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Constructing a passive earnings portfolio within the UK doesn’t simply require a bucketload of endurance and dedication (though they assist). Equally as necessary is a portfolio fabricated from the correct FTSE 100 shares.
However what are the ‘proper’ shares?
Effectively, in all honesty, there’s no definitive listing of right shares for such an endeavour. And the truth that the purpose posts are continually altering doesn’t assist. Fluctuating rates of interest, political instability and international tariffs all play an element in the place share costs go each day.
That’s why the best shares are people who hold a gentle head even when instances get robust. In case your funding outlook is 10 to twenty years (and it needs to be), then you definately want shares that may survive the journey.
With that in thoughts, I’ve recognized two dividend shares on the FTSE 100 which have a super-reliable historical past. Whether or not getting ready for retirement or saving up for a home, I believe each are effectively price contemplating.
Unilever
Regardless of a sometimes average yield, Unilever (LSE: ULVR) is widespread for passive earnings due to its distinctive dividend observe file. Spanning practically a century, it’s paid dividends constantly since 1929, with nearly 20 years of uninterrupted development earlier than Covid.
That alone is spectacular — however the actual attraction is its resilience to market downturns. Even throughout essentially the most extreme financial downturns (the Nice Melancholy, World Battle II, the 2008 Monetary Disaster, and Covid), Unilever maintained its dividend funds.
The explanation for that is the corporate’s recession-resistant enterprise mannequin. Promoting important items like meals, private care, and family merchandise means its revenues movement no matter financial situations.
It’s price noting, there’s a danger of surprising forex fluctuations affecting dividend funds, as Unilever studies in each sterling and euros. Moreover, its international diversification means returns are in danger from political instability, forex crises and financial volatility.
Nonetheless, historical past has proven it’s some of the secure of FTSE 100 dividend shares.
Severn Trent
When pondering of utility inventory for earnings, many individuals flip to Nationwide Grid. However whereas the nation’s core power grid operator is a good possibility, Severn Trent (LSE: SVT) really has a greater dividend observe file.
What’s extra, it’s additionally carried out barely higher over the previous 20 years.
Much like Nationwide Grid, Severn Trent is a regulated utility firm serving roughly 4.7m households and companies throughout the Midlands and Wales. As a regulated monopoly, the corporate advantages from predictable, inflation-linked income streams with minimal competitors.
Whereas nowhere close to Unilever’s file, in its 20-year-long historical past, it’s executed surprisingly effectively. Regardless of two minor dividend reductions previously 20 years, total, dividends have grown at a median fee of three.53% per 12 months. For instance, the corporate elevated dividends from 81p in 2016 to £1.19 in 2024 — roughly 47% development over eight years.
One other bonus of regulation provides provisions for inflation indexation, making certain dividend funds hold tempo with rising prices. And the important want for water means income stays secure no matter financial situations.
However there’s one elephant within the room that may’t be ignored: £8.65bn in debt. At that degree, even a regulated enterprise is prone to defaulting — or at the very least chopping dividends.
Nonetheless, with a long-term view, I anticipate debt will come underneath management and the corporate will proceed delivering secure earnings to shareholders.
