Latest news with #TargetHealthcare
Yahoo
2 days ago
- Business
- Yahoo
£10k to invest? A UK share, investment trust and ETF to consider for an £870 second income this year
Diversification's critical when seeking a reliable second income over time. A broad portfolio can absorb individual dividend shocks better than one containing just a handful of stocks. Spreading risk over a number of investments doesn't mean settling for inferior returns either. Take the following shares, investment trusts and exchange-traded funds (ETFs), for example: Stock Forward dividend yield Target Healthcare REIT 8.6% iShares World Equity High Income ETF 9% Phoenix Group (LSE:PHNX) 8.5% As you can see, the dividend yield on each of these stocks comfortably beats the FTSE 100 average (currently around 3.4%). It means a £10,000 investment spread equally across them could — if broker forecasts are accurate — provide an £870 passive income over the next year alone. What's more, a portfolio containing just these three stocks would provide (in my view) exceptional diversification. In total, these investments deliver exposure to 346 different companies spanning multiple sectors and global regions. Here's why I think they're worth serious consideration today. Real estate investment trust (REIT) Target Healthcare's set up to deliver a steady stream of dividends to shareholders. These entities must pay at least 90% of annual earnings out this way in exchange for juicy tax breaks. By focusing on the care home sector — it owns 94 in total — this trust has exceptional long-term potential as the UK's elderly population booms. It also benefits from the sector's highly stable nature, while inflation-linked leases boost earnings visibility still further. Be mindful though, that labour shortages in the nursing industry could dent future returns. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. The iShares World Equity High Income ETF is focused primarily on high-yield and dividend growth stocks. In total, it holds 344 different businesses around the globe, from tech giants Nvidia and Microsoft to insurers like Axa, telecoms such as Deutsche Telekom and banks such as JPMorgan. However, it also earns income from safe havens like cash and US Treasuries, which provides strength during economic downturns. The fund's focused primarily on US shares. In total, these account for 67.8% of total holdings. I don't think this is overly excessive, but bear in mind that this could impact the fund's growth potential if sentiment towards US assets more broadly cools. Phoenix Group, like Legal & General and M&G, is a highly cash-generative financial services provider. And so like those other businesses, it offers one of the three highest forward dividend yields on the FTSE 100 today. In fact, Phoenix has a sound track record of beating its cash generation forecasts and providing subsequent meaty windfalls to shareholders. During 2024, total cash generation was expected at £1.4bn-£1.5bn. In the end it came in at a whopping £1.8bn! Like Target Healthcare, I believe it's well-placed to capitalise on Britain's growing older population. I'm optimistic demand for its savings and retirement products will grow steadily. On the downside, this year's predicted dividend is covered just 1.1 times by expected earnings. However, a Solvency II ratio of 172% could give it scope to meet analysts' dividend forecasts, even if this year's profits disappoint. The post £10k to invest? A UK share, investment trust and ETF to consider for an £870 second income this year appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool JPMorgan Chase is an advertising partner of Motley Fool Money. Royston Wild has positions in Legal & General Group Plc and Target Healthcare REIT Plc. The Motley Fool UK has recommended M&g Plc and Nvidia. 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. Motley Fool UK 2025 Sign in to access your portfolio
Telegraph
6 days ago
- Health
- Telegraph
Rachel Reeves forced a rise in care home fees, but this trust won't sacrifice quality
Questor is The Telegraph's stock-picking column, helping you decode the markets and offering insights on where to invest. Ensuring that loved ones with dementia are well cared for will be something that preys on the minds of many readers. About 4.2pc of all people over the age of 65 had been diagnosed with dementia by the end of April this year, according to NHS England data. That is a percentage that rises with age – and the UK population is ageing. Between 6,000 and 8,000 additional beds in care homes are being built each year, but this is not enough to keep pace with demand. A key aspect of the dementia care solution is the quality of specialist care homes, and the Target Healthcare real estate investment trust (Reit) was established in 2013 with that consideration in mind. Two years before its launch, Target's managers saw a care home sector in crisis. In 2011, sector leader Southern Cross had overreached itself, ultimately collapsing that summer.
