I’m building a list of high-yield companies that could help me build a healthy passive income.
Here are four on my shopping list for next month. Each carries a forward dividend yield far above the 3.7% average for FTSE 100 shares.
Foresight Solar Fund
Renewable energy isn’t as dependable as nuclear, oil, or gas. For this reason, earnings at green energy producers can stagnate or even fall during cloudy and/or calm conditions.
But I’d still be tempted to add Foresight Solar Fund to my portfolio. It operates solar assets in the sun-baked territories of Spain and Australia as well as the UK. This wide geographic footprint also spreads risk.
Demand for solar energy is tipped to boom as the fight against climate change heats up. The International Energy Agency thinks solar power capacity will surpass that of coal by 2027.
Funds like Foresight — which incidentally carries a huge forward 8.1% dividend yield — will play a critical role in helping companies hit their net zero targets.
Gore Street Energy Storage Fund
The same drive towards cleaner energy makes Gore Street Energy Storage Fund an attractive investment, too. In fact the forward dividend yield here sits at an even better 9.7%.
As renewable energy capacity increases so will demand for battery storage assets. Keeping a constant flow of energy going is critical, and Gore Street’s assets help to soothe the unpreditability issue I mentioned above.
High levels of debt are something to keep an eye on. But I still believe this small-cap share is an attractive investment today.
Mining companies like Glencore will also play a critical role in the green revolution. Technologies like solar panels, electric vehicles, and charging infrastructure require vast amounts of copper alone.
But the energy transition isn’t the only reason I’m bullish on this FTSE 100 company. Through its huge mining and marketing operations it should also capitalise on phenomena like the upcoming construction boom, soaring demand for consumer electronics, and an expansion in global manufacturing.
Pleasingly Glencore has vowed to get rid of its coal business. As the world moves away from fossil fuels this seems like a wise idea, though investors should remember there is still some uncertainty over divestment timescales.
On balance I think it could be a great stock to buy for the next decade. And a vast 8.6% dividend yield for 2023 sweetens the deal.
At 8%, Tritax Eurobox offers one of the biggest forward dividend yields among all the FTSE 250 shares.
Tough economic conditions in its European markets could sap customer demand in the near term. But this wouldn’t deter me from investing today. I think interest in its warehouses and logistics hubs will steady rise as companies invest in e-commerce and shake up their supply chain management.
Tritax owns and operates assets in major economies including Germany, Italy, and Belgium. It also has exposure to fast-growing Eastern Europe, having added Polish assets to its portfolio.
Rising interest rates could remain a problem by hampering its development plans. But I sitll expect earnings to rise strongly here over the next decade.