Yields of up to 8.7%! 4 UK income stocks I’d buy to own for 10 years

2023 is tipped to be another great year for dividend investors. Here are several top income stocks (including three investment trusts) on my own shopping list.

Royston Wild ❯

I am a seasoned freelance financial journalist specialising in global stock markets. I was formerly a stocks and commodities reporter -- and editor of print and online FX market coverage -- at Shares Magazine, providing information and analysis for readers to make sound investment decisions in the UK and overseas. I was also a regular contributor to the magazine's extensive catalogue of bookazines and trading guides. Prior to this I was a reporter with the BaseMetals.com and TheBullionDesk.com newswires, breaking the latest news and providing in-depth analyses of the base and precious metals markets.

Published 31 December, 2022 7:12 am GMT

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I don’t have a unlimited supply of cash with which to buy UK income stocks. But here are several I’d like to buy in 2023 if I have the chance.

I think they could deliver excellent passive income over the next decade.

Warehouse REIT

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As a dividend investor I like real estate investment trusts (or REITs). They have to pay 90% of yearly profits out in the form of dividends.

This is why I’d invest in Warehouse REIT. It means the company sports a healthy 6% dividend yield for FY23.

I also believe it’s a top investment due to its focus on leasing out storage and logistics hubs to businesses. This is a market that’s tipped to grow strongly as e-commerce explodes.

Market research firm IMARC says the UK logistics market will expand at a compound annual growth rate of 6.28% between now and 2027.

I’d buy this REIT even though a future lack of acquisition targets could derail its growth strategy.

Ecofin US Renewables Infrastructure Trust

There are stacks of renewable energy stocks that UK investors can buy today. I think Ecofin US Renewables Infrastructure Trust might be one of the best ways to profit from the green revolution.

You see, the US is one of the best places for firms like this to operate. Enormous tax breaks are available as the government scrambles to hit ‘zero carbon’ electricity by 2035. The market is also huge. Ecofin says that the renewable power sector in the States provides a $360bn growth opportunity over the next decade.

Producing power from wind and solar assets can be problematic. Bouts of prolonged adverse weather can take a big bite out of profits. But I still think stocks like this are attractive to own.

Oh, and Ecofin’s dividend yield for 2023 sits at an impressive 6.8%.

ITV

FTSE 250 broadcaster ITV operates in a very competitive industry. In fact, the fight for viewers is more intense than ever as traditional television channels go head-to-head with streamers like Netflix and Amazon.

Yet ITV is making a decent fist of taking on its rivals, driven by the huge success of its own video-on-demand operation. Streaming hours that can be monetised across its free and paid-for platforms rose 10% between January and September. The launch of its ITVX platform this month could give viewing numbers another significant boost too.

ITV’s dividend yield for 2023 currently stands at 6.6%.

Ediston Investment Property Company

Ediston Investment Property Company is another top investment trust on my radar. This is because of its focus on the retail parks segment, a market tipped for rapid growth in the post-pandemic era.

The forward dividend yield here comes in at 8.7%.

Large retail assets provide customers with benefits like free parking, extensive product ranges and acres of personal space. Their ease of access by car and large stockrooms make them ideal for click & collect too. So footfall is also benefiting from the growth of online shopping.

I’d buy Ediston even though the weak retail environment today could throw up challenges. Rental collections could dip if its tenants start going out of business.