The tough economic landscape means achieving decent returns through share price appreciation might be difficult in 2023. For this reason I’m searching for top income stocks to buy for my Stocks and Shares ISA.
I think these dividend shares could be great buys for long term passive income too.
Centamin
The uncertain macroeconomic and geopolitical outlook means next year could be a good one for safe-haven investments. One way investors might profit from this is to buy shares in FTSE 250 gold miner Centamin (LSE:CEY).
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Gold is one of the world’s oldest ‘flight to safety’ assets. And with inflation tipped to remain high next year the yellow metal could rise sharply in price. Investor demand for physical currencies like precious metals benefit when the value of paper money erodes.
Gold prices could also receive a boost in 2023 if the US dollar weakens. A lower buck makes it more cost-effective to buy gold. A likely pause in Federal Reserve rate hikes could cause the American currency to lose value against others.
So why buy Centamin to play the gold market? After all, mining shares expose investors to the unpredictable and often expensive world of commodities production.
However, this UK share provides something that physical metal or gold-backed ETFs do not: a dividend. And for 2023 the yield on its expected dividend sits at a healthy 4%.
I also like Centamin because of the rate at which gold production here is soaring. Metal output from its Sukari mine soared 23% in the third quarter, to 127,512 ounces.
The company is well on its way to hitting its goal of 500,000 ounces a year. And Sukari will be highly profitable for years to come if recent studies prove accurate. Testing showed that underground expansion here could lead to annual production of 1.5m tonnes. This is at the upper end of the firm’s guidance.
Bunzl
I already own shares in FTSE 100 business Bunzl (LSE:BNZL). And I’m tempted to increase my holdings following the release of strong trading numbers this week.
For 2022 Bunzl said that it expects “very strong” sales growth of 27%. It has forecast further annual revenues growth in 2023, too. It said this will be driven “by both organic growth and previously announced acquisitions.”
The business sells a wide range of everyday goods that the world needs at all points of the economic cycle. Food packaging, medical gloves and safety hats are just a few of the many products it supplies. This allows turnover to grow consistently.
And the resilience of Bunzl’s operations has long made it a great pick for passive income. Its predictable earnings have enabled it to raise the annual dividend for 29 years in a row.
City analysts are predicting further growth in shareholder payouts next year. This provides a handy 2.3% dividend yield. I think Bunzl is a top investment for me, despite the threat of persistent cost inflation.
