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Investors are spoilt for choice when it comes to UK-listed stocks offering passive income. The FTSE 100 is chock full of them!
For a bit of fun, I decided to ask ChatGPT to come up with a list of top-tier shares to buy and hold in 2026.
What it had to say was interesting. And worrying.
The usual suspects
Perhaps unsurprisingly, the AI bot’s selection of the best income stocks included many of those offering the highest dividend yields in the index.
- Legal & General
- M&G
- Phoenix Group Holdings
- British American Tobacco
All of the above have forecast yields above the FTSE 100 average (the lowest is 5.6%).
They have solid histories of growing the amount of cash they return to investors each year.
They’re established stock market heavyweights.
So far, so good, right?
Well, I’m concerned that the first three come from the notoriously cyclical Financials sector. This distinct lack of diversification means even if they do everything right going forward, there’s always a chance that an economic shock could put all that income at risk.
Elsewhere, sales of traditional cigarettes continue to fall and additional regulation of next-generation products like vapes looks very likely. So, even a go-to dividend stock like British American Tobacco isn’t immune.
But it was ChatGPT’s fifth suggestion that most surprised me…
Passive income dud?
I’ve avoided communications behemoth Vodafone (LSE: VOD) like the plague in recent years. With a huge debt burden and lack of growth, its dividends have barely been covered by profit.
All this helps to explain why there was a distinct lack of consistency with regard to how much cash was returned. Indeed, Vodafone’s dividend payments climbed one year only to fall the next, albeit not by much on either side. That is, until the payout was halved in FY25!
Sure, any income from any company is never guaranteed. But those looking for the stock market to help supplement their salary or pension will likely be looking for at least some stability.
That said, Vodafone shares are up an incredible 40% in value in 2025. Investors clearly like the restructuring story here. Improved financial results coupled with analyst upgrades have gone down well.
Whether this company can shake the tag of being a passive income dud, however, remains to be seen. Competition in telecoms markets remains fierce, the sector is always susceptible to changes in regulation and the debt pile remains high.
The yield is also the lowest of the five, at 4.4%.
Trust ChatGPT? No chance!
Considering just how much AI has already changed our lives, I can understand why someone may go searching for investment advice from a bot. It’s cheap, easy and instant.
But it’s also potentially very dangerous for that person’s financial health. Ultimately, ChatGPT will only have limited understanding the financial goals and risk tolerance of the person prompting it. In particular, it has no awareness of how an investor might react in the midst of greed or fear.
Now, I don’t think that all of the bot’s suggestions in this little exercise were complete rubbish. But I wouldn’t think of buying any of them for 2026 without doing my own due diligence.
I also reckon there are some excellent options for income in 2026 that it seems to have ignored!
