5 UK shares I’d buy for a passive income

first_img See all posts by Rupert Hargreaves The Motley Fool UK’s Top Income Stock… Learn how you can grab this ‘Top Income Stock’ Report now Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended S & U and Schroders (Non-Voting). 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. I think buying UK shares can be a great way to generate a passive income. With that in mind, here are five I’d buy right now with attractive income credentials. Passive income opportunityWhile buying dividend shares can be an excellent way to generate a passive income, dividends are never guaranteed. As dividends are paid out of profits, it may have to reduce the payout if a company’s probability slumps. There are plenty of other reasons why a business may have to reduce its dividend as well.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…As such, investing in dividend shares may not be suitable for all investors who want to generate a passive income. However, I’m comfortable with the risks involved. That’s why I’d buy the companies outlined below for my portfolio of UK shares. UK shares to buyThree companies I’d acquire, with dividend yields ranging from 3% to 3.3%, are Schroders, S&U and 3i Infrastructure.All of these businesses have different strengths, weaknesses, opportunities and threats. That’s really why I like them. They’re all so different that if one company starts to struggle, the others should pick up the slack, although that’s not guaranteed. Schroders is one of the country’s largest and most respected asset managers. S&U provides asset finance, and 3i operates infrastructure investments around the world.As passive income investments, 3i is attractive as infrastructure assets tend to produce a steady income stream. S&U has a long track record of sensible underwriting of loans, which generates continued profit growth and a strong balance sheet. Meanwhile, Schroders trades on its reputation and investment performance. Of course, these UK shares all face unique risks as well. 3i’s income could plunge if governments decide to nationalise the company’s assets. A string of underperformance could hurt Schroders’ reputation and reduce investment flows. And S&U may suffer in a significant economic depression, which would cause a high level of loan losses. Despite these risks, I’d buy all of these UK shares for my portfolio of passive income investments right now. Income and growth Two other UK shares I’d buy for my passive income portfolio are Smurfit Kappa Group and Telecom Plus.Smurfit is one of the UK’s most significant paper and packaging producers. I think this business should benefit from the booming e-commerce market over the next few years.The stock currently supports a dividend yield of 4.5% and reported earnings growth of 13% last year. However, the main risk to the dividend is rising commodity prices, which could impact profit margins and reduce group income.Shares in utility provider Telecom Plus currently offer a dividend yield of 4.5%. Utilities tend to be reasonably defensive businesses because households will always need electricity, gas and phone connections.For example, the number of customers increased 0.8% for the financial year ending 31 March, despite the pandemic.Unfortunately, a reduction in the Ofgem price cap and higher regulatory costs overall hit profits. Pre-tax profit declined to £60.8m from £56m, due to these costs. This regulatory threat is the most considerable risk to group profits and further enforced price caps could hurt the company’s ability to pay a dividend. We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign.But with this opportunity it could get even better.Still only 55 years old, he sees the chance for a new “Uber-style” technology.And this is not a tiny tech startup full of empty promises.This extraordinary company is already one of the largest in its industry.Last year, revenues hit a whopping £1.132 billion.The board recently announced a 10% dividend hike.And it has been a superb Motley Fool income pick for 9 years running!But even so, we believe there could still be huge upside ahead.Clearly, this company’s founder and CEO agrees.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Rupert Hargreaves | Sunday, 16th May, 2021 Enter Your Email Address Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares 5 UK shares I’d buy for a passive incomelast_img read more