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I'm looking for the best dividend stocks to buy for a four-figure passive income in 2025. But I'm not just talking about short-term returns. I'm looking for companies that can pay large and growing dividend income over time.
Here are two of the FTSE 100 and FTSE 250 on my radar today:
| FTSE 100/FTSE 250 shares | Dividend per share 2025 (f) | Dividend yield |
|---|---|---|
| Rio Tinto (LSE:RIO) | 310.4p | 6.5% |
| Supermarket Income REIT (LSE:SUPR) | 6.13p | 8.2% |
If the forecasts are correct, a global investment of £20,000 distributed equally between these shares will provide £1,480 in dividends in 2025 alone.
Here's why I would buy them for my portfolio if I had cash to invest today.
Rio Tinto
Rio Tinto is a stock I already have in my Stocks and Shares ISA. And following recent share price weakness, I'm considering increasing my holding.
In addition to boasting that massive 6.5% dividend yield, the megaminer now also trades on a low price-to-earnings (P/E) ratio of 8.9 times.
Profits are at risk as China's economy, which devours much of the planet's raw materials, experiences a prolonged crisis. But I think Rio Tinto's low share price currently reflects this threat.
I certainly think profits here will increase strongly over the long term as demand for raw materials increases. This will be driven by themes such as the growth of artificial intelligence (AI), the rise of renewable energy and continued spending on urbanization and infrastructure around the world.
And now it could be a great dip buying opportunity. As the graph below shows, demand for Rio copper alone could rise sharply until at least 2030.
In the meantime, I think Rio's strong balance sheet should help it continue paying big dividends even if earnings are disappointing. Its net debt to EBITDA ratio was only 0.4 times as of June.
Supermarket Income REIT
Rio's dividend yield for next year sails above the FTSE 100's 3.5% forward average. Supermarket Income REITs are even more impressive for the financial year ending next June, north of 8% .
Real estate stocks like these can be great ways to earn a second income. Under REIT rules, these companies must pay out a minimum of 90% of annual rental profits in the form of dividends. This is in exchange for certain tax advantages.
However, real estate stocks like this aren't always exceptional buys for passive income. As interest rates rise, earnings come under pressure as net asset values fall and borrowing costs rise. This, in turn, can put pressure on dividends.
Please note that tax treatment depends on each client's individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any type of tax advice.
Still, with a series of rate cuts expected over the next 12 months, now might be a good time to consider Supermarket Income REIT. I especially like it for its focus on an ultra-stable part of the real estate market which, in turn, provides it with stability at all points in the economic cycle.
It also has heavyweight tenants (including tesco and Sainsbury's) locked into long-term contracts, providing additional visibility into earnings. The company's current weighted average lease term (WAULT) is around 12 years.