I recently read an incredible statistic that said there are on average 39,000 homeowner remortgages each month. Given the increase in mortgage rates over the past six months, more and more are going to have a higher rate going forward (myself included). So if I can do anything to help provide myself with some extra cash to help fund this, I’m keen. As a result, I’ve found two income stocks that I think I might buy.
Global expansion moving ahead
The first company I’m keen on is IG Group (LSE:IGG). It has a dividend yield of 5.54%, with the share price up 1.5% over the past year. The trading platform is growing in size and reach, pursuing international expansion.
In the latest quarterly update (for the three months to the end of August), group revenue jumped 11% versus the same period last year. What impressed me was the growth in Tastytrade, a US-based business that IG has acquired. Revenue from this part grew by 62% versus last year.
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I think that the expansion into the US and Asia could yield rich results for IG over the coming years. It has the technology and the experience to gain a lot of customers from these regions.
In turn, this should help to maintain revenue growth and also filter down to net profit. As an income investor, this is key to support dividend payments.
A risk is that the company operates in a very competitive environment. There are other FTSE-listed stocks such as Plus500 and CMC Markets that are vying for the same customers as IG.
A property income stock
Another option to help earn some passive income to aid my mortgage payments is via Supermarket Income REIT (LSE:SUPR). It offers me a 5.64% dividend yield. The share price has fallen 12.8% over the last year.
The name of the company is a huge spoiler alert for any potential investor! It buys sites that it then leases out to the major supermarkets in the UK. As a result, the real estate investment trust (REIT) price should reflect the value of the assets owned. Further, it can pay out income to investors due to the cash flow received from the supermarkets.
I get that people are concerned about the UK property market. I’m in that boat too when it comes to the residential market. But I feel that supermarkets are pretty good tenants from a commercial viewpoint. They’re large enough to have the cash flow to keep paying. Further, I don’t see customer demand for supermarket products falling, even during a recession.
Clearly, the fund isn’t immune to a fall in the value of the portfolio that could happen next year. This would drag down the net asset value (NAV). If I’m forced to sell due to needing cash during this period, I could book a loss.
Once I have some free cash in the New Year, I’m seriously considering buying both stocks for my portfolio.
