The Motley Fool

Looking for 6% yields? Check out these dividend investment trusts

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Many investors believe that in order to receive big dividends, they need to buy popular FTSE 100 stocks such as Royal Dutch Shell, HSBC Holdings and GlaxoSmithKline. However, there are many other stocks that have high yields, including several investment trusts. Today I’m looking at two FTSE 250-listed investment trusts that have dividend yields of around 6%.

NewRiver REIT

NewRiver (LSE: NRR) is a property investor, asset manager and developer that specialises in the UK retail sector. Its mission is to own and operate top quality retail properties that provide an attractive environment for shoppers and generate a high, sustainable income. Fund manager Neil Woodford is an admirer of the stock, as it was the 11th largest holding in his Equity Income fund at the end of October.

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...

The investment trust has been an absolute cash cow for investors recently. In the last two years, shareholders have received dividends of 18.5p and 20p per share. At the current share price of 330p, that equates to yields of 5.6% and 6%. Last year, the property manager even paid a special dividend of 3p, meaning that investors received a total yield of 6.9%.

NewRiver released its half-year results this morning, and the good news for income investors is that the dividend has been increased further. Funds from operations (FFO) rose 8%, enabling a half-year dividend increase of 5% to 10.5p. The company stated that the third quarter dividend would also be increased 5% to 5.25p. Chairman Paul Roy commented: “I am pleased to report another successful and highly active period for NewRiver across all aspects of the business, as we continue to build a strong platform to deliver growing cash returns.”

Investors should note that the investment case isn’t risk-free. The company reported a net asset value (NAV) per share of 297p today, yet the share price is currently 330p. That means the shares trade at an 11% premium to the NAV, which is not ideal. However, with City analysts expecting a full-year dividend of 21p this year, and 21.8p next year, there’s potential for some big cash payouts here.

Renewables Infrastructure Group

Another dividend investment trust rewarding investors with sizeable cash returns, is the Renewables Infrastructure Group (LSE: TRIG). This trust invests in a diversified portfolio of renewable energy infrastructure assets, such as wind farms and solar assets in the UK and Northern Europe. As such, it could be a good option for income investors who prefer to invest on an ethical basis. It aims to provide investors with long-term stable dividends, whilst preserving the capital value of the portfolio.

Over the last three years, the trust has paid dividends of 6.1p, 6.2p and 6.3p per share. Last year’s payout is a yield of 5.9% at the current share price. City analysts predict a payout of 6.4p this year and 6.6p next year, which would tip the yield over 6%.

Another advantage of this trust, is that like NewRiver, it pays its dividends quarterly. That’s handy for income investors who depend on regular dividends for their living expenses. At 106p, it also trades at a premium to its NAV, which was 100.6p on 18 August, however, I believe the trust offers potential as part of a diversified income portfolio.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Edward Sheldon owns shares in Royal Dutch Shell and GlaxoSmithKline. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended HSBC Holdings and Royal Dutch Shell B. 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.

Our 6 'Best Buys Now' Shares

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.

Simply click below to discover how you can take advantage of this.