5 FTSE 100 stocks I’d buy for a passive income

first_img5 FTSE 100 stocks I’d buy for a passive income Enter Your Email Address Rupert Hargreaves | Thursday, 7th January, 2021 See all posts by Rupert Hargreaves I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Markets around the world are reeling from the coronavirus pandemic…And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. 5 Stocks For Trying To Build Wealth After 50 Image source: Getty Images center_img I’m on the lookout for blue-chip FTSE 100 stocks to provide a passive income stream. But I’m not just looking for any dividend stocks. I want to buy companies that have a strong track record of increasing payouts to investors, as well as a high level of dividend cover.Passive income playsTwo companies immediately jump out. B&M European Value Retail and Johnson Matthey currently support dividend yields of 2.2% and 2.6% respectively. These are around half of the market average. Nevertheless, they are both well covered by earnings per share. The two organisations have a dividend cover ratio of nearly three. That suggests earnings could fall by 50% and the distributions would still be safe. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…What’s more, B&M has upped its dividend to investors every year since 2015. The payout has increased at an average annual rate of 19%, rising from 3.4p to 11.2. That’s excluding any special dividends.Johnson Matthey cut its dividend in 2020, although analysts are expecting a quick recovery over the next two years. Before the cut, the company had increased its distribution to investors every year for seven consecutive years. Based on these track records, I believe these two FTSE 100 businesses would make great additions to any passive income portfolio.FTSE 100 yield For a higher level of passive income, investors could buy GlaxoSmithKline. At the time of writing, this healthcare champion supports a dividend yield of 5.7%. The dividend cover has risen in recent years as earnings have increased. It currently stands at around 1.5, which is relatively low compared to the groups above, but still acceptable, in my opinion.The company hasn’t increased its distribution for the past few years. Still, due to the defensive nature of the business and sustainability of the payout, I’m willing to overlook this lack of growth.One sector that’s shown itself to be extremely resilient over the past 12 months is the supermarket sector. As a result, I believe this is one of the best places to look for income in the current environment.Retailers such as Morrisons have benefited from an increase in demand for essential products, as well as the closure of hospitality businesses. Market research firm Kantar believes consumers spent a record £12bn in supermarkets in December.Morrisons recently reported a near 9% year-on-year increase in sales over the festive period. This growth should underpin the company’s dividend for 2021. Analysts forecast a potential yield of 5% for 2021, which should be covered as much as 1.6 times by earnings per share.Finally, I don’t think any passive income portfolio will be complete without some exposure to infrastructure. Infrastructure funds invest in assets such as bridges, buildings and roads. These assets have lifespans of decades and provide a steady stream of income in all environments.3i is one of the largest infrastructure funds in the country. Its asset base has helped the company increase its payout to investors every year for the past six years. At the time of writing, the stock supports a dividend yield of 3.4%.  Click here to claim your free copy of this special investing report now! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended B&M European Value and GlaxoSmithKline. 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. Our 6 ‘Best Buys Now’ Shareslast_img read more

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