I’m always on the lookout for dividend shares with attractive yields, solid coverage, and backed by a strong business. And I also look to buy in line with global economic and social trends, such as the green revolution.
Likewise, I tend to steer clear of stocks that operate in sectors that are a contradiction to these trends. For example, I don’t tend to buy pure oil and gas stocks all that often, and I’m not a fan of tobacco stocks.
A good proportion of my investments are made around the green revolution, and specifically around electrification and renewables.
Moreover, in 2021, solar was crowned as the cheapest source of energy – closely followed by onshore and offshore wind. In the UK specifically, onshore wind is the cheapest, given the gusty nature of our islands.
So here are three stocks offering me attractive dividends and exposure to the green agenda.
Renewables Infrastructure Group
The Renewables Infrastructure Group (LSE:TRIG) is a UK-based trust investing in renewable energy assets across Europe. The trust has a diverse portfolio, reducing the risk from over-concentration in individual assets, technology types, weather systems, power markets and regulatory frameworks.
Currently, the FTSE 250-listed stock offers me a 5.2% dividend yield. And I think that’s very attractive for a company in a highly exciting and promising part of the market. Last week, the company announced the fourth quarterly interim dividend of 1.71p per ordinary share.
The Electricity Generator Levy in the UK has provided some degree of uncertainty to shareholders, which is likely why the stock trades some distance below its net asset value right now.
But I’m investing for the long run, and I’m not expecting the levy to hamper this sector beyond the next 18 months. I’m looking to buy before the stock goes ex-dividend next week.
BP
BP (LSE:BP) is one of the world’s largest energy firms with a traditional focus on the hydrocarbons industry. Renewables are yet to account for a significant proportion of the company’s revenue, but that could change in the coming years.
Nearly 50% of the energy giant’s $15bn capital expenditure budget will be channelled into greener power by 2025. Some analysts are forecasting that BP’s renewables arm could generate as much as $9bn-$10bn in underlying cash profits by 2030.
This certainly interests me, but there’s also reports that Bernard Looney, chief executive of BP, is concerned about the returns from its investments in renewables, such as wind and solar. Reportedly, he wants to focus on profits not just the green agenda.
I do find this report interesting as solar and wind are the cheapest ways to generate power in many circumstances. Clearly, other companies are making it profitable.
I’m not buying BP right now as it’s been on something of a bull run. But I’m keeping a close eye on it.
