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Typically, an investor focuses on the dividend yield of a particular stock when trying to weigh up whether to buy or not. Instead, it’s possible to look at targeting a specific group of stocks for passive income potential. For example, what if someone had a £5k pot and wanted to allocate it to a handful of high-yielding options? Here’s what it could look like.
Pushing the limits
I’m going to assume that the £5k is split between five different options with £1k allocated to each idea. In filtering for the top yielding shares in the FTSE 100, this would include M&G, Legal & General (LSE:LGEN), Phoenix Group, Taylor Wimpey and British American Tobacco. The average yield for this group of stocks would be 8.38%.
This means that over the course of the next year, the £5k total could yield £419 in dividend income. This is very respectable and hard to beat given that this basket is…
