NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

Freetrade thinks these 3 ‘alternative’ dividend stocks are worth a second look

Freetrade thinks these 3 ‘alternative’ dividend stocks are worth a second look
Image source: Getty Images.


It can sometimmes be difficult to find original and unique ways to invest your money. Although stocks that pay dividends are sometimes thought of as a boring option, that’s not always true.

Freetrade has put together some alternative income investment choices that you may not have considered. Let’s take a look at the Freetrade team’s interesting dividend suggestions.

Compare stocks and shares ISAs

If you’re planning to open a stocks and shares ISA, choosing the right platform is important. To help you narrow down the choices, we’ve created a list of some of the top stocks and shares ISAs.

What are dividend stocks?

Before diving in, it’s worth quickly clarifying what dividend stocks are.

This just means that the company or fund rewards investors by paying them some money. The amount paid is known as the dividend yield. This yield is calculated as a percentage of the share price.

Many companies that pay dividends try to keep payments steady to give investors a certain level of stability. But it’s worth remembering that there is no guarantee when it comes to dividend payouts. Sometimes they can change drastically. This was something we saw happen a lot last year.

What are some alternative dividend stocks?

People often associate dividends with more traditional companies rather than exciting new businesses.

However, there are some surprising places you may be able to find stocks that pay dividends. Here are some areas that Freetrade suggests may be worth checking out:

1. Music royalties

We all love a good tune. But how about making money from music? What if I told you that you can earn without ever having to get up on stage, record an album or even play an instrument?

Investing in firms like Hipgnosis Songs is a cool way for investors to become music moguls. The company has been buying rights to some pretty big tracks from artists like Justin Bieber, Rihanna and Beyoncé.

By investing in a company like this, you can get a share of the royalties. This dividend stock pays a decent yield to the tune of 4%. Music to your ears I’m sure.

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

2. Renewable energy

You have probably noticed there’s been a big green transformation. It’s a movement that has seen lots of funding pouring into sustainable energy companies.

How about getting a slice of all that good green energy? Rather than trying to pick the next big titan of industry, you can use an investment trust to become an owner of multiple businesses.

The dividend stock Freetrade suggest taking a look at is the Renewable infrastructure Group. They allow investors to put money into around 70 renewable energy companies. What’s even better for income-focused investors is their 5% dividend yield.

3. Social housing

This is an area that many investors don’t realise they can support and make money from.

Another opportunity to receive a 5% dividend yield comes from Civitas Social Housing, a real estate investment trust (REIT) and a FTSE 250 company providing inflation-linked returns to investors.

By investing in a trust like this, investors can receive a notable dividend whilst still focusing on ESG investing.

How do I invest in dividend stocks?

If dividend investing seems interesting to you, it’s so easy to get the ball rolling.

Using a share dealing account, you can choose individual companies or investment trusts and funds that focus on dividends.

Reinvesting dividend income is a great way for smart investors to benefit from compound interest over time. Just remember that all investing carries risk. Although dividends are generally quite stable, things aren’t always smooth sailing.

Was this article helpful?
YesNo

Reviewed and rated 4 stars out of 5 by MyWalletHero

Need investment advice? Get a free initial review lasting up to 1 hour, plus £50 off any follow-up advice.

MyWalletHero has sourced you a £50 discount off the cost of advice when you find an independent or whole-of-market financial adviser through Unbiased.co.uk*. All advisers are FCA-regulated, qualified and give fully unbiased advice. To find yourself an adviser fast and for free – use the Unbiased matching tool.

*This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.