of dividends.

One of the largest UK REITs is FTSE 100 member Landsec (LSE: LAND). This £5.6bn firm owns some of London’s most valuable office blocks, as well as a portfolio of major shopping centres, retail parks, hotels and leisure sites.

Of course, we still don’t know for sure whether office and retail demand will return to pre-pandemic levels. That’s a risk here. But, in my view, the quality and location of Landsec’s assets means they’re likely to remain popular.

On balance, I’m attracted to Landsec’s property portfolio and its forecast dividend yield of 5.1%.

A healthcare opportunity?

One sector of the market that shouldn’t be affected by working from home or internet shopping is healthcare. My choice in this area is Target Healthcare REIT (LSE: THRL), a £700m firm which owns a portfolio of long-lease UK care homes.

At the end of December, Target’s averaged unexpired lease length was 27.5 years. This should guarantee predictable rental income for many years. With Target shares offering a 6% dividend yield, this portfolio looks attractive to me.

However, it’s worth remembering that a long lease doesn’t provide any protection against tenants who suffer financial problems. Too many bankruptcies could put pressure on care home rental rates. I don’t know how likely this is, but I do believe it’s a risk.

Fortunately, the UK’s ageing population means demand for care home beds is likely to remain strong. Target estimates that the number of over 85s in the UK will double by 2040.

By focusing on purpose-built homes with wet rooms and good facilities, Target hopes to operate at the quality end of the market, attracting financially secure tenants. I think this REIT is likely to be a long-term winner in this sector.

A regional UK REIT

My final choice is Custodian REIT (LSE: CREI). This REIT is a little different from my other two picks because it owns a mixed portfolio of property in towns and cities all over the UK.

Custodian’s portfolio includes offices, shops, industrial units and warehouses. For me, this is a UK REIT that provides direct exposure to the real UK economy. The obvious risk here is that I’d expect some of Custodian’s tenants to suffer in a recession, perhaps more than at Landsec.

I’m comfortable accepting this risk, partly because Custodian REIT has a loan-to-value ratio of less than 20% — lower than average. I think this would provide some breathing room in a difficult market.

In the meantime, I think Custodian REIT’s 5.5% dividend yield looks very attractive. I’d buy this UK REIT for my portfolio at current levels.

Each carries a dividend yield above the average of 3.5% for the broader FTSE 100. They also trade on either a price-to-earnings (P/E) ratio of below 10 times or a price-to-earnings growth (PEG) ratio of under 1.

Betting on the post-Covid bounce

Property stock Land Securities Group (LSE: LAND) was rocked by the impact of Covid-19 lockdowns on its retail and office properties. But fans of the business would say that now’s a good time to invest as the threat posed by the pandemic seems to be receding. City brokers certainly expect earnings at the firm to keep rising over the next few years at least. And as a consequence dividends are expected to continue growing, resulting in a 4.5% dividend yield for this year alone.

I’m afraid to say I won’t be buying Land Securities shares despite this bright short-to-medium-term outlook. I worry about how demand for its shopping centre and office space will fare as the digital revolution clicks through the gears. E-commerce is having a devastating effect on physical retail and the rise of remote working is upending the role of the office too.

Land Securities is addressing this problem, for example, by changing its shopping malls into multi-use areas with a greater focus on leisure. But this is coming at great cost and there’s no guarantee that it will succeed in the online shopping age.

A better FTSE 100 dividend stock to buy?

Would I be better off buying shares in BT Group (LSE: BT-A) instead then? This Footsie stock’s forward yield sits at a less-impressive 3.9% for the current year, sure. However I think its essential role in the digital revolution could actually make it a long-term winner for me. The broadband, telephone, and mobile services it provides are critical in keeping people connected.

I also prefer BT Group over Land Securities as the rising costs of living hits consumer spending power. Recent research shows how people’s demand for telecoms products has been more resilient than say for essentials like clothing. The retailers that fill Land Securities’ properties are facing a more uncertain future and could struggle to pay their rents.

That being said, I don’t fancy buying BT’s shares for my portfolio either. I still think the outlook for the FTSE 100 telecoms company is packed with danger as the UK economy cools. I’m also worried about the rising level of competition it faces. It’s not only facing a fight to hang onto and to grow its household and business customers. The company’s Openreach fibre-laying infrastructure division also has a battle on its hands. Liberty Global and Telefonica are exploring setting up a joint venture to supply 7m British homes with their own fibre, for example.