Nice UK shares to think about shopping for for passive earnings aren’t essentially these providing the best dividend yields. Personally, I want these firms that maintain elevating the amount of money they distribute to traders each (or almost each) 12 months.

Why? As a result of dividends don’t lie — I both get them or I don’t. In different phrases, they’re indication of how an organization is definitely buying and selling. Not that I’d ever accuse some administration groups of being unfastened with the reality.

Dividend heroes

Thankfully, there are fairly a couple of companies which have nice observe information on this entrance. From the FTSE 100, I’d select Halma, BAE Techniques and Bunzl. All three have managed to develop dividends for many years. A minimum of a few of this is because of working in sectors — well being and security, defence and distribution respectively — the place demand doesn’t waver all that a lot.

This isn’t to say rising payouts are nailed on. For example, huge oiler Shell was compelled to chop its money distributions again in 2020 when you-know-what pushed us indoors. This is the reason I wish to have dollop of diversification in my portfolio.

Out of curiosity, the share costs of the aforementioned trio have additionally achieved critically effectively over the long run. Think about how much more profitable it will have been if I’d held these shares and reinvested the payouts straight again into the businesses to compound!

One other constant hiker

However I don’t want to stay to solely the largest firms in relation to dividends. One which I’ve taken a shine to somewhat additional down the market is FTSE 250-listed impartial expertise and providers supplier Computacenter (LSE: CCC).

The yield right here is 2.9% — fairly common for a UK-listed inventory. However once more, I’d fairly have a smaller, rising dividend over one which’s huge however not transferring. And if we regard a single dropped last dividend in 2020 as a blip motivated by a really unsure outlook, that is precisely what’s been occurring.

Like these FTSE 100 beasts I discussed earlier, Computacenter hasn’t been a slouch in delivering capital positive factors both, not less than over the past 5 years. Since October 2019, the share price has virtually doubled.

Positive, this isn’t one other Nvidia. However I doubt these in search of firms which can be rising dividends would have been in search of the chip-maker. And once more, the efficiency will get even higher if these payouts have been reinvested.

Sticky patch

It’s not all rosy although. Computacenter’s shares have misplaced about 10% in 2024 up to now, prompted by income and adjusted pre-tax revenue falling 13.4 and 28.4%, respectively, in H1. This was partly as a result of “anticipated normalisation of Know-how Sourcing volumes towards exceptionally robust comparatives“. In plain English, gross sales haven’t been fairly nearly as good as the identical interval final 12 months.

On the flip facet, this leaves the inventory buying and selling on a P/E ratio 14. That’s somewhat low-cost for the tech sector. Administration additionally expects stronger momentum within the second half of FY24.

Will this occur? We will’t know for certain and “softer UK market conditions” would possibly stay. However analysts nonetheless anticipate the dividend to be simply lined by revenue.

Once I subsequent have the cash so as to add to my portfolio, I would effectively cease by right here.