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9.8% dividend yields! 2 passive income shares to consider in an ISA

Kicking around some stock ideas for the new ISA season? Here are two passive income shares Royston Wild thinks investors should consider.

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The new tax year kicks off next week, and with it a new Stocks and Shares ISA allowance that investors can exploit. Are you building a list of top stocks to buy? Let me reveal two top passive income shares I’m considering buying for my own portfolio in the coming weeks.

NewRiver REIT (LSE:NRR) and iShares World Equity High Income ETF (LSE:WINC) both have excellent records of paying reliable and growing dividends. What’s more, recent stock market volatility has supercharged their forward dividend yields close to 10%.

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Here’s why they could be two of the best dividend stocks for ISA investors to consider this April.

Flowing dividends

Like many other property stocks, NewRiver REIT’s shares have dropped as oil prices have soared. If interest rates climb to curb inflation, the company’s borrowing costs will rise and asset values will take a hit, impacting earnings.

I think this drop represents an attractive dip buying opportunity. At 70p, the real estate investment trust (REIT) trades at a whopping discount per share of 105p relative to its net asset value (NAV). It also carries a bulky 9.8% dividend yield for this financial year (to March 2027).

NewRiver has its tenants locked down on long contracts, with a weighted average lease expiry of 8.6 years as of September. This means it can expect stable rental income even if the UK economy struggles, giving it better dividend prospects than many other UK shares.

There’s another advantage to buying NewRiver REIT shares for dividends. In exchange for corporation tax breaks, at least 90% of annual profits must be paid out in dividends. This provides shareholders with an added layer of visibility by limiting management decisions on capital distribution.

Around a quarter of the company’s portfolio comprises retail parks, a fast-growing sector. However, I’m not as taken by the less stable shopping centre assets that make up the remainder. Yet, given that enormous yield and massive discount to NAV, I think NewRiver is worth a close look.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Strength through diversification

Like most shares-based funds, the iShares World Equity High Income ETF has slumped in value in recent weeks. If the Middle East war drags on, it could well continue sinking

Still, I expect this exchange-traded fund (ETF) to recover strongly over time. After all, the long-term direction of global stock markets has always been up. And in the meantime, investors can expect the fund to keep delivering juicy dividends. For 2026, the dividend yield here is also 9.8%.

So what’s its secret? As this name implies, this ETF invests holds shares in high-yield global shares, roughly 470 in total. This spreads out the impact of possible dividend volatility among a handful of stocks, allowing it to still deliver market-beating payouts to shareholders.

But here’s the cool part: with substantial cash holdings and government bonds too, it can deliver a more stable second income than just stocks-based ETFs. Given this extra trick up its sleeve, I think it’s a top passive income share to consider for the new ISA period.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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