- Dividend investing is a popular choice among investors as it can provide a dual source of income, from consistent dividend pay-outs and the share price increase during the investment tenure.
- It is a preferred option amongst investors seeking a lower risk addition to their equity portfolio.
- Most companies have resumed dividend pay-outs this year, following a brief pause in 2020 due to the pandemic.
Dividend investing is a popular investment strategy as it offers an investor a dual income source from their equity investments. It is also considered as a relatively lower risk equity investment compared to high growth stocks.
One source of income for investors comes as a passive stream of income from the dividends disbursed by these companies, and the second is in the form of the stock’s appreciation in value in the duration of the investor’s stock holding.
It also appeals to investors looking to diversify the risk from their equity portfolio investment due to dividend paying stocks being considered relatively more stable.
In this article, we will explore 5 FTSE listed dividend paying stocks one can consider while thinking of a passive source of income:
- Downing Four VCT PLC (LON: DO1D)
Downing Four is a venture capital trust (VCT) that invests in limited life and evergreen share classes as part of its portfolio of VCT qualifying investments.
The company announced one of its healthcare share classes portfolio company, GENinCode plc (LON: GENI), was granted trading its shares on the Alternative Investment Markets on 22 July and had raised £17.0 million through a share placing and subscription.
Subsequently, Downing’s unaudited net asset value (NAV) per healthcare share rose to 82 pence per share from 73.8 pence per share reported on 30 June. The boost was due to the increase in value of GENinCode’s placing price.
Downing Four’s market cap stands at £0.71 million as of 23 July, and its five-year average dividend yield is the highest among all FTSE listed companies at 277.7 per cent.
Also Read: 10 lesser-known FTSE dividend champions
- Sherborne Investors (Guernsey) B Ltd (LON: SIGB)
Sherborne Investors is an investment firm domiciled in Guernsey. The company announced the disbursement of UK based private equity firm Electra Private Equity PLC’s (LON: ELTA) shares as a dividend pay-out.
The company announced the dividend payment date was 30 June, and that the disbursement was based on one Sherborne share representing about 0.02623 of an Electra ordinary share.
The total dividend pay-out consisted of 8,250,575 Electra shares.
Sherborne Investors’ market cap stands at £3.3 million as of 23 July, and its five-year average dividend yield is at 94.4 per cent.
- Seneca Growth Capital VCT PLC (LON: HYG)
Seneca Growth Capital is a generalist VCT with a portfolio including private as well as AIM-listed investments.
The company’s unaudited B share NAV stands at 106.1 pence per share as of 11 June, up from 100.4 pence per share as of 29 March due to fluctuations in the B share class of investments which offset its Q2 2021 operational expenses.
Seneca Growth Capital’s market cap stands at £2.96 million as of 23 July, and its five-year average dividend yield is at 39.5 per cent.
Also Read: 5 top FTSE 100 stocks for long term
- Grit Real Estate Income Group Ltd (LON: GR1T)
Grit Real Estate is an LSE listed, and Africa focused real estate company. The firm recently announced it had signed a lease agreement with special purpose vehicle (SPV) Gr1t House Limited in order to develop a 10,028 square meter commercial office space in Mauritius.
Grit Real Estate Income Group’s market cap stands at £150.71 million as of 23 July, and its five-year average dividend yield is at 38.2 per cent.
- Baronsmead Venture Trust PLC (LON: BVT)
Baronsmead is a UK based tax efficient VCT. The company declared its FY 2021 interim dividend payment of 3.0 pence per share.
The interim dividend will be payable on 10 September. It also announced its NAV stands at 85.41 pence per share as on 30 June, compared to a NAV of 82.95 pence per share as of 31 May.
Baronsmead Venture’s market cap stands at £221.00 million as of 23 July, and its five-year average dividend yield is at 19.1 per cent.