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Are these 2 of the best dividend stocks to consider buying in these uncertain times?


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Confidence among stock traders and investors is plummeting. With fears over the macroeconomic and geopolitical landscape growing, so are concerns over the capital gains and dividend income that global stocks might deliver in 2025 and potentially beyond.

I’m not saying that fresh trade tariffs, signs of resurgent inflation, and a weakening US economy are nothing to worry about. However, with some shrewd stock picks, UK share investors can limit the impact these hazards may have on their portfolios.

Here are two I think are worth considering today. I’m expecting them to deliver solid dividends regardless of these external factors.

The PRS REIT

We need to keep the rain off our heads regardless of the economic backdrop. This can make residential property stocks like The PRS REIT (LSE:PRSR) lifeboats for investors in tough times.

Rent collection at this FTSE 250 share has ranged between 98% and 100% in the last three years, even despite the twin problems of higher-than-normal inflation and a struggling domestic economy.

It’s worth noting that private rental growth in the UK is cooling sharply at the moment. Latest Zoopla data showed annual growth of 3% for new lets, down from 7.4% a year ago.

Further cooling is possible, although Britain’s rapidly growing population could put a floor under future declines. PRS REIT’s focus on the family homes sector, where accommodation shortages are especially sharp, might also support rental growth.

I’m certainly confident that the business will remain profitable enough to continue paying a large and growing dividend. Under real estate investment trust (REIT) rules, the company has to pay at least 90% of yearly rental earnings out to shareholders.

For this financial year (to June 2025), PRS REIT’s dividend yield is a market-beating 3.8%.

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BAE Systems

The stable nature of arms spending makes defence stocks classic safe havens during tough times. With Europe proposing hikes to regional defence budgets, now could be an especially good time to consider buying shares like BAE Systems (LSE:BA.)

I like this particular firm because of its considerable financial resources and strong balance sheet, which add extra strength to dividend forecasts. This has underpinned steady payout growth dating back to the early 2010s.

Free cash flow remains considerable, and in 2024 remained stable at around £2.5bn. In my opinion, this gives BAE enough wiggle room to continue paying a growing dividend while also servicing its rising debt pile (net debt increased to £4.9bn last year following the acquisition of Ball Aerospace).

I think its terrific record of dividend growth makes it a great passive income stock to consider, even though recent share price strength has reduced its forward dividend yield to a modest 2.3%. This is some way below its 10-year average of around 4%.

On the downside, BAE Systems may face the prospect of cooling US sales as President Trump seeks to boost government efficiency. But on balance, I think the FTSE 100 stock still merits a close look from savvy dividend investors.



This story originally appeared on Motley Fool

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