Investors should always be extremely careful when choosing which growth or dividend stocks to buy. This becomes even more critical when working with a limited budget and the opportunity to diversify (and therefore spread the risk) is less.

There are always dangers associated with investing in stocks. Markets can go up or down. And surprises can arise that can blow up a company’s previously positive investment record.

But with some detailed research, investors can significantly reduce the risk to their wealth. Here are two high-dividend stocks I would buy with my last £5,000 to generate long-term passive income.

Legal and General Group

Financial services giant Legal and general (LSE: LGEN) has one of the highest dividend yields in the FTSE100. A figure of 8% is more than double the index average of 3.9%.

In fact, the company has a long tradition of paying above-average dividends. This is thanks to its exceptional cash generation, which remains impressive to this day. Cash generation jumped 22% in the six months to June to £1bn, pushing its Solvency II capital ratio to 212% from 182% previously.

Legal & General is a provider of choice for clients in the fields of asset management, life insurance and pensions. As people become more financially conscious – and especially as uncertainty over the state pension makes retirement planning more important – I expect the business activity of l business is growing steadily.

The Legal & General stock price today offers excellent overall value. On top of that huge yield, it boasts a forward price-to-earnings (P/E) ratio of just 7.3x. I would buy it even if the deteriorating economic outlook could dampen near-term earnings growth. These impressive cash flows make it too good to miss.

Assura

Real estate investment trusts (or REITs) are popular stocks for passive income. Indeed, they are required to distribute nine tenths of their annual profits in the form of dividends. In addition, the predictable rents they receive give them the means to obtain regular income.

Assura (LSE: AGR) is a low risk REIT that I would buy for my own portfolio. It owns and operates primary healthcare properties in the UK, the demand for which is increasing sharply as the country’s population rapidly ages and demand for healthcare increases.

Of course, healthcare is also one of those sectors that is largely unaffected by broader economic conditions. This gives Assura exceptional earnings visibility and has helped it become a true dividend aristocrat. Payouts to shareholders here have increased for nine years on the spin.

My only concern is how any future changes to NHS policy might affect GP and other surgeries. Assura is currently trading on a forward P/E ratio of 18.5x. Meanwhile, the city’s forecast that the annual dividend will rise for a 10th consecutive year leaves it with a high dividend yield of 5.3%.