Every month I invest in high-yield dividend stocks that I hope will pay me rising passive income over time.
Here are two of my favourites that I’ll consider snapping up before April with spare cash.
Clean energy
First up we have The Renewables Infrastructure Group (LSE: TRIG), commonly known as TRIG.
This is a FTSE 250 renewable energy fund with a market cap of £2.4bn. It has wind and solar farms and battery storage assets in the UK, Ireland, France, Germany, Spain, and Sweden.
The share price is down 32% over the last 18 months.
The culprit has been higher interest rates, which have caused a sell-off in the shares as investors sought safer income from government bonds and cash. Also, power prices have been falling across Europe.
At the end of 2023, the net asset value (NAV) per share was 127p. Today, the share price is 98p, which means there’s a 22% discount to NAV. In other words, I can invest in the assets at a significant discount.
Last year, TRIG hiked its dividend by 5% to 7.18p per share last year. This translates into a 7.3% dividend yield covered 1.6 times by cash coming in.
Now, like most clean energy funds, TRIG is highly geared and has floating rate debt. So higher interest rates do continue to add an element of risk.
Last year, its cash from projects was £558m. After debt repayments of £219m, this dropped to £339m.
To lower this burden, TRIG has been disposing of assets and may need to do more of this. It intends to reduce its portfolio gearing from 37% to 23% by 2030.
Looking ahead, TRIG is targeting 4% dividend growth this year. That puts the forward yield at an attractive 7.5%. Therefore, I’m keen to add more shares to my portfolio as soon as I can.
Looking eastwards
Next, we have FTSE 100 banking goliath HSBC (LSE: HSBA).
The company recently sold its Canadian operations for $10.2bn and also exited its retail banking business in France. Meanwhile, it has been beefing up its wealth management business in Asia, particularly China.
Of course, this pivot brings its own risks. China can often be a challenging place to do business from a regulatory standpoint and has been suffering from a property sector meltdown for some time.
Additionally, any escalation in tensions between China and Taiwan could disrupt trade flows across Asia, negatively affecting HSBC’s business in the region.
Nevertheless, I reckon I’m being adequately compensated for these risks with a tasty 7.7% dividend yield.
Year
Dividend per share
2025 (forecast)
$0.62
2024 (forecast)
$0.79*
2023
$0.61
2022
$0.32
2021
$0.25
2020
$0.15
*includes a special dividend of $0.21 per share
Long term, I’m really bullish on HSBC’s growth opportunity across Asia. This is the planet’s fastest growing region, with a rising middle class and a ballooning cohort of high-net-worth individuals.
Both classes will need banking and wealth management services. And HSBC intends to become the leading wealth manager across all of Asia. This isn’t your sleepy UK-focused FTSE 100 bank!
Finally, I should note that no dividend is guaranteed. Yet I think TRIG and HSBC — both trading cheaply — look like solid choices for potential passive income and share price gains.
The post 2 of my top FTSE stocks to consider buying for passive income before April appeared first on The Motley Fool UK.
Pound coins for sale — 31 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Ben McPoland has positions in HSBC Holdings and Renewables Infrastructure Group. The Motley Fool UK has recommended HSBC Holdings. 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.
