Imagine a dividend yield of 6.3%! Here are two stocks worth considering for generating passive income.
When searching for dividend-paying stocks, it's easy to be tempted by those that boast eye-popping yields of over 9%. However, just like those seemingly irresistible all-you-can-eat buffets, they often turn out to be illusions—potential traps rather than genuine opportunities.
In contrast, the two dividend stocks highlighted below appear promising and are certainly not offering paltry yields of just 1% or 2%. Instead, each is providing an enticing forecasted dividend yield of 6.3%.
Stock from the FTSE 100
The first stock to consider is Aviva (LSE:AV), a well-known name within the FTSE 100. With a customer base exceeding 25 million across the UK, Ireland, and Canada, this insurance giant is unlikely to need much introduction. Notably, over 7 million customers in the UK hold two or more policies with Aviva, showcasing its broad reach and customer loyalty.
Looking at its performance, Aviva’s share price has impressively doubled over the past five years, while still maintaining a compelling forecast dividend yield of 6.3%. Following its £3.7 billion acquisition of rival Direct Line, Aviva has solidified its position as the largest motor and home insurance provider in the UK. Management anticipates a compound annual growth rate of 11% in operating earnings per share from 2025 to 2028, which bodes well for future dividend payments. In fact, the market expects nearly a 7% increase in dividends for the fiscal year 2026. Additionally, share buybacks are set to resume this year, potentially providing further support for the stock price.
However, it’s important to acknowledge that competition in the insurance sector is fierce, and the challenges posed by a recession could impact all players in the market, including Aviva.
Nevertheless, with the stock priced at a reasonable 11 times its earnings, and with strong prospects for dividends, I believe Aviva deserves a closer look.
Stock from the FTSE 250
Next up is TBC Bank (LSE:TBCG), which is listed in the FTSE 250. This bank may be less familiar to many investors, as it operates in Georgia—a country located in the Caucasus region, nestled between Europe and Asia, and not to be confused with the US state of the same name.
This geographical positioning has played a significant role in TBC Bank's remarkable stock performance, with shares soaring nearly 250% over the past five years. As trade routes through Russia faced restrictions following the war, Georgia has emerged as a crucial trade hub linking China and Central Asia with Europe. Moreover, the influx of skilled migrants from Russia and a surge in tourism have further bolstered the bank's growth. TBC Bank also maintains a strong foothold in Uzbekistan, a rapidly growing economy that recorded a GDP growth rate of 7.7% in 2025.
As a result, TBC Bank reported a 17% increase in operating income during the third quarter, along with a 14% rise in monthly active customers, bringing the total to 7.46 million. The bank consistently achieves a return on equity in the mid-20s, which is notably above the industry average for European and emerging market banks.
However, one significant risk to consider is the heightened political tensions that led to a decline in tourism revenue in early 2025. If such tensions escalate again, it could negatively affect investment in Georgia and consequently reduce lending activities.
Despite this uncertainty, TBC Bank appears well-positioned for continued growth. The tourism sector is recovering, contributing to a 7.5% growth in the Georgian economy last year. Projections from the UN estimate growth rates of 5.4% for 2026 and up to 6% for Uzbekistan.
Currently, TBC Bank's stock is trading at an attractive valuation of just 5.5 times forward earnings, alongside a forecasted yield of 6.3%. The dividend payout is nearly three times covered by expected earnings, offering a substantial margin of safety for investors.
With TBC Bank’s stock down 13% since July, this could present a prime opportunity for savvy investors looking to enhance their passive income stream.
