3 of my top dividend shares to buy in 2023!

Buying dividend shares might be the best way to try and make positive returns in the New Year. Here’s a cluster of top income stocks on my radar.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’ve been looking for the best UK stocks to buy and hold for the long term. But I’ve also been seeking dividend shares that could provide tasty passive income in the new year.

Here are three companies I think offer the best of both worlds.

Anglo American

Mega miner Anglo American (LSE:AAL) produces copper, nickel, iron ore and other everyday essential commodities. I therefore expect its revenues to soar as the world embarks on a new commodities supercycle.

Take copper alone. Analysts at Fitch expect red metal demand for the green energy revolution to surge 13% each year over the next 10 years.

Anglo American’s profits could take a hit next year as the global economy cools. Commodities consumption could also suffer badly if the Covid-19 crisis in China worsens.

But, pleasingly, the FTSE 100 miner’s predicted dividend for 2023 is covered 2.4 times by anticipated earnings. This gives a wide margin of safety in case profits disappoint.

Anglo American’s dividend yield for next year sits at a mighty 6.1%.

Triple Point Social Housing REIT

Real estate investment trusts (REITs) can be great ways to generate passive income. This is because their classification under this banner obliges them to pay a minimum of 90% of annual profits in the form of dividends.

Triple Point Social Housing REIT (LSE:SOHO) is one of my favourite dividend stocks for next year. Its dividend yield for 2023 stands at 8.3%.

Property stocks have a great ability to raise rents to protect profits from increased costs. This is a huge advantage given that inflation is tipped to remain high in 2023.

I also like the fact that rental income from residential property is usually more predictable than that of other classes. So Triple Point could be well-placed to weather a prolonged downturn in the UK economy.

I’d buy the business even though a lack of attractive acquisitions could dent its growth plans. The supported social housing (SSH) segment in which it operates is tipped for rapid growth.

US Solar Fund

Renewable energy stocks offer terrific investment potential as the transition to green power sources accelerates. It’s why I invested in The Renewables Infrastructure Group earlier this year.

US Solar Fund (LSE:USF) is another attractive low-carbon share I’d buy today. The business owns more than 40 solar farms in North Carolina, Utah, California, and Oregon. Thanks to hefty tax credit awards in 2022, these territories have become even more profitable places for renewable energy stocks to do business.

Electricity use remains broadly constant at all points of the economic cycle. So profits at the fund might hold up better than those of other UK shares as conditions worsen. That’s assuming it doesn’t endure crippling costs to keep its panels in operation (solar power is notoriously expensive to produce for now).

For next year, US Solar Fund carries an enormous 6.7% dividend yield.  

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has positions in Renewables Infrastructure Group. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »

Investing Articles

2 FTSE dividend shares yielding more than 6% with P/Es of less than 9!

Harvey Jones picks out two brilliant FTSE 100 dividend shares that yield more than 6% but are selling at strangely…

Read more »

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »