I’m looking for the best stocks to turbocharge my passive income in 2025. During my quest, I’ve zeroed in on the following hot dividend shares from the FTSE 100 and FTSE 250.
Dividends are never, ever guaranteed. But if broker forecasts are accurate, a £15,000 lump sum invested equally across these three dividend stocks would provide a £1,320 second income next year alone.
I’m confident they could deliver large and growing dividends over time, longer term, too. Here’s why I’m considering them for my portfolio.
Ray of sunshine
The outlook for renewable energy stocks like Foresight Solar Fund has been complicated by Donald Trump’s upcoming return to the White House.
His plans to turbocharge the fossil fuel sector could negatively impact investor demand for green energy shares from next year. Possible trade tariffs might also introduce supply chain challenges for key hardware like solar panels.
That said, I think that some share price retracements across the sector now factor in this danger.
Take Foresight Solar Fund, for instance. Its share price has dropped 10% over the last month. As a consequence, the firm now trades on a rock-bottom price-to-earnings (P/E) ratio of 9.5 times for next year.
With this valuation, I think the company — which has operations in the UK, Italy, and Australia — is worth serious attention. The worsening climate crisis means renewable energy capacity still has considerable scope for growth regardless of US actions.
Some also argue that weaker green energy investment stateside will help British and European companies by making it cheaper and easier to source components.
I also think that, on balance, Foresight Solar remains low-risk despite recent political developments. After all, electricity demand remains broadly unaffected by broader economic conditions.
So far, this has provided the fund with stable profits and cash flows, and thus the ability to deliver a strong dividend year after year.
Growth opportunities
Financial services providers face a more uncertain outlook in 2025 as the global economy splutters. Aviva may be more challenged than others, too, given its focus on the stagnating UK.
However, I’m still tempted to increase my holdings today. Firstly, I invest based on a company’s long-term earnings potential. And I think Aviva’s is considerable, and especially in areas like pensions and annuities as the population rapidly ages.
I believe the industry giant has the scale and brand power to make the most of this opportunity. It’s grown its customer base to 19.6m, up 1.2m in just four years.
I also think tricky current conditions for consumers are baked into its low rating. Today, Aviva shares trade on a P/E ratio of 9.3 times for 2025.
Finally, I think the business looks in good shape to deliver more big dividends in 2025 even if earnings disappoint. This is thanks to its considerable cash reserves. The Solvency II ratio here was 195% as of September, almost twice the required level.
A robust balance sheet also gives Aviva plenty of scope to invest for growth. I think it’s one of the FTSE 100’s best bargains today.
