Buying these shares could help build a second income

There are many ways to build a second income. However, one of the easiest is to invest in dividend stocks. It pays out cash (from the company’s profits) to investors on a regular basis.

Interested in building a portfolio of dividend stocks that can generate a healthy level of income for the foreseeable future? I think investing in these three companies could be a good place to start.

Rising dividends

Unilever (LSE: ULVR) is the first stock I’m interested in. It is the owner of dove, Domestos, Knorrand many other well-known consumer brands (that consumers buy repeatedly).

If I wanted to build an income portfolio today, this would be one of the first stocks I’d pick. The yield here is not very high (currently around 3.7%). However, the company is a very reliable dividend payer that has been steadily increasing over the years.

Going forward, I expect Unilever to continue to increase payouts. This is quite a profitable company. And can reinvest profits to generate future growth.

The risk here is that the Unilever brand loses its appeal. I don’t see this happening personally, as their large and diverse product portfolio has been popular with consumers for decades. However, we cannot rule out that scenario.

Cash cow

Next is Legal & General (LSE: LGEN), a financial services company offering insurance, investment management and retirement solutions.

Now this stock has a high yield. This year, Legal & General paid a dividend of 20.4p per share. That creates a yield of about 8.6% at the current share price.

What I like is this high-yielding However, it also has a solid dividend track record. The company has increased its payout every year since 2010. And plans to keep doing so in the coming years.

Please note that Legal & General’s share price may be volatile. It could fall from here if stock market volatility returns, or the company’s future results disappoint.

But I think the stock looks attractive at current levels.

Reliable income

Finally, I thought Tesco (LSE: TSCO) can also be a good investment for those looking to make a second income. It is the UK’s largest supermarket operator.

Why Tesco? Yes, it’s a pretty stable company. People always have to buy food and drink, even in economic centers. So, in theory, it should be a reliable dividend payer.

The yield here is also quite attractive. Now, it’s more than 4%. And the payment has increased in recent years.

Of course, Tesco faces some risks. Competition from discount supermarkets such as Aldi and Lidl is one of them. These companies can continue to steal market share, putting pressure on the company’s margins and profits.

Overall, however, I think the stock is a solid option for those looking for income from shares.