£500 Buys 529 Shares In This 7.3% Passive Income Stock

Passive income doesn’t always require a huge starting pot, especially since the UK stock market’s home to some of the most generous, dependable dividend payers anywhere in the world.

Primary Health Properties (LSE:PHP) is a classic example. The healthcare landlord currently pays a chunky 7.3% yield. That means at today’s share price of 94.5p, £500 buys 529 shares, unlocking a £36.60 passive income stream from day-one.

That’s hardly life-changing on its own, but with 30 years of continuous dividend hikes behind it, that income could grow substantially over time. So is this a no-brainer buy?

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What does this business actually do?

Primary Health Properties owns and manages healthcare real estate across the UK and Ireland. Its portfolio mostly consists of GP surgeries and primary care centres, with around 76% of its rent roll funded directly or indirectly by the NHS or its Irish equivalent.

That government-backed income stream has helped the real estate investment trust (REIT) maintain 99% occupancy and an unbroken run of 30 consecutive years of dividend growth â the longest such streak of any UK REIT. And following the group’s latest results, this dividend-hiking streak has continued.

As CEO Mark Davies summed up:

“We continue to deliver on our strong track record of dividend growth, now in the 30th consecutive year, highlighting the benefit of PHP’s long-standing disciplined approach to managing our portfolio, balance sheet and cost base.”

Why the dividend keeps climbing

The big story this year is the integration of Assura, which the firm acquired in a massive merger during 2025 that roughly doubled the scale of its portfolio overnight.

Net rental income more than doubled to £176m, while adjusted earnings per share climbed 9% to 3.8p. At the same time, management has delivered £9m or 92% of the merger’s targeted cost synergies already, and refinanced £1.2bn of debt at margins roughly 40 basis points cheaper than before.

Needless to say, this is all pretty positive news for income investors⦠but is there a catch lurking beneath these headline numbers?

Where the risks actually sit

The most obvious concern is leverage. Even after refinancing efforts, the Assura deal has pushed the group’s loan-to-value ratio to 57%, well above its 40%-50% target range.

Management insists this will ease through joint venture disposals in the second half of 2026. And to be fair, the company’s already agreed to a joint venture with USS, expected to deliver proceeds of £82m to help tackle the leverage challenge.

Still, execution risk’s real. And even if this strategy is pulled off without a hitch, interest rate sensitivity and NHS funding slowdown remain persistent risk factors for investors to consider.

A steady income story worth exploring further?

None of this makes Primary Health Properties bulletproof, but a government-backed tenant base, three decades of dividend growth, and a credible deleveraging plan is a rare combination for an income stock at this yield.

That’s why for investors looking to build a chunky passive income, Primary Health Properties could be worth a closer look. Yet there’s also an even better income opportunity that caught my eye this weekâ¦

What income stock do we like better than Primary Health Properties Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post £500 buys 529 shares in this 7.3% passive income stock appeared first on The Twelfth Magpie.

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