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Passive income: should I buy Rolls-Royce shares in 2021?

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares Kirsteen Mackay | Wednesday, 30th December, 2020 | More on: RR I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Passive income: should I buy Rolls-Royce shares in 2021?center_img Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Enter Your Email Address Many of us dream of generating a passive income. It’s become an increasingly popular target in the past decade or so due to the growth of internet investing. But it’s been possible for longer than that. Billionaire investor Warren Buffett recognised the miracle of generating a passive income when he was still a boy. Thanks to his father, an investment broker, he grasped the beauty of stock market investing. Rolls-Royce (LSE:RR) is one FTSE 100 stock that has been in the spotlight this year, and this trend is likely to continue. But is it a good stock to buy for passive income generation? What is a passive income?A passive income involves making money with little to no effort. Dividends make this a possibility via stock market investing because dividends are like interest that’s paid back to the shareholder.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…It’s debatable how effortless stock market investing actually is. It can be a completely hands-off pursuit if employing an investment manager to take care of it. But that can be expensive. Index funds are another fairly effortless way for an individual to invest as they’re managed by a team of professional investors. This is becoming a popular investment option for busy people.In any form of passive income generation, whether from author royalties, second property income, affiliate earning or other investments, it requires effort at the outset. Considering this, I think generating a passive income from stock market investing is the most appealing. It’s also very simple and can be extremely lucrative.I need to research which stocks to buy. But once they’re bought, I can forget about them for years and let the passive income roll in. So what about Rolls-Royce? Unfortunately its dividend was cancelled this year and I imagine it will be a while before it’s reinstated. I think that makes it a less of an option for passive income generation and more of a potential buy-and-hold share for capital gains. But what are the prospects for its dividend?Rolls-Royce shares: a good passive income buy? Rolls-Royce has had a rough ride in 2020 so can it recover enough to see its share price surge in 2021? I’m not sure the tough times are over yet. And until we bring the pandemic under control, share price volatility is likely to continue.The Rolls-Royce share price is down over 50% year-to-date, but may have further to fall. Flight bans and less international travel are the big issue. With the vaccine rollout signalling a return to freedom, the share price rebounded. Unfortunately, the appearance of new Covid-19 strains has thrown a spanner in the works.More lockdowns will set companies back again. While the vaccine rollout should make a difference in time, we don’t know how long it will be until it takes effect. This setback could leave Rolls-Royce waiting a lot longer to return to its former glory.The company wasn’t in great shape even before the pandemic struck and hasn’t been in profit for three of the past five years. However, it has successfully fundraised this year and I can’t see it going under unless things get much worse. I also think management will be keen to reinstate the dividend at the earliest opportunity. I imagine that won’t be before 2022, but I’d consider buying Rolls-Royce shares in 2021 to hold for 10 years+. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. See all posts by Kirsteen Mackaylast_img


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