We’re only a few weeks away from the end of the year. I like to think that I’ve made some good dividend income from 2022. However, I want to try and make more in 2023.
Buying some of the top income stocks now with my spare cash can help me to get a jumpstart on the new year. Here are some of the options I’m considering.
Tapping into emerging markets
I’m thinking about buying some shares of Ashmore Group. The investment manager focuses on emerging markets. This doesn’t just include stock picks, but also investments in the bond and currency markets.
At the moment, the company has a dividend yield of 6.77%. With a share price of 250p, I’d aim to pick up 150 shares, totaling £375. This would give me £25.38 per annum of income, should the dividend per share be maintained at the current level.
The reason why I think this is a smart pick is because of the area Ashmore Group focuses on. I know that there are some great upcoming economies in Asia, South America and Africa. However, as a retail investor I’m very restricted in getting access to stocks or other investment opportunities here. So, buying Ashmore Group shares allows me to benefit from growth in emerging markets in years to come.
Sure, emerging markets often struggle the most during a global economic slowdown. But I’d rather be buying as the market falls, rather than buying when the market is already rallying higher.
Mining stock staples
As for mining stocks, I’ve got my eyes on Glencore and Antofagasta. The dividend yields are 4.37% and 7.57% respectively. Using the current share prices, I could buy 30 shares of Antofagasta, costing me £428.70. With Glencore, I’d consider picking up 100 shares, costing me £502. When I put it all together, I’d be able to enjoy £54.39 in dividend income from this sector.
As one of the largest global copper miners, owning Antofagasta shares would allow me to get exposure to the metal. Even though the copper price is down 12% over the past year, it has managed to pop 13% higher in the past month. The broad range of uses for the metal, particularly in electrical goods, means that demand should always be strong.
Glencore can seem to do no wrong, benefiting from volatile commodity prices this year. Even though I think the dividend yield is good enough for an income stock, I should be able to top this up with capital gains. It’s one of the best performing FTSE 100 stocks over the past year, gaining 35%.
Regularly investing in these income stocks
My 280 shares should make me almost £80 in dividends over the next year. Yet I don’t want to stop there. My initial investment of £1,305.70 eats up my spare cash, but I should have more in early 2023. I can use this to put more money to work to increase my 2024 income. I can also consider taking my £80 and reinvesting it. This can help to compound my returns.
I’m seriously considering buying these income stocks to put this plan into action shortly.
