These 2 shares could bank me £328 a month in second income

Front view photo of a woman using digital tablet in London

The best stocks to provide me with a second income are usually ones that pay dividends. In banking the payments when they come through, or in reinvesting them to further compound my gains, I can reach a point whereby the income levels really become noticeable.

Here are a couple of stocks that could help to add a chunk to my monthly earnings.

Turning to the property market

With a dividend yield of 7.51%, the Schroder Real Estate Investment Trust (LSE:SREI) is a great place to start. The fall of 4% in the share price over the past year isn’t amazing. However, for a trust focused on property, this is better than average.

The slight fall reflects the difficult property market here in the UK. With elevated interest rates, it has put pressure on property values (both commercial and private). Further, the uncertainty of tenants signing new leases is another factor to consider.

Yet the trust has done well in riding this difficult period, which is evident from the continued income payments.

I think the future is bright beyond just looking for a rebound in the property sector. The trust focuses on turning sustainable buildings from “brown-to-green”. It states that “this gives shareholders the potential to capture the rental and valuation premium that buildings with genuine green credentials can command”.

I believe this is a great niche and could enable the fund to increase in size as ESG investors take note.

A maturing growth stock

A second stock is Games Workshop (LSE:GAW). Some may be scratching their heads, given that this has been popular with growth investors, not for income. The 214% gain in the past five years is evidence of this.

Yet as the business grows up and matures, exponential growth potential slows down. Over the past year, the stock is up a modest 7%. Yet as part of this process, management teams often start to increase the dividend payments. This is the case for Games Workshop.

For example, in 2022 it paid out 165p per share. Last year, this was 415p. I expect this to be higher over the course of 2024. Currently, the dividend yield is 4.42%. However, I think this could rise over the coming year.

A risk is that the business is sensitive to the fate of the consumer. With the UK in a recession, the buyer on the street is likely to feel the pinch. This could negatively impact revenue in store for Games Workshop.

Working through the numbers

I think both stocks are good options and I’m thinking about adding them to my portfolio. If I invested £200 a month in each stock and added £200 each month, my value in both quickly adds up. This is especially true if I reinvest the dividends.

For example, if I stuck to this schedule for the next decade, my pot could be worth £66k. Then for the next year, the income would average out to £328 a month.

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Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Games Workshop Group Plc. 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.