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How I’m investing £300 a month in top dividend stocks for income

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While I enjoy searching for shares that could grow over the long term, I equally like finding top dividend stocks from which to create income streams.

With £300 to invest per month, here’s my plan to derive income from my investments!

A juicy dividend yield

The shares in Jupiter Asset Management (LSE: JUP) are down 53.5% in the last year and have fallen 13.7% in the last month. At the time of writing, they’re trading at 127.8p.

The firm has one of the highest dividend yields on the FTSE 250 index, registering 13.53% at current levels. In 2021, it paid a total dividend of 17.1p per share. 

To put this in context, if I bought £1,000 worth of shares, I would receive annual income just shy of £150. That’s just merely from holding the stock.

It should be noted, however, that dividend policies can be subject to change in the future.

Furthermore, pre-tax profit has been consistent in recent years and has actually grown over the course of the pandemic.

Year Pre-tax profit
2019 £151m
2020 £132.6m
2021 £183.7m

However, the business still reported net outflows of £3.8bn in 2021. Although this was down from £4bn in 2020, it still means that clients are withdrawing money.

With heightened economic uncertainty and a possible recession looming, the asset manager still doesn’t fully know how these factors may impact the business in the near future.

On the other hand, assets under management increased by 3% in 2021, compared with the previous year. 

Increasing its market share

Second, the TP ICAP (LSE:TCAP) share price has fallen by 38% in the past year and currently trades at 118.8p.

At the moment, the firm has a dividend yield of 7.9% and paid a total dividend of 9.5p per share in 2021.

The company – a commodities broker – performed well during the pandemic. This was primarily because of increased volatility within global markets.

It reported a pre-tax profit of £145m in 2020, up from £108m in 2019. By 2021, however, this figure fell to £31m in 2021. While revenue was consistent during this time, I will be watching closely to see how inflation and rising commodity prices impact the firm.

For the three months to 31 March, revenue grew by 14% and the company acquired Liquidnet, an equity and fixed income broker with a global reach, thereby increasing its market share. Furthermore, its interest rate desk is now ranked second in terms of market share, up from fourth.

Overall, both of these companies have attractive dividend yields and this gives me the real possibility of building a passive income stream. While there are risks associated with both firms, I think my monthly investment of £300 could be split between the shares in each business to derive long-term income. I will be adding both companies to my portfolio soon.