6%+ dividend yield! Three I would buy to target an income of £1,155 by 2025
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We're now two-thirds of the way to 2024, so it's time to think about which stocks to buy next year. I'm making a list of dividend stocks and recently added the following three to my short list.
| Company | 2025 dividend yield |
|---|---|
| Alternative Income REIT (LSE:AIRE) | 8.2% |
| Central Asia Metals (LSE:CAML) | 9% |
| The Epwin Group (LSE:EPWN) | 6% |
As you can see, each of these companies offers a profit margin north of 3.5%. FTSE 100 average. If the City's predictions are correct, an investment of £15,000 spread evenly across the board would give me an income of £1,155 by 2025.
I think these high paying stocks will grow dividends over the long term as well. Here's why I'm considering adding them to my stock portfolio.
REIT data
Penny stocks are often sought after because of their excellent growth potential. But in the case of Alternative Income REIT, this is a potential dividend pick.
This small fund is a real estate investment trust (REIT). Therefore, it must pay at least 90% of the annual rental income in the form of dividends.
Alternative Income leases various properties such as hotels, gyms, hospitals and residential properties. It also has tenants locked into long leases (its weighted unexpired lease term is over 16 years).
Combined, these factors provide the company with strong cash flow throughout the economic cycle, an important factor for reliable long-term profits. That said, it's good to remember that income and asset prices are sensitive to interest rate movements.
Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content of this article is provided for informational purposes only. It is not intended to be, and does not constitute, any form of tax advice.
A miner
Mining stocks often have wild dividend histories. When stock prices fall, dividends usually follow suit as profits always fall.
Still, despite the risk, City analysts expect Central Asia Metals – which owns copper and lead-zinc assets in Kazakhstan and North Macedonia respectively – to still pay big dividends in 2025.
They also expect shareholder payouts to increase over the next year. I believe that the business can bring big solid profits and growing profits in the long term, driven by megatrends such as the growth of cities around the world and the growing economy.
With cash in the bank of $56.4m as of June, Central Asia Metals has a strong balance sheet to help it pay those big near-term dividends.
Supplier of building materials
The Epwin Group offers a variety of construction materials. This includes doors, windows, shutters and plumbing. As a result, it is well positioned to capitalize on the UK house building boom. The new Labor government has vowed to build 1.5m new homes by 2029.
But Epwin does not rely solely on the new construction market to drive profits and dividends. It also supplies large volumes to the repair, maintenance and improvement (RMI) market. Given the age of British housing, this should support income for years to come.
City analysts expect profits and dividends here to rise annually through 2026 at least. This is despite the risk that interest rates may remain near current highs and reduce demand for new homes.
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