Forget buy-to-let, investors should buy these dividend stocks!

Dividend stocks are the main part of my portfolio. For every growth stock, I have about five or six companies that pay dividends.

I am always looking for dividend stocks that can add passive income to my portfolio.

Savings through the house

One thing I’ve learned in recent years is that I prefer to invest in stocks rather than houses.

I have bought a property to buy-to-let several years ago, and while it was profitable, the yield was not great – 5% minus fees. Then I have to consider possible complications such as costly voids.

Clearly, however, there are benefits. The price of the unit has gone up over the years that I have owned it. And, in the end, I sold it for a modest profit.

However, I stress that stocks offer flexibility and opportunities to earn higher averages. At FTSE 100 has achieved a total annual return of around 8% over the past twenty years. But if I invest wisely, I can expect to beat the index average.

Of course, investing in stocks has risks. The value of my investment can go down as well as up – but so can house prices.

Stock options

When investing in dividend stocks, I want to generate passive income from a diversified investment portfolio.

In theory, I could invest all my money in one sector with a high yield, such as mining or banking stocks. However, this will leave me vulnerable to sector-specific challenges and events.

However, I have to spread my investments across different sectors.

So, here are the energy stocks I recently bought. Renewable Energy Infrastructure Group is a UK-based trust investing in several green energy facilities.

It owns and operates a diversified portfolio of assets in several regions, thereby protecting the stock from excessive concentration in different types of technology, weather systems, energy markets, and regulatory frameworks.

Naturally, there are concerns about the impact of government intervention in the energy market today. Renewables are a very profitable area, but the Electricity Generator Levy in the UK will have an irreversible impact on whether companies can make a profit in the near term. currently 5.5% dividend payment.

Another dividend stock, and one that I am looking to buy more, is HSBC. The Asia-focused bank offers a dividend yield of 4.3% and analysts are generally positive about the group’s outlook.

The net interest margin has increased, and with the tailwind set to continue, we may see even more net interest income over the coming years. The bank will also benefit from China’s reopening and very positive indicators, including the February PMI data (52.6).

I have small concerns about it Ping An‘s attempt to split the more profitable Asian business from its European and US units. But with the bank’s good performance over the last few quarters, it’s unlikely.

My last choice, which was recently purchased, is high-yielding Vodafone. The telecommunications company recently fell after industry peers saw its share price, and acquired shares, generating more interest in the knockdown share price.

The debt is quite large, and the coverage is not optimal, but the current dividend yield of 7.5% is very good. Even if the yield is cut to a more manageable 5%, it will likely outperform the index average.