Here are 2 FTSE 100 stocks I'd buy to generate passive income

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

macro shot of computer monitor with FTSE 100 stock market data in trading application

I’m always looking for passive income ideas. And the best ones are when my income streams are truly passive. Side hustles are great, but they mean I’d have to do extra work on evenings and weekends to earn my so-called passive income. Here’s where the FTSE 100 comes in. It’s a large-cap stock index in the UK with many dividend-paying companies to choose from. Dividends are my preferred way of generating real passive income because they keep rolling in without my input.

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

So, here are two dividend stocks in the FTSE 100 I’d buy today.

A top dividend stock

The first company I’d buy is Vodafone (LSE: VOD). It operates telecommunications infrastructure primarily in Europe. I consider this a defensive sector as communication networks are vital today, even during recessions.

Global Tech News Daily

The dividend yield is what first attracted me to Vodafone though. In fact, the current forward dividend yield is almost 6.5% as I write today.

Generally, when I look for dividend stocks, the higher the yield on offer, the better. But I also have to keep in mind that dividends aren’t guaranteed. So, I also check to see if the company has been a regular dividend payer over the years. Vodafone looks good here too. Indeed, it’s paid a dividend for at least the past 10 years. The average dividend yield over this time has been 6.5%, which gives me confidence in the current forecast yield. It also means Vodafone was able to keep paying a dividend during the pandemic, again highlighting the defensive sector the company operates in.

Global Tech News Daily

I still have to keep in mind that Vodafone is carrying a lot of debt on its balance sheet. Net debt was €44.3bn at the end of the half-year period to 30 September. This may reduce the potential for dividend growth in the years ahead.

However, with its growing 5G capabilities and critical networking infrastructure, I’d buy Vodafone shares for their dividend yield today.

A FTSE 100 stock that’s fallen out of favour

The next stock I’d buy is British American Tobacco (LSE: BATS). I do view the sector as controversial given the health issues linked to its products. And the rise in environmental, social and governance (ESG) investing means many stock-pickers wouldn’t be interested. But I like its move into new-gen products. However, the company has also been the subject of a number of regulatory clampdowns in recent years. Therefore, it’s not been an easy stock to hold.

Having said that, I think the risks are priced into the shares today due to the forward price-to-earnings ratio being only 9. The dividend yield is also excellent, and will go a long way to help me generate a passive income. As I write this article, the current forecast is for a dividend yield of 7.2%.

British American Tobacco has also been able to pay a dividend for at least the last 10 years too. Again, this shows me that the company is a dependable dividend payer. The average yield over this time has been 4.8%, so still a highly respectable income stream for my portfolio.

Taking everything into account, I’d buy British American Tobacco shares today. It’s one of the biggest dividend payers in the FTSE 100. It’s not without risk though. But I view the shares as reasonably priced for the risks ahead.

The post Here are 2 FTSE 100 stocks I’d buy to generate passive income appeared first on The Motley Fool UK.

More reading

    Dan Appleby owns shares of British American Tobacco. The Motley Fool UK has recommended British American Tobacco and Vodafone. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

    Motley Fool UK 2022

    News Related

    OTHER NEWS

    HP (HPQ) Stock Moves -0.29%: What You Should Know

    In the latest trading session, HP (HPQ) closed at $37.49, marking a -0.29% move from the previous day. This change was narrower than the S&P 500’s daily loss of 0.37%. ... Read more »

    One Stop Systems, Inc. (OSS) Flat As Market Sinks: What You Should Know

    In the latest trading session, One Stop Systems, Inc. (OSS) closed at $4.05, marking no change from the previous day. This change was narrower than the S&P 500’s daily loss ... Read more »

    Luminar Technologies, Inc. (LAZR) Gains As Market Dips: What You Should Know

    Luminar Technologies, Inc. (LAZR) closed at $14.84 in the latest trading session, marking a +0.27% move from the prior day. The stock outpaced the S&P 500’s daily loss of 0.37%. ... Read more »

    NCLT okays Taguda's revival plan for Ushdev International

    The dedicated bankruptcy court has approved Taguda revival plan for BSE-listed Ushdev International. The company, featuring in the central bank’s second list of large defaulters, was referred for mandatory resolution ... Read more »

    Rel Capital resolution: Lenders hire KPMG India, L&L Partners

    Lenders to Reliance Capital have appointed KPMG India as their process advisor andetL&L Partners the legal counsel to help negotiate the challenges in the resolution of Anil Ambani-promoted Reliance Capital, ... Read more »

    Soaring refining margin bodes well for oil firms

    The industrial complex in the southern port city of Ulsan where production bases of Korea’s major petrochemical companies are located (Yonhap)South Korean oil refiners’ key profitability measure has been rising ... Read more »

    Buckle (BKE) Gains As Market Dips: What You Should Know

    Buckle (BKE) closed at $37.24 in the latest trading session, marking a +1.36% move from the prior day. This change outpaced the S&P 500’s 0.37% loss on the day. – ... Read more »

    AutoNation (AN) Dips More Than Broader Markets: What You Should Know

    In the latest trading session, AutoNation (AN) closed at $103.57, marking a -0.46% move from the previous day. This change lagged the S&P 500’s 0.37% loss on the day. – ... Read more »

    FuboTV Inc. (FUBO) Stock Moves -0.3%: What You Should Know

    fuboTV Inc. (FUBO) closed at $10.07 in the latest trading session, marking a -0.3% move from the prior day. This change was narrower than the S&P 500’s 0.37% loss on ... Read more »

    Fiverr International (FVRR) Dips More Than Broader Markets: What You Should Know

    In the latest trading session, Fiverr International (FVRR) closed at $81.01, marking a -0.52% move from the previous day. This change lagged the S&P 500’s daily loss of 0.37%. – ... Read more »

    Sterling Construction (STRL) Gains As Market Dips: What You Should Know

    Sterling Construction (STRL) closed at $27.51 in the latest trading session, marking a +1.63% move from the prior day. The stock outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

    Boise Cascade (BCC) Gains As Market Dips: What You Should Know

    Boise Cascade (BCC) closed at $77.20 in the latest trading session, marking a +0.69% move from the prior day. The stock outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

    CRISPR Therapeutics AG (CRSP) Gains As Market Dips: What You Should Know

    In the latest trading session, CRISPR Therapeutics AG (CRSP) closed at $62.36, marking a +0.76% move from the previous day. This move outpaced the S&P 500’s daily loss of 0.37%. ... Read more »

    Bausch Health (BHC) Dips More Than Broader Markets: What You Should Know

    Bausch Health (BHC) closed the most recent trading day at $24.39, moving -0.53% from the previous trading session. This move lagged the S&P 500’s daily loss of 0.37%. – Zacks ... Read more »

    ETF Strategies to Consider for February as Fed's Rate Hike Nears

    Wall Street has been mostly kind to investors so far in February after a tough January. Market participants are upbeat about improving U.S. economic conditions as reflected by encouraging fourth-quarter ... Read more »

    Bank of Nova Scotia (BNS) Gains As Market Dips: What You Should Know

    Bank of Nova Scotia (BNS) closed at $73.75 in the latest trading session, marking a +0.78% move from the prior day. This move outpaced the S&P 500’s daily loss of ... Read more »

    Fox (FOXA) to Report Q2 Earnings: What's in the Offing?

    Fox FOXA is set to report second-quarter fiscal 2022 results on Feb 9.For the quarter, the company’s current Zacks Consensus Estimate for earnings is pegged at breakeven against a loss ... Read more »

    Generac Holdings (GNRC) Gains As Market Dips: What You Should Know

    In the latest trading session, Generac Holdings (GNRC) closed at $279.97, marking a +0.01% move from the previous day. This move outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

    Spirit And Frontier Announce $6.6 Billion Merger

    Spirit Airlines Incorporated (NYSE:SAVE) and Frontier Group Holdings Inc (NASDAQ:ULCC) have announced a $6.6 billion merger to create one of the largest low-cost airlines in the U.S. The new airline ... Read more »

    First Trust Energy AlphaDEX Fund (FXN) Hits a 52-Week High

    The First Trust Energy AlphaDEX Fund FXN is probably a suitable pick for investors looking for momentum. FXN hit a 52-week high and is up 59.6% from its 52-week low ... Read more »

    Stock futures inch higher after S&P, Nasdaq fall to start the week

    U.S. stock index futures crept higher during overnight trading Monday, after the major averages moved between gains and losses during regular trading as the market awaits key inflation data later ... Read more »

    Immunovant (IMVT) Reports Wider-Than-Expected Loss in Q3

    Immunovant, Inc. IMVT reported a net loss of 36 cents per share in the third quarter of fiscal 2022 (ended Dec 31, 2021), wider than the Zacks Consensus Estimate of ... Read more »

    Buckle's (BKE) Sales Run Continues in January, Comps Gain 4.2%

    The Buckle, Inc. BKE looks well poised on the back of its robust strategic efforts, including strength in e-commerce business and an impressive sales trend. BKE has been putting up ... Read more »

    6 Best-Leveraged ETF Areas of Last Week

    Wall Street put up a moderate show last week with the S&P 500 (up 1.6%), the Dow Jones (up 1.1%), the Nasdaq Composite (up 2.4%) and the Russell 2000 (up ... Read more »

    Interpublic (IPG) to Report Q4 Earnings: What's in the Cards?

    The Interpublic Group of Companies, Inc. IPG is scheduled to report fourth-quarter 2021 results on Feb 10, before the opening bell. – Zacks Let’s check out how things have shaped ... Read more »

    Mednax (MD) Buys Night Lite Pediatrics to Boost Portfolio

    Mednax, Inc. MD and its affiliated practices Pediatrix Medical Group recently acquired Night Lite Pediatrics, LLC in Orlando, FL. Night Lite is a private 13-clinic pediatric urgent care practice. The ... Read more »

    Best Growth Stocks to Buy for February 7th

    Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, February 7th: – Zacks Apple AAPL: This company whose business primarily runs around its ... Read more »

    Gol Linhas (GOL) Stock up 16.2% in a Month: More Upside Left?

    Shares of Gol Linhas GOL have displayed an uptrend on the bourses over the past month, gaining 16.2% against its industry’s 3.1% decline. – Zacks Image Source: Zacks Investment Research ... Read more »

    Top Research Reports for Bank of America, Coca-Cola & salesforce

    Monday, February 7, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including Bank ... Read more »

    Sanofi's (SNY) Enjaymo Gets FDA Nod For Rare Blood Disorder

    Sanofi SNY announced that the FDA has approved its monoclonal antibody, Enjaymo (sutimlimab-jome), to decrease the need for red blood cell transfusion due to hemolysis in adult patients with cold ... Read more »

    The Zacks Analyst Blog Highlights: Alphabet, T-Mobile US, Advanced Micro Devices, Mondelez International and Chubb

    For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

    IRS to stop using facial recognition for identity verification

    Signage outside the Internal Revenue Service (IRS) headquarters in Washington, D.C.Bloomberg | Bloomberg | Getty Images The IRS on Monday announced it will stop using a controversial third-party service for ... Read more »

    Why Mid-America Apartment Communities (MAA) is a Great Dividend Stock Right Now

    Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

    Surging Earnings Estimates Signal Upside for Xilinx (XLNX) Stock

    Investors might want to bet on Xilinx (XLNX), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and ... Read more »

    BCB Bancorp (BCBP) is a Top Dividend Stock Right Now: Should You Buy?

    Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

    The Zacks Analyst Blog Highlights: AbbVie, Merck, Eli Lilly, Novartis and Pfizer

    For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

    BankUnited (BKU) Stock up 3.4% on New Share Repurchase Plan

    BankUnited, Inc. BKU has announced a new share repurchase plan. The company’s board of directors has approved the repurchase of up to $150 million in shares of BKU’s outstanding stock. ... Read more »

    TEGNA Inc. (TGNA) Soars 7.4%: Is Further Upside Left in the Stock?

    TEGNA Inc. TGNA shares rallied 7.4% in the last trading session to close at $21.34. This move can be attributable to notable volume with a higher number of shares being ... Read more »

    Can BCB Bancorp (BCBP) Run Higher on Rising Earnings Estimates?

    BCB Bancorp (BCBP) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

    Earnings Estimates Moving Higher for Marathon Oil (MRO): Time to Buy?

    Marathon Oil (MRO) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »