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There are many ways to build a second income. However, one of the easiest is to invest in dividend stocks. These pay out cash (from the company’s profits) to investors on a regular basis.
Are you interested in building a portfolio of dividend stocks that can generate a healthy level of income for the foreseeable future? I think an investment in these three companies could be a good starting point.
growing dividends
Unilever (LSE: ULVR) is the first stock I want to highlight. is the owner of Pigeon, domestos, knorrand many other well-known consumer brands (that consumers buy repeatedly).
If you were looking to build an income portfolio today, this is one of the first stocks you would pick. The yield here is not very high (currently it is around 3.7%). However, the company is a very reliable dividend payer that has risen steadily over the years.
Going forward, I expect Unilever to continue to increase their pay. This is a company that is quite profitable. And you can reinvest your earnings to generate future growth.
The risk here is that Unilever’s brands lose their appeal. I personally don’t see this happening, as their wide and varied product portfolio has been popular with consumers for decades. However, we cannot rule out such a scenario.
a dairy cow
The next is legal and general (LSE: LGEN), a financial services company that provides insurance, investment management and retirement solutions.
Now this action has a high return. This year, Legal & General is expected to pay a dividend of 20.4 pence per share. That puts the return at around 8.6% at today’s share price.
However, what I like about this high yield is that it also has a strong dividend history. The company has increased its pay every year since 2010. And it plans to continue to do so for years to come.
It is worth noting that Legal & General’s share price can be volatile at times. It could fall from here if stock market volatility returns or if the company’s future results are disappointing.
But I think the stock looks attractive at its current levels.
reliable income
finally i think Tesco (LSE: TSCO) could also be a great investment for those looking to generate a second income. It is the largest supermarket operator in the UK.
Why Tesco? Well, it’s a pretty stable company. People will always need to buy food and drink, even in an economic hub. So in theory it should be a reliable dividend payer going forward.
The performance here is also quite attractive. Currently, it is a little more than 4%. And the pay has been on the rise in recent years.
Of course, Tesco faces some risks. The competition from discount supermarkets like Aldi and Lidl is one. These companies could continue to steal market share, putting pressure on the company’s margins and profits.
Overall though, I think the stock is a solid choice for those looking for income from stocks.
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