Generating a second income will be a key goal for many stock market investors this month. I’ve been searching for UK dividend shares that could be useful additions to a passive income portfolio.
When investing for a second income, it’s important to note a stock’s ex-dividend date. Shareholders who own positions before this date are entitled to a dividend payment. Those who buy on the ex-dividend date or later have to wait until the next payout.
Here are three FTSE 350 stocks with ex-dividend dates in August that investors may wish to consider buying.
Should you invest £1,000 in Glencore Plc right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?
Shell
First on my list is the FTSE 100‘s second-largest company by market cap — the oil and gas giant Shell (LSE:SHEL).
- Ex-dividend date: 10 August
- Dividend yield: 3.9%
Over the past 18 months, oil majors have benefitted from booming commodity prices. Since sinking to a five-year low in October 2020, the Shell share price has climbed 147%.
What’s more, a 15% hike in the latest quarterly dividend to $0.33 per share and a $3bn share buyback programme are positive developments. The firm aspires to increase dividend payouts by 4% every year.
However, commodity prices are now falling. Consequently, Q2 profits slumped to $5bn — a 50% decline compared to the same period last year. In addition, it might prove difficult for the company to achieve its aim of “creating more value with less emissions“.
I’m sceptical about Shell’s plans to become a net zero business by 2050, but technological breakthroughs in developing low-carbon synthetic fuels could be transformative. Plus, in the medium term, I think it’s likely global demand for fossil fuels will remain robust.
Investec
Next, there’s the FTSE 250-listed banking and wealth management group Investec (LSE:INVP).
- Ex-dividend date: 17 August
- Dividend yield: 6.5%
Rising interest rates can spell trouble for stocks, but banks often benefit. Base rates in South Africa and the UK are at 14-year and 15-year highs respectively. That’s good news for Investec, since its core operations are in these jurisdictions.
What’s more, Investec has aggressively expanded its M&A capabilities recently, quintupling its dealmaking head count over five years. This reflects anticipated growth in demand for investment in Africa.
However, South Africa’s political instability is a notable headwind. Poverty, income inequality, and persistent unemployment in the country are major risks facing Investec shares.
Nonetheless, at a price-to-earnings (P/E) ratio of just 5.4, I think the stock could be attractively valued today.
Glencore
Finally, FTSE 100 commodity trading and mining company Glencore (LSE:GLEN) completes the trio.
- Ex-dividend date: 31 August
- Dividend yield: 7.5%
The Glencore share price has fallen by 16% in 2023, which might indicate a potential buying opportunity. But, there are possible pitfalls for investors. The fallout from last year’s bribery conviction continues to hurt the company as successive fines chip away at profits.
In better news, the firm’s trading division is firing on all cylinders. Expected full-year earnings before interest and taxes of between $3.5bn and $4bn trumps the top-end of Glencore’s long-term yearly guidance at $3.2bn.
Moreover, a P/E ratio of just 4.4 looks like an appealing multiple to me. Provided the company can successfully navigate its legal difficulties, I think its future looks bright.
If I had spare cash, I’d buy all three stocks today.
