These 3 passive income shares could generate a ton of dividends

Young mixed-race woman jumping for joy in a park with confetti falling around her

Passive income shares are those that pay a dividend to shareholders. While many companies pay a dividend, we tend to look for those with larger payments relative to the share price. This gives them a higher dividend yield.

So here are three stocks I think investors could consider if they’re looking for sizeable dividend payouts. They all have risks, but also potentially high rewards.

Nordic American Tankers

I’ll start with the caveat that this stock, Nordic American Tankers (NYSE:NAT), underperformed in Q1. Analysts, including myself, were expecting some blockbuster results because Houthi attacks on vessels transiting the Red Sea had pushed the price of leasing vessels way up.

Spot rates — the cost of leasing a Nordic American vessel — remain elevated versus historic levels. This is not just because of Red Sea events, but because of a broader mismatch between supply and demand.

Analysts had been warning for some time that an imbalance was building in the tanker sector with new vessel orders falling drastically during the pandemic. As a result, just two supertankers are coming online this year.

As such, Nordic American, with its relatively young fleet of Suezmax tankers, should be in a great position to benefit during the medium term. The issue is, it needs to perform better than it did it Q1. It underperformed all of its peers, and it’s not clear why.

Currently, the stock offers a whopping 11.2% dividend yield.

Phoenix Group

Shares in Phoenix Group (LSE:PHNX) have recently fallen after announcing the possible sale of its SunLife business. In turn, this pushed the dividend yield above 10%.

The UK’s largest long-term savings and retirement business is transitioning from a closed-book life consolidator to a purpose-led retirement savings and income business.

It’s much more growth-oriented than it used to be, and that’s why the sale of SunLife doesn’t bother me. If it’s part of the transformation plan, I’m all for it.

Phoenix is also seizing the opportunities presented by the Pension Risk Transfer trend, supported by its in-house asset management expertise.

For now, interest rates remain an issue, putting downward pressure on asset prices. However, I certainly believe it’s a FTSE 100 stock worth watching closely.

TBC Bank Group

TBC Bank (LSE:TBCG) is a Georgian banking group listed on the UK stock exchange. The stock’s seen some pull back in recent months due to political factors.

With thousands taking to the streets of Tbilisi to protest against the ‘foreign agents’ law, and an election in a few months, investors are rightly concerned about stability.

Stability is key to economic growth, and banks are cyclical stocks. And this is why TBC Bank stock has dipped along with its Georgian peers.

I certainly think this is a stock worth keeping an eye on. Georgia has been Europe’s fastest growing economy since the pandemic and, politics aside, it could be a great growth market to have exposure to.

The stock currently offers an 8.8% dividend yield.

If I invested £10,000 in these three stocks, I could earn £1,000 annually in passive income and I think it’s worth keeping up to date with any developments relating to them.

Should you buy Phoenix Group Holdings Plc now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

More reading

James Fox has positions in Nordic American Tankers Limited and Phoenix Group Holdings plc. The Motley Fool UK has no position in any of the shares mentioned. 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.