The ability to make decent money with very little effort is what makes stocks such an attractive investment class to me. UK share markets are packed with top companies that have a great record of delivering excellent passive income streams. The post-Covid economic recovery means that the opportunity to find attractive dividend-paying shares is improving too.
Here’s a top FTSE 250 dividend stock I think could help me make a terrific passive income over the next decade at least.
Shipping giants shun Russia
Russia’s decision to invade Ukraine is already creating problems for the global economy. Moves to isolate Russia are gaining momentum and today two of the biggest shipping firms have announced drastic action of their own. Both MSC and Maersk — the world’s two biggest container shipping lines — announced plans to cease deliveries to and from Russian ports in response to recent sanctions.
More shipping firms could follow suit as the tragedy in Ukraine unfolds. And it threatens to take a bite out of profits at Clarkson (LSE: CKN), a giant in the shipbroking space and a provider of maritime financial services.
Still a top buy
It’s my belief, though, that Clarkson’s profits could still rise strongly in 2022 and beyond, enabling it to keep growing dividends at a terrific pace.
As I say, the restrictions being slapped on Russia threaten to have far-reaching effects, so the risks of owning Clarkson have undoubtedly risen. But the shortage of shipping vessels is so vast that I think the brokerage could still deliver decent earnings growth. Indeed, Clarkson has made a habit of lifting profits guidance in recent months as shipping rates have improved.
There’s a good chance that this supply and demand imbalance will take years to solve, too, given the post-pandemic economic recovery and a dearth of new ship orders in recent years. As a long-term investor, then, Clarkson has plenty of appeal for me right now. And especially as someone who’s currently looking for the best passive income shares to buy.
A top stock for a passive income
You see, Clarkson’s strong record of cash generation has allowed it to raise annual dividends every year for almost two decades now. It’s a record that City analysts expect to continue rolling as well. For 2022, Clarkson is expected to pay a total 89p per share reward. This is up sharply from the 84p payment analysts forecasted for last year. A 95p dividend is being predicted for 2023 as well.
Pleasingly, the shipbroker’s projections also create yields that far exceed the 2.3% FTSE 250 average. These clock in at 2.7% and 2.9% for 2022 and 2023, respectively.
Today, Clarkson trades on a forward price-to-earnings (P/E) ratio of 20.8 times. This doesn’t exactly make the stock cheap. And this means that the broker’s share price could reverse sharply if fears over the global economy grow. Still, as a long-term investor I’d be happy to take this risk. And especially when I consider Clarkson’s history as a top passive income stock.
