Moreover, it doesn’t require having a whole lot of money to get started. In fact, I think an investor could build a portfolio of solid dividend-generating shares for just £100 a month.

Passive income winners

Assuming that money is within reach, the key is buying stocks that should, bar a ‘black swan’ event, continue paying dividends whatever the weather. Utility firms are a great example, hence my first pick is power provider National Grid. In charge of much of the UK’s energy-related infrastructure, it yields a chunky 5.1% right now.

Tritax Big Box shares look expensive. Nonetheless, the demand for the sort of warehouse space this real estate investment trust (REIT) owns should continue for many years to come. After all, the popularity of online shopping looks set to only increase. I’d therefore begin building a position with the intention of adding more in moments of general market malaise. The yield is 2.8%

Online trading firm IG Group remains one of my favourite listed companies. While the threat of increased regulation is never far away, the company’s bumper levels of free cash flow should ensure there’s no danger of the dividend being cut any time soon. It’s also a potential hedge if markets get volatile. IG yields 5.7% at the moment.

Boasting bursting lists of recognisable brands that shoppers tend to buy through habit, Britvic and Unilever shares — and their respective 2.7% and 3.7% yields — also get my votes. Both have near-perfect records of growing dividends over the years.

Here’s what I might get

Based on their forecast dividends at the time of writing (and assuming I invest equal amounts into each), the above five stocks generate an average yield of 4%. In other words, I’d get £4 in dividends for every £100 I invest. That’s an awful lot more than what I’d get from even the best Cash ISA on the block.

Are there ways of generating more passive income from UK stocks? Absolutely. However, one needs to question just how secure the payouts from cyclical companies involved in, say, banking, housebuilding and mining actually are.

Of course, there’s no guarantee that even the companies I’ve picked out will always be able to return cash to their owners. However, I have made sure to diversify across sectors. So even if one encounters a setback, the level of income should still be decent.

Patience required

Regardless of which stocks are selected, one thing worth highlighting is the time taken to generate a sizeable passive income stream. Initially, the money received will be negligible because the amount invested is small. That may not suit those with itchy trigger fingers and limited patience.

There are ways of speeding things up. Obviously, stashing more than £100 away every month is one option. Saving on fees by using a stockbroker’s regular investment scheme will also help.

If the income isn’t needed right now, an even better solution is to reinvest dividends. This boosts the accumulation of capital via compounding and could give me an even better passive income stream to draw on when I really want to put my feet up.

The post 5 passive income ideas for £100 a month appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Paul Summers owns shares in IG Group. The Motley Fool UK has recommended Britvic, Tritax Big Box REIT, and Unilever. 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.

The idea of earning passive income from AIM stocks might seem a little odd. After all, a substantial portion of the junior market is made up of growth-focused companies. What’s more, small-caps tend not to be the sort of shares that allow one to sit back, relax and collect cash. After a bit of digging, however, I’ve found three I’d buy.

Ienergizer

Operating on six continents, Guernsey-based Ienergizer (LSE: IBPO) provides outsourcing services to companies in fields including banking, healthcare and gaming. This diversification should make earnings — and therefore dividends — pretty secure. Analysts have the stock returning 15p in the current financial year. That gives a juicy yield of 5%. 

Other things I like about IBPO include the high returns on capital and reasonable valuation (17 times earnings). The fact that founder Annil Aggarwal holds a massive amount of shares should also ensure that his interests are aligned with those of retail investors like me.

As with many AIM stocks however, IBPO could prove to be a volatile holding. The ‘free float’ — the amount of stock available to trade on the market — is very small at just 17%. This could mean it takes only a few buys or sells to make the share price motor or sink respectively.

Urban Logistics REIT

Urban Logistics REIT (LSE: SHED) is a second AIM stock I’d buy. Based on the explosion in demand for warehouse space, I reckon this is a pretty bulletproof option for dividends. 

The company has 76 assets on its books and an occupancy rate of 93%. Tenants include DHL, Amazon and Hermes. Margins for this kind of work tend to be very good indeed. 

Another attraction is the valuation. SHED may be a lot smaller than peers such as Tritax Big Box, but it’s also cheaper to buy. The stock currently trades at 21 times earnings. A 4.9% yield is also far more than I’d get from the FTSE 250 constituent. 

I can’t see too many downsides to me adding SHED to my portfolio. That said, a slowdown in the UK economic recovery for whatever reason could still impact sentiment.

Then again, a move away to the main market is looking increasingly likely. This increase in the liquidity of its stock should attract the attention of more investors and help push the shares higher. 

FRP Advisory

A final AIM stock I’d buy would be FRP Advisory (LSE: FRP). The company specialises in corporate finance, debt and restructuring. In its own words, FRP gets “under the skin of businesses in complex and difficult situations”. Thanks to Covid-19, I don’t think there’ll be a shortage of clients once government support fizzles out.

Trading is already going well. Back in July, FRP reported a 25% jump in revenue to £79m in its last full year. As one would hope, the firm’s balance sheet also looks robust with a net cash position.

That said, it’s worth mentioning that the dividends are the lowest of the three mentioned. A 4.37p per share distribution equates to a 3.7% yield. That’s only slightly more than I’d get from buying a FTSE 100 tracker.

So, while I like the defensive nature of this business, I’d need to question whether it’s worth the hassle if truly passive income were my primary objective. It helps that FRP is the cheapest AIM stock mentioned here (16 times earnings).

The post 3 AIM stocks I’d buy for passive income appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Tritax Big Box REIT and has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. 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.

Powering on

Having once owned the stock, XP Power‘s (LSE: XPP) progress has served to remind me that it’s often a good idea to really run your winners. As I type, the stock’s up 35% in 12months. While some of this will be due to the wider market recovery, investors have clearly been cheered by the company boasting of a “strong order book.”

XP Power’s shares traded on 27 times forecast earnings on Friday. That’s hardly cheap considering rising Covid infection rates. Foreign exchange movements could also prove a drag for the mid-cap.

To quote Warren Buffett however, I’d rather buy “a wonderful company at a fair price than a fair company at a wonderful price.” XP is a leading manufacturer of critical power control components for the electronics industry. Once onboard, its customers rarely look elsewhere. 

So long as I wasn’t attempting to move in and out of the stock quickly (which isn’t the Foolish way), I’d have no issue buying some XPP shares before half-year numbers on 2 August.

A quality FTSE 250 stock

As a holder of the stock already, I’ll also be paying close attention to FTSE 250 member Greggs (LSE: GRG) next month. It reveals interim results to the market on 3 August.

The question isn’t whether Greggs is a great company. It’s got a strong brand, good leadership and has shown an ability to tap into emerging trends (vegan food) before others. Pandemic aside, returns on capital have long been great. 

No, the question is whether 27 times earnings is a reasonable price to pay now. Assuming Greggs has benefitted from more people hitting the road for staycations this year, I think it might be. Growth in retail sales over May and June also bodes well. 

Sure, the time to really pile into Greggs was last September. And yes, buying now is risky if the Delta variant really gets out of control. Notwithstanding this, I’d still buy into any weakness. The long-term outlook remains solid. 

Strong growth ahead

My final pick is real estate investment trust Tritax Big Box (LSE: BBOX). I’d be seriously amazed if next month’s interim results (5 August) weren’t decent. After all, multiple lockdowns and the subsequent explosion in online retail have pushed demand for warehousing through the roof. 

None of this has escaped the market’s attention. BBOX shares are up 38% since this time last year. As a result, shares in this FTSE 250 member now trade at a steep premium to their net asset value (the value of Tritax’s property minus its liabilities). Some might think now’s a risky time to buy.

But let’s be frank. Demand for BBOX’s buildings won’t disappear. In fact, I think we’re still in the early stages as far as online shopping is concerned.

On balance, I’d be happy to buy Tritax today to secure the dividend stream, However, I’d also be comfortable adding to my position if the share price subsequently lets off steam. 

The post 3 FTSE 250 stocks to buy before August appeared first on The Twelfth Magpie.

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• Here’s how much passive income 1,000 Greggs shares could pay…
• Here’s how a 40-year-old with no SIPP today could have one worth over £1,153,000 by age 67       
• Here’s how high these brokers think Greggs shares could soon climb!
• Here’s why I’m hanging onto my Greggs shares, even though they’ve fallen
• The Greggs share price has crashed 50%! Now see what it could be worth this time next year

Paul Summers owns shares in Greggs. The Motley Fool UK has recommended Tritax Big Box REIT and XP Power. 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.

As my Foolish colleague Malcolm Wheatley commented in his recent piece: “Inflation is a devastating destroyer of wealth and standards of living.” Strong words but he’s absolutely on the money.

Like Malcolm, I believe the best way to beat inflation is via the stock market. However, there are certain parts that could prove particularly good destinations for my cash.

Buy quality to beat inflation

I’m a big fan of quality stocks. These are companies that have strong brands, sound finances, consistent earnings, and big profit margins. On a geekier note, they also tend to be capital-light and able to generate great returns on the money they invest, otherwise known as Return on Capital Employed (ROCE). Let me explain.

Naturally, I want a business that produces a higher return than inflation. If prices jump by 10%, any stock generating the same ROCE (or worse) isn’t really doing anything. However, one generating a ROCE of 20% is still doing well for investors, under the circumstances.

I’m not the only one who thinks this is a good way to beat inflation. Biased he may, be but top UK money manager Terry Smith thinks stocks in the Fundsmith Equity fund have that quality tilt which should preserve (and eventually enhance) investors’ wealth. That said, there’s nothing to stop the actual value of these holdings from falling if investors head for the exits.

Grab some shiny stuff

Another way to beat inflation would be to have some exposure to precious metals. One obvious candidate here is gold. Historically, anything connected to the shiny stuff tends to do well in inflationary times because of its trusted ability to hold its value.

If stuffing a load of gold bars under the bed doesn’t appeal, UK investors have a number of options. In the FTSE 100, there’s producer Polymetal International. In the FTSE 250, there’s Centamin. If diversification was important, I could buy an exchange-traded fund (ETF) that holds the biggest miners around the world.

Another option would be to buy a passive fund that tracks the gold price. This might be the least risky option since it avoids any company-specific risks. That’s not to say it’ll always be a comfortable ride, of course, especially if interest rates rise. After all, gold doesn’t generate income on its own! 

Don’t forget real estate

Thanks to the growing desire to work from home, post-coronavirus, the UK property market has been in fine form in 2021. However, owning stocks that have links to real estate can also help investors beat inflation. 

Step forward REITs (Real Estate Investment Trusts). These are listed companies that generate income for holders from property. Although nothing can be guaranteed, this asset tends to increase in value when inflation rises because price increases are passed through in rental leases (assuming demand for property is there). 

As you might expect, there’s no shortage of options out there for UK investors. These can be invested in office space, healthcare buildings and retail units. Thanks to the huge and growing popularity of online shopping however, my favourite pick in this space is warehouse owner Tritax Big Box.

The post 3 ways to beat inflation with stocks appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Paul Summers owns shares in Fundsmith Equity. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

Tritax Big Box

Shares of real estate investment trust Tritax Big Box (LSE: BBOX) have been in fine form of late. Anyone snapping up the warehouse provider roughly 11 months ago would have more than doubled their money.  

I’m not sure we should be surprised by this performance. After all, the boost to online shopping as a result of the coronavirus means many companies are desperately looking for warehouse space to expand their digital footprints.

In addition to this, I’ve long been bullish on Tritax as a source of dividends. Analysts are expecting the company to return 6.71p per share in the 2021 financial year. That becomes a yield of 3.7% at the current share price. That’s certainly not the highest income stream available in the FTSE 250. However, based on the firm’s growth prospects, I would think it’s one of the most secure. 

A downside to all this is that the shares are changing hands for 26 times forecast earnings. That’s not cheap, arguably making the stock riskier than it first appears. With this in mind, I can’t see Tritax moving all that much higher in value when full-year results are announced on 10 March.

Greggs

Sausage-roll seller Greggs (LSE: GRG) releases its latest set of full-year numbers to the market on 16 March. Like Tritax, its share price has been on a tear of late, helping to justify my ‘buy’ call on the stock last year. 

Is the stock now in danger of overheating? It’s a tricky one to call. As things stand, high streets are still deserted and could remain that way if Boris Johnson’s roadmap doesn’t go to plan. Then again, more positive news flow on the pandemic over the next few months could quite reasonably send the shares higher. 

As a committed long-term investor, I doubt I’ll be jettisoning my shares in Greggs next month. Even so, I’m hoping recent momentum will continue.

One reason to be optimistic is that the company has already sought to keep expectations low. Back in January, it said that profits were unlikely to return to pre-COVID levels until 2022 at the earliest. Under-promising and over-delivering is never a bad strategy in my book!

Computacenter

A final FTSE 250 share worth watching in March is Computacenter (LSE: CCC). The £2.5bn cap has been a huge beneficiary of the increased demand for IT infrastructure support over the pandemic.

CCC releases full-year results on the same day as Greggs. While I don’t expect any bad news, it will be interesting to see how the market reacts given that the shares have already doubled since the market crash.

Back in January, the company increased its guidance on full-year adjusted pre-tax profit for the second time in as many months. It also said that trading momentum since the coronavirus first began wreaking havoc showed “no sign of abating”. 

Of course, there’s a chance CCC’s valuation already reflects this.  As such, I’d be wary of assuming the shares will automatically hit another record high next month. The shares currently trade on 18 times earnings.

The post FTSE 250 stocks: 3 to watch out for in March appeared first on The Twelfth Magpie.

More reading

• Here’s how much passive income 1,000 Greggs shares could pay…
• Here’s how a 40-year-old with no SIPP today could have one worth over £1,153,000 by age 67       
• Here’s how high these brokers think Greggs shares could soon climb!
• Here’s why I’m hanging onto my Greggs shares, even though they’ve fallen
• The Greggs share price has crashed 50%! Now see what it could be worth this time next year

Paul Summers owns shares of Greggs. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

Tritax Big Box

First up is warehouse provider and FTSE 250 member Tritax Big Box (LSE: BBOX). With a portfolio value approaching £4bn, tenants include top tier stalwarts Next and Unilever as well as US giant Amazon. 

Thanks to Covid-19 showing yet again just how convenient/essential online shopping has become, I find it hard to be anything but bullish on Tritax’s share price over the long term. A looming recession may force many to tighten their purse strings temporarily, but the e-tail boom clearly has a lot further to go. 

And dividends? Right now, this real estate investment trust yields a chunky 5.1%, based on analyst estimates of a 6.72p per share payout in 2020. For context, only five companies in the FTSE 100 are yielding more (and I suspect one of these — BP — will need to cut at some point).   

Big cash returns, solid growth prospects: What’s not to like?

Primary Health Properties

The second real estate investment trust I think should remain a good pick for income investors, particularly after the last couple of months, is Primary Health Properties (LSE: PHP). As you may have guessed, this company invests in the freehold or long leasehold of primary healthcare facilities.

PHP’s portfolio currently consists of 510 properties, the vast majority of which are GP surgeries. Other assets are let out to NHS organisations, dentists and pharmacies. Importantly, nearly all of the rental income is backed by the government. This should give investors far more confidence that payouts will be maintained compared to elsewhere in the market.  

Unsurprisingly, a stampede for relatively ‘safe’ income havens means that the shares currently trade on a hefty premium to their net asset value. Notwithstanding this, I think buying now can still be justified based on the non-cyclical nature of its business. The likelihood that demand for healthcare will only grow due to an ageing UK population is also a big draw.

PHP currently yields 3.8%, which puts it roughly on par with a stock like Tesco. Speaking of which…

Supermarket Income REIT

The days of panic-buying toilet paper are long gone. However, the coronavirus crisis has still succeeded in highlighting just how defensive investing in the UK’s supermarkets can be. My third and final pick from this area is, therefore, Supermarket Income REIT (LSE: SUPR). 

The £500m trust rents out property to FTSE 100 titans Sainsbury’s, Morrisons and the aforementioned market-leader, Tesco. Walmart-owned Asda is also a tenant. 

In SUPR’s view, the fact that supermarket property yields have climbed in recent years is a reason to get involved. The trust aims to buy property in highly-populated residential areas, with strong transport links. An average lease of more than 15 years is also sought. Combined, these should give investors a stable source of income that rises with inflation.

SUPR is likely to return 5.8p per share in this financial year (ending June 30). Based on the current share price, this gives holders of this real estate investment trust a forecast yield of 5.4%. 

The post Want dividends? I like these top real estate investment trusts appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties and Tritax Big Box REIT. 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.

Of course, many people will simply consider this element of their wealth to be covered by the house they live in, which they will own outright once the mortgage is wiped. Others will want to take things further.

Today, I’m looking at a relatively fuss-free way of making extra cash from property.  Before doing so, however, it’s worth mentioning why this solution isn’t buy-to-let.

Whole lotta hassle

There are, of course, attractions to becoming a landlord. Rent received will cover (or go some way towards covering) the mortgage payments on the property that’s being let.

The fact that house prices gradually rise over time, albeit through a few inevitable market wobbles, also means the owner could/should benefit handsomely when they come to sell. Aside from this, tangible assets like an extra house or flat give some people peace of mind compared to numbers on a screen.

That said, the idea that becoming a landlord as an easy route to riches is most definitely flawed. As well as ongoing maintenance, tax considerations and legal hoops-a-plenty, those wanting to let a property need to be prepared for periods in which they may struggle to find a tenant. Owners must also have to contend with troublesome renters who don’t treat the flat or house with quite as much care as they would like.

Should the life of a landlord not be what you expected, it’s worth remembering that selling any property can also take a lot longer than you think. 

So, what’s the alternative? 

Here at the Fool UK, we think there’s a far less stressful way of getting exposure to this asset class beyond your own home. Real Estate Investment Trusts (REITs) are quoted companies that own and manage all sorts of commercial and residential property. Through buying into these companies, investors get a massive slice (usually a minimum of 90%) of the trust’s rental income.

Unlike the underlying properties, REITs are also liquid in that you can buy and sell them just like ordinary shares. A further benefit is that they allow investors to focus on niche areas of the market. 

If you think the demand for warehouses from companies like Amazon will continue growing, for example, then Tritax Big Box — which rents out such spaces — may be worth investigating further. It’s set to generate a yield of 4.8% for investors this year, based on the current share price.

If you suspect our tendency to hoard stuff isn’t going to disappear anytime soon, self-storage players Big Yellow or Safestore — yielding 2.8% and 2.2% respectively — could also be ideal additions to your portfolio. 

For those who prefer the passive approach, US giant iShares offers the UK Property UCITS ETF. For an ongoing charge of 0.4%, you can track the performance of an index composed purely of REITS and UK-listed real estate companies, the yield from which is currently 3.3%. 

Although nothing can be guaranteed — REITs have a tendency to be volatile during housing/general market downturns — these options should, in my opinion, be far more appealing to busy private investors.

The post Forget buy-to-let. I’d make money from property this way! appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

The UK’s landlords are bearing the brunt of the government’s sustained failure to solve the housing crisis. Rather than rectifying disjointed homebuilding policy to boost the number of new homes, politicians are simply seeking to free up properties by forcing buy-to-let owners to sell up (or avoid the sector in the first place) by taking the scythe to investment returns.

One way in which they’ve done this is by giving the taxman plenty more punch. From hiking stamp duty on second homes, to axing wear and tear allowance and phasing out tax relief for mortgage interest, the subsequent impact on investors’ wallets has been staggering.

But there’s a way to get around this: by choosing to own and operate your property portfolio through a limited company.

Good company?

And recent data shows that more and more of us are saving a fortune in lost tax by doing just that.

According to Hamptons International, some 12% of rental homes in Britain are let out by a company landlord, the highest level for eight years. This is also up from 9% in 2015, just before those tax changes on mortgage interest for non-company landlords were introduced a year later.

Percentage of UK homes let by company landlords

Source: Hamptons International

But is this trick really a lifeboat to rescue returns for buy-to-let investors? Not in my book. Landlords still have to pay considerably more to the taxman than they did just a few years ago, even if they choose to do their business via a company. And with a flurry of other extra costs coming in, like those associated with the Tenant Fees Act, as well as the rising amounts of new regulation associated with rental property ownership, I for one am happy to avoid this particular investment arena.

Boxing clever

Those seeking to grab a slice of the British property sector would be much better off getting exposure via the stock market, in my opinion. And one great way of doing so would be by buying Tritax Big Box (LSE: BBOX), even if it is a bit of a departure from traditional buy-to-let investing.

This FTSE 250 firm provides so-called big-box spaces from which blue-chip retailers and fast-moving consumer goods companies warehouse and distribute their products. Demand for such space is red hot right now as businesses switch increasingly to automation to drive down costs and sell increasing volumes of their wares through online shopping.

And when it comes to the latter point, Tritax Big Box certainly appears to have a lot to look forward to, certainly if a new report from Retail Economics is anything to go by. The researcher estimates that more than half of all retail sales — 53%, to be exact — will be generated online within the next decade. This compares to around a fifth at the present time.

The stage looks set, then, for trading to thrive at Tritax. It’s already delivered a total shareholder return of 82% over the past five years, and there’s clearly plenty of reason for it to continue delivering knockout gains long into the future.

The post Calling buy-to-let investors! This one decision could save you a fortune in tax appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

With regulatory changes, refreshed tax rates and increasing difficulty in obtaining a mortgage, buy-to-let may be losing appeal at a time when a number of mid-cap stocks offer improving growth prospects and appealing valuations.

With that in mind, here are two FTSE 250 real estate investment trusts (REITs) that could be a better means of making a million compared to investing in buy-to-let properties.

Workspace

Office, studio and warehouse rental specialist Workspace (LSE: WKP) released an encouraging business update on Thursday which covered the first quarter of its financial year. It has seen a good level of customer demand during the period, with enquiries averaging 1,060 per month. This is up on the 1,021 from the same quarter of the previous year, while lettings are up sharply from 88 last year to 121 in the first quarter of the current year.

Looking ahead, the company’s flexible offer could continue to be popular at a time when the economic prospects for the UK remain uncertain. Its pipeline of new projects appears to be healthy, while it remains well-placed to capitalise on acquisition opportunities as they become available.

With Workspace forecast to post a rise in earnings of 13% in the current year, it seems to have a sound growth strategy. The company’s price-to-book (P/B) ratio of 0.8 suggests that investors may have factored in the risks facing the business from wider economic weakness. As such, now could be an opportunity to buy the stock while it offers a wide margin of safety.

Tritax Big Box

Another FTSE 250 REIT, Tritax Big Box (LSE: BBOX), also seems to offer an appealing long-term investment outlook. The company focuses on large logistics facilities in the UK which are becoming increasingly popular among a wide range of businesses. This trend looks set to continue over the long term, with online shopping expected to make up an increasing proportion of total retail spend over the coming years.

Since the stock trades on a P/B ratio of 1.2, it seems to offer good value for money at the present time. Although there may be cheaper REITs on offer elsewhere in the FTSE 350 at the present time, the growth opportunities that the company has could help it to outperform the wider sector.

With Tritax Big Box having a dividend yield of 4.4%, it could generate impressive total returns over the long run. As with many REITs, it offers a higher level of diversity than may be possible from investing in buy-to-let properties. This may mean it has lower risks than having a buy-to-let portfolio. Due to its growth prospects, it may also deliver higher returns that increase an investor’s chances of making a million over the long run.

The post Forget buy-to-let: I think these 2 FTSE 250 shares can help you obtain a £1m ISA appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

They may not provide the size and scale of large-cap stocks, but they could deliver stronger profit growth that translates into a faster pace of dividend growth. With that in mind, here are two mid-cap stocks that appear to offer a potent mix of income returns as well as the potential for capital growth over the long run.

Wood Group

Energy services business Wood Group (LSE: WG) released an encouraging trading update on Wednesday, with its first half performance ahead of the previous year. Revenue has been in line with the comparable period, but margin improvement has led to rising profitability. Stronger margins have been recorded due to cost synergies, as well as stronger performance in energy-related activity in Asset Solutions.

With a dividend yield of over 6%, Wood Group appears to offer an impressive income return at present. However, its income prospects could improve as a result of a rising bottom line with its net profit forecast to rise 22% in the current year. Since dividends are covered twice by profit, there could be scope to raise them at a fast pace over the long run.

While the wider sector in which it operates could experience an uncertain period, Wood Group’s price-to-earnings growth (PEG) ratio of 0.7 suggests that it offers a wide margin of safety. As such, now could be a good time to buy it for the long term from an income and growth investing perspective.

Tritax Big Box

While the UK commercial property sector may be experiencing an uncertain period at present, logistics property specialist Tritax Big Box (LSE: BBOX) appears to be enjoying a tailwind. Demand for large distribution facilities is growing rapidly, and this is expected to remain the case over the medium term as e-commerce becomes an increasingly important part of the retail economy.

As such, the company’s financial prospects are bright. In the current year, it’s forecast to post a rise in earnings of 7%, which could help to improve investor sentiment.

With Tritax Big Box currently offering a dividend yield of 4.5%, it has an income return that equals the FTSE 100, and is 120 basis points higher than the FTSE 250.

Although the prospects for the UK economy may continue to be uncertain, the gradual shift of shoppers from bricks-&-mortar stores to online is forecast to continue. This could mean rising demand for large-scale distribution facilities continues over the medium term and leads to rising profitability, as well as a growing dividend, for the company.

Therefore, now could be a good time to buy it – even though the wider commercial property sector is experiencing a challenging period.

The post Building a second income? 2 FTSE 250 dividend stocks I’d buy to get rich and retire early appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT. 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.