FTSE shares can’t seem to slow down in 2024. Year to date, the FTSE 100 is up 9% while the FTSE 250 has climbed 5.4%.
While that’s impressive, it hasn’t been the case for the last few years. In fact, in recent times, investors have neglected UK shares.
Concerns about the domestic economy and its future prospects have driven people away from shopping in Britain. As such, many shares still look severely undervalued despite a strong 2024.
But as they say, every cloud has a silver lining. And in my eyes, there’s one positive I see: cheaper share prices translate to higher dividend yields.
These are my two favourite FTSE stocks for making passive income. I think investors should strongly consider buying them today.
Legal & General
I’ve been a shareholder in Legal & General (LSE:LGEN) for a while now. I plan to be for a very long time.
The stock seems to have missed out on the Footsie rally. Year to date, it’s down 1.8%. But I’m not complaining. That now means it yields a bulky 8.3%.
In the last decade, its payout has increased massively. Last year, it paid 20.34p per share. This year it’s predicted that will rise to 21.4p. At its current price, that puts its forward yield at 8.7%.
Legal & General meets a lot of the criteria I look for when buying a stock. Firstly, it looks cheap. It trades on 9.8 times forward earnings. That’s below the Footsie average of 11.
What’s more, it’s a business with strong brand recognition, a large customer base, and in the years to come I’d expect demand to continue to rise for its products and services.
Its share price has struggled, and this may continue in the months ahead. Ongoing economic uncertainty will no doubt negatively impact the business. For example, it can lead to customers pulling money out of funds, as has been the case previously.
But I’m happy to continue collecting my passive income as I wait for the stock to creep up in the years to come.
ITV
Switching the focus to the FTSE 250, I also love ITV (LSE:ITV). Unlike Legal & General, the stock has posted an awesome performance so far this year, rising 23%. But down 32.1% in the last five years, I reckon its share price still has plenty of room to grow.
That’s reinforced when I see the stock trading on just nine times earnings in 2025 and 7.5 times in 2026. And at 6.5%, while it doesn’t quite yield as much as Legal & General, a payout of that size is nothing to scoff at.
Last year it paid out 5p per share. Management has stated that in the medium term, it intends to keep growing the dividend and returning value to shareholders.
The largest threat to the business is a weakened traditional advertising market. Due to inflation, companies have cut back on TV spending.
However, ITV is diversifying to counteract this by putting more focus on its digital revenues, which it plans to grow to £750m, from £490m last year, by 2026.
As with Legal & General, I think its share price will keep rising in the years ahead. I’ll continue to collect passive income in the meantime.
The post FTSE shares just keep on rising! Here are 2 of my favourite for passive income appeared first on The Motley Fool UK.
Like buying £1 for 31p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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Charlie Keough has positions in ITV and Legal & General Group Plc. The Motley Fool UK has recommended ITV. 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.
