Victoria Hasler, head of fund research at Hargreaves Lansdown, notes that

Rising interest rates have led to their income streams looking less attractive than they once did, rising discount rates have impacted asset valuations, and active managers have struggled in markets led by a few big stocks.

She also notes that “over the last couple of years we have seen some good quality investment trusts trading on hefty discounts“. This remains the case as we head into the New Year.

So I’m searching for the best value trusts to consider today. Here are two of my favourites.

Octopus Renewables Infrastructure Trust

Donald Trump’s return to the presidency has sent a shockwave across renewable energy stocks. Even companies with little-to-no exposure to the US have slumped following November’s election.

This provides a terrific dip buying opportunity in my opinion. One such business that’s caught my attention is Octopus Renewables Infrastructure Trust (LSE:ORIT).

At 63.5p per share, it trades at a huge 38.7% discount to its estimated net asset value (NAV) per share of 103.6p.

Recent share price weakness has also turbocharged Octopus’ dividend yield to 9.5%. To put this in context, the average for FTSE 100 shares is way back at 3.6%.

I like this trust because of the excellent diversification it offers. It generates power from offshore and onshore wind turbines as well as from solar farms. This allows consistent power generation across all seasons, and boosts efficiency by using technologies that are tailored to different environments.

With assets across the British Isles, Finland, Germany, and France, it can also remain profitable despite poor weather or regulatory issues in one or two regions.

Importantly, it also has no exposure to the US, removing uncertainty over the future of green policies under President-elect Trump.

Such fears — however impractical — may continue to weigh on Octopus’ share price. But over the long term I think it could prove a robust investment.

Gore Street Energy Storage Fund

The Gore Street Energy Storage Fund (LSE:GSF) shares several characteristics with the Octopus trust.

Its share price has declined due to falling confidence in renewable energy. This is because demand for its technologies are tied to growth in the renewables sector, where they provide a stable flow of energy even during unfavourable weather.

Gore Street is also vulnerable to higher interest rates that dampen asset values and increase borrowing costs.

But like Octopus, it also offers excellent value I find hard to ignore. At 50.6p per share, the trust trades at an 49.7% discount to its NAV per share of 100.7p.

Meanwhile, its forward dividend yield is a staggering 13.9%.

This is another share with considerable long-term potential as the world switches away from fossil fuels. Bloomberg estimates the global energy storage market will experience an annual growth rate of 21% between now and 2030.

And Gore Street is rapidly expanding to supercharge long-term revenues. Operational capacity leapt 45% in the 12 months to September, to 421.4 MW.

The post Fancy a 13.9% dividend yield? Consider these dirt-cheap investment trusts! appeared first on The Motley Fool UK.

What’s more, many of these companies are trading at a discount on the back of higher interest rates. However, with the Bank of England starting to ease monetary policy, I could be looking at a fantastic opportunity to invest in the future of Britain’s energy grid.

A leader in wind

Wind power current boasts one of the highest levels of efficiency when it comes to renewable energy technology. And with the UK being an Island, it’s not short of ideal wind farm locations both on- and off-shore.

There are a lot of companies operating in this space. However, one of the largest is Greencoat UK Wind (LSE:UKW), controlling approximately 7% of the market.

The business model’s simple. It owns wind farms across the country, generates clean electricity, and then sells it to suppliers that eventually deliver it to households and corporations alike. Since electricity demand’s only rising, cash flows have followed, resulting in nine years of consecutive dividend hikes.

A leader in solar

Just like Greencoat, Foresight Solar Fund (LSE:FSFL) owns a portfolio of renewable energy assets that produces and sells electricity to suppliers. However, the key difference is the source of the electricity. As its name suggests, Foresight specialises in solar farms instead of wind. And having both companies provides a bit of diversification against the weather.

Should the wind stop blowing, the sun might still be shining, and vice versa. Foresight also provides a bit of international exposure as it has operations across Spain and Australia as well.

A leader in storage

A big problem with renewables is that electricity generation may not be active when it’s needed most. That’s where battery storage systems enter the picture. Foresight has a few storage assets in its portfolio. But the capacity pales in comparison to Gore Street Energy Storage Fund (LSE:GSF).

Gore Street’s been systematically expanding its capacity, boosting it by another 45% to 421.1 MegaWatts in the 12 months leading up to March. With more electricity stemming from renewables, demand for storage solutions is on the rise as the stability of electrical flow becomes increasingly critical.

Nothing is risk-free

These three businesses operate in the same industry. However, each tackles a different corner of the market, providing welcome diversification and potentially making them among the best stocks to buy within this space. Yet that doesn’t make them risk-free.

Even with some jaw-dropping yields and free cash flow generation, renewable companies still have challenges to overcome. I’ve already highlighted a few, such as the weather. But the lack of pricing power can also be problematic.

When energy prices tumble, so do these firms’ profit margins. And while fixed electrical price agreements can mitigate the impact of price drops in the short term, prolonged periods of low prices could compromise cash flows.

Nevertheless, with valuations looking dirt-cheap and dividend yields juicy, these stocks look like they could be fine additions to my income portfolio once I have more capital at hand.

The post 3 of the best renewable energy stocks to buy? appeared first on The Motley Fool UK.

With that in mind, it’s no surprise that so many of these stocks typically pay a chunky yield. But in 2024, this impact is only amplified, thanks to a combination of factors from investor sentiment to interest rates.

In June, Gore Street Energy Storage Fund (LSE:GSF), NextEnergy Solar Fund (LSE:NESF), and Residential Secure Income (LSE:RESI) are in the top 15 UK REITs with the most generous dividend yields offering 11.7%, 11.6%, and 10.1% payouts. Does that make them the best passive income investments right now? And what should investors be on the lookout for?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The debt problem

As previously mentioned, the REIT business structure requires the lion’s share of profits to be redistributed through dividends. Consequently, the level of retained earnings for these businesses is minimal, at best.

Over the last decade, this hasn’t been much of a problem. After all, debt was cheap with interest rates sitting close to 0%. Today, the economic landscape is quite different. The Bank of England has raised rates to 5.25%, turning previously affordable debt into a ticking time bomb.

To make matters worse, the fair market value of a REIT’s assets, whether it be solar panels or residential properties, is also adversely affected by the cost of capital. All three highlighted companies have suffered a massive blow to their reported net income due to the revaluation of assets.

These losses only exist on paper (since they don’t affect cash flow). However, it also means that if a firm is forced to sell some of its assets to raise money, the transaction is going to be less than favourable, likely resulting in the destruction of firm value and shareholder wealth.

That’s why most REITs, including Gore Street, NextEnergy, and Residential Secure, are all trading at a significant discount to their net asset value. And these depressed stock valuations are a big contributor to their generous yields.

Bargains hiding in plain sight?

Despite leverage being a valid concern, the latest inflation figures suggest that an interest rate cut is coming soon. And apart from easing the pressure of existing and new debt burdens, the recovery of asset market values could quickly send REIT share prices flying.

If that’s the case, investors could be looking at an extraordinary opportunity to lock in a sustainable double-digit yield. After all, NextEnergy Solar has actually just hiked its dividend, while Gore Street’s improved cash flow is improving dividend coverage and affordability as it maintains its existing payout.

However, it’s not all sunshine and roses. Residential Secure Income has recently had to cut its payout as underlying earnings continue to suffer in the unfavourable operating environment.

As with any income investment, chasing high yields requires careful investigation. This is especially true for REITs, given their heavy dependence on external financing through debt. And while interest rate cuts are expected to improve prospects this year, all it takes is a rebound of inflation for those expectations to be thrown out of the window.

Currently, out of these three businesses, NextEnergy Solar has most of my attention. Given its superior performance and resilience, I believe the company merits a closer look for a potential investment despite the risks that come with it.

The post Are these the best 3 REITs to buy for passive income in 2024? appeared first on The Motley Fool UK.

Croda International

What it does: Croda International sustainably creates speciality chemicals to enhance products in a wide range of industries.

By Oliver Rodzianko. Croda International (LSE:CRDA) has “committed to becoming the most sustainable supplier of innovative ingredients on the planet”.

Not only is the company leading in environmental preservation efforts, but it’s also making a handsome profit in the process. Over the past 10 years, the shares have grown 78% in price. It also has a net margin of 10%, which is great for its industry.

Recently, it has hired sustainability expert Aris Vrettos. Bringing 15 years of top-class experience, I think this is going to even further deepen the sustainable future of Croda.

Now, I must mention that in the past, it has faced legal action over negative effects on the environment from a plant it operated. There’s some chance that something like this could happen again, which would be bad reputationally.

But overall, this company looks very strong to me. I appreciate its efforts in getting toward a cleaner, safer work culture.

Oliver Rodzianko does not own shares in Croda International.

Gore Street Energy Storage Fund

What it does: Gore Street Energy Storage Fund invests in power retention assets across Europe and the US.

By Royston Wild. If renewable energy is to take over from dirtier sources, the energy supplied by wind, solar and tidal sources will need to be reliable. Regular power cuts are not acceptable for any developed economy.

This is why Gore Street Energy Storage Fund (LSE:GSF) has a large and growing market to exploit. This small cap invests in utility-scale power storage assets with the aim of providing regular dividend income to its shareholders.

Today its objective is to provide annual dividends equivalent to 7% of net asset value (NAV) per ordinary share, or 7p per share, whichever is higher. It’s a strategy that creates a chunky 5.1% dividend yield for the current financial year.

Gore Street’s share price, like those of many renewable energy and property stocks, has been under pressure due to higher-than-normal interest rates. This could remain a problem, too, if inflation fails to drop significantly.

However, at current prices I think the trust is worth serious consideration. At 60.3p per share, it trades at a whopping 43% discount to its estimated NAV.

Royston Wild does not own shares in Gore Street Energy Storage Fund.

Renewi

What it does: Renewi is a European waste management company that uses most of the waste collected for recycling or energy production.

By Christopher Ruane. When Australian infrastructure-focused asset manager Macquarie made a takeover bid for Renewi (LSE: RWI) last year, it was rejected as undervaluing the company.

Since then, Renewi shares have fallen below the bid level. But the share price has still grown by an impressive 72% over the past five years.

Renewi shares trade on a price-to-earnings ratio of 12, which I think looks cheap. Whether that turns out to be the case depends partly on Renewi maintaining or growing its earnings. The past couple of years have been good, however the track record is inconsistent.

The business is highly cash generative but has a net debt that outstrips its market capitalisation. That is a risk to long-term profitability.

I like the business’ clear strategic focus, its extensive operational footprint and its proven business model. I see long-term revenue growth opportunities. If the company can reduce its indebtedness, I think those revenues provide a solid basis for profitability.

Christopher Ruane does not own shares in Renewi.

Tesco

What it does: British multinational high street supermarket chain selling groceries and general merchandise.

By Mark David Hartley. Founded in London in 1919, Tesco (LSE:TSCO) is now one of the largest retailers in the world. It has a strong focus on sustainability initiatives, often ranking near the top of lists for environmental, social and governance (ESG) scores. I like that it uses ethical sourcing and is known for giving back to local communities, including support for local farmers and suppliers. In its stores, I often see promotions for fair trade products and healthy, budget-friendly food options for customers.

However, it could improve more by reducing its reliance on plastic packaging and making efforts to reduce emissions from transportation and logistics. There is also some evidence to suggest its fair labor practices could be better. Overall, it scores higher than most of its competitors when it comes to ESG. I think it strikes a good balance of committing to realistic sustainability efforts without threatening its bottom line.

Mark David Hartley owns shares in Tesco.

The Renewables Infrastructure Group

What it does: The Renewables Infrastructure Group is an investment trust with a portfolio of onshore and offshore wind farms and solar parks in the UK and Europe.

By Ben McPoland. A FTSE 250 stock that I’ve been buying opportunistically over the past year is The Renewables Infrastructure Group (LSE: TRIG). It’s down 27% in two years.

One silver lining to this falling share price is that the dividend yield now stands at 7.3%. And the forecast yield for this financial year is a very attractive 7.6%.

Beyond the passive income potential, what I like here is the diversification in both assets (wind and solar farms and battery storage assets) and geography (six countries).

Unfortunately, the clean energy sector has fallen out of favour due to higher interest rates. Green projects often require significant upfront investment, and higher rates make borrowing for them more expensive. We don’t know when or by how much rates will come down. This adds uncertainty.

However, I can’t help feeling this is already more than reflected in the current valuation. The shares are trading at a whopping 23.1% discount to the estimated value of the firm’s assets.

Overall, I think there is a lot of value on offer here for patient investors.

Ben McPoland owns shares in The Renewables Infrastructure Group.

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Here are two top small-cap shares I’m hoping to buy for my Stocks and Shares ISA when I have cash to invest.

1. Angle

Rising healthcare investment across the globe provides excellent growth opportunities for medical stocks. Angle (LSE:AGL) is one such company on my radar today.

The penny stock is a liquid biopsy company that helps doctors diagnose cancers. And today its patented Parsortix technology is the only one currently cleared by the US Food and Drug Administration for the capture and harvest of living cancer cells from metastatic breast cancer patient blood for analysis.

You may have seen Angle’s share price spike recently. It surged after the company released excellent clinical results from its DNA molecular analysis of blood samples using Parsortix.

The study — which looked at blood samples from patients with breast, lung, and ovarian cancers — identified DNA mutations that were not found in other types of test. Angle said that the study “gives a completely new insight into cancer clonal evolution not currently available to researchers or oncologists”.

The number of cancer cases is tipped to rise steeply in the coming decades. The International Agency for Research on Cancer thinks there will be 28m new cancer cases each year across the globe by 2040. In this climate, Angle could see demand for its technology explode.

The small cap has a history of tapping its shareholders to solve funding issues. And this will remain an ongoing risk moving forwards. But encouragingly Angle says it has enough cash to operate until the second quarter of 2025 following cost-cutting measures. I think it could be a great growth stock to own.

2. Triple Point Energy Transition

Investment trust Gore Street Energy Storage Fund (LSE:GSF) also has tonnes of investment potential, in my view. As its name implies, the business invests its money in assets that will help the world move over from fossil fuels. As a consequence, it provides excellent exposure to the rocketing green economy.

Power generation from renewables like wind, solar, and water is famous for being highly unstable. Modern life relies heavily on a constant supply of electricity, so this can cause significant problems.

This is where Gore Street comes in. Its technology (which is located across Europe and the US) stores energy and releases it when needed, like when sun doesn’t shine and the wind fails to blow. This critical role means demand for its services should rise strongly as renewable energy capacity ramps up.

Gore Street’s share price leapt towards the end of 2023. Yet at current prices of 81p per share, the firm still looks undervalued. Right now it trades at a large discount to the value of its assets (its net asset value currently sits at 111p per share).

The small cap also carries a large 9.1% dividend yield, more that double the 3.8% average for FTSE 100 shares. I think this is a brilliant buy at today’s prices.

The post 2 penny stocks I’d love to buy for my Stocks & Shares ISA today! appeared first on The Motley Fool UK.

Yet, even with new temporary tax levies, renewable energy businesses also offer tasty income opportunities. Many of which look far more sustainable than their fossil fuel rivals. So much so that I’ve already added one to my income portfolio and identified two others as potential candidates for future investment. Let’s take a closer look.

The UK’s future #1 resource?

Being an island, it’s no secret that the UK can be a pretty windy place. In fact, eastern coastal regions near Grimbsy are some of the windiest places on Earth. So it’s no wonder that the world’s largest wind farm, Hornsea 2, is located there. Or that Hornsea 3, which will be roughly twice as large, is being built there as well.

The east coast is far from the only windy place in the UK. And the abundance of this renewable resource has proven to be exceptionally valuable to Greencoat UK Wind (LSE:UKW). The firm owns a vast portfolio of on- and off-shore wind farms across the country, selling the electricity they generate to energy providers like Centrica.

Since demand for clean energy is only increasing, the group’s cash flows have steadily been bolstered from both expansion of its portfolio and higher energy prices. Subsequently, management has hiked dividends for eight consecutive years, consistently outpacing inflation. That’s why it’s already in my portfolio.

Two more green energy winners?

Greencoat is not the only renewable stock out there. Foresight Solar Fund (LSE:FSFL) and Gore Street Energy Storage Fund (LSE:GSF) are two others I’m currently keeping my eye on. The former operates in a similar fashion to Greencoat, using solar instead of wind farms. While the latter is specialising in energy storage solutions. After all, the sun isn’t always shining, nor is the wind blowing, making energy storage a key component in the renewable energy chain.

Both companies appear to have similar cash generative capabilities, with Foresight already proving itself a reliable source of expanding passive income. Gore Street is currently a bit more speculative. But if successful, it could be a lucrative source of returns.

However, as promising as all these enterprises seem, they all share some common weak spots. The most prominent being the lack of pricing power. The UK energy industry is highly regulated, with companies having next to no control over the prices they can charge. And with most of their costs fixed, this can turn into a serious disadvantage when energy prices drop.

Even ignoring this problem, expanding energy infrastructure is hardly cheap. These businesses have already racked up considerable debt over the years to fund expansion. And while they’re seemingly able to keep up with their current loan obligations, the recent interest rate hikes will undoubtedly make future expansion more challenging.

The bottom line

Renewable energy companies on the London Stock Exchange currently look like a terrific source of passive income. However, even owning a diversified basket of these firms exposes a portfolio to common threats. Therefore, investors could be well served to blend an income portfolio with both renewable energy stocks and businesses from other industries.

The post The top 3 renewable energy income shares to buy today? appeared first on The Motley Fool UK.

Wind farms

Looking at Greencoat UK Wind (LSE: UKW), I see the share price is up 15% over the past 12 months.

Even after that, we’re still looking at a forecast price-to-earnings (P/E) multiple of only around seven. So that’s a company with growing profits, on an attractively low P/E. Oh, and there’s a forecast dividend yield of 5% for this year too, predicted to rise to 5.5% in two years.

I see some risks for Greencoat. Firstly, high electricity prices are currently boosting profits, and that won’t last forever. So there might be pressure on future dividends. Still, cover by earnings is currently strong, at over 2.5 times in 2021. There’s also £900m in debt on the books, which I don’t like.

But I do think Greencoat’s business model, of holding and operating a large portfolio of wind farms probably offers some of the lowest risk in the sector.

Batteries

Generation is one part of the renewable energy challenge, and storage is another. That’s where a company like Gore Street Energy Storage Fund (LSE: GSF) comes in. The shares have been erratic in the past couple of months, and are down 2% over the past year.

The mediocre share price performance means Gore Street’s forecast dividend yield stands at 6.2%, which I definitely like. Profits have been erratic. And the company has been raising capital to fund its expansion.

That makes it tricky to assess likely future earnings right now, and to get a feel for whether earnings are likely to cover dividends sustainably. I’m generally wary of companies that expand rapidly too.

Still, Gore Street is in the battery storage business, and it could be argued that grabbing a slice of the market as fast as possible is the way to go.

Energy giant

My final candidate is energy giant SSE (LSE: SSE), which is on a predicted dividend yield of 5.2%. SSE shares are up 9% over the past 12 months through a volatile year.

SSE has the benefit of being a well established energy infrastructure company. It operates across the UK and Ireland, and it invests heavily in low-carbon energy.

Its established base means it should be less risky than smaller firms just making inroads into the business. Buy saying that, dividends have been thinly covered by earnings in recent years — only around 1.1 times in the 2021-22 year.

So a couple of years of recession and pressure on electricity demand might leave things a bit stretched. Earnings haven’t been growing too strongly, with 2022 earnings coming in slightly below pre-pandemic 2018.

Which to buy?

I think all of these have their own potentials, and their own risks. But I’d probably buy all three, except for that one perpetual drawback — too many cheap shares out there, and not enough cash. Probably, I’ll invest in a renewable energy stock before too long though, and these are my top three candidates.

The post Are these 3 high-dividend renewable energy stocks no-brainer buys now? appeared first on The Motley Fool UK.

Here comes the sun

Renewable energy stocks could prove to be highly lucrative investments over the next decade. It’s why I have bought shares in green energy giant The Renewable Infrastructure Fund in 2022.

We all know that demand for clean energy is set to boom in the coming decades as the climate emergency intensifies. The International Energy Agency thinks renewable energy capacity will rise 60% between 2020 and 2026, to 4,800 GW.

Funds that invest in green energy could deliver exceptional profits growth in this environment. But this isn’t the only reason why I like them. Because electricity is an essential commodity, these shares also have defensive qualities that provide excellent earnings stability. This is something that is particularly attractive to me as someone seeking reliable dividend income.

Today, I’m also considering increasing my exposure to renewable energy stocks. And I’m thinking of doing it by investing in US Solar Fund (LSE: USF).

The business met its dividend target of 5.5 US cents per share in 2021. It plans to raise the annual payment by a steady 1.5%-2% in the years ahead too.

Made in the USA

As its name suggests, this share is focussed on the United States. This is what makes it particularly attractive to me.

The US has long been one of the most favourable territories for renewable energy stocks to operate in. And things have got even better this week too when the Inflation Reduction Act became law. The act commits $370bn worth of spending on green energy infrastructure and will provide juicy tax credits to firms like US Solar Fund.

Renewable energy stocks like this of course carry risk. During periods of unfavourable, weather profits could take a hit if power generation slips. But over a long time horizon, I believe US Solar Fund should still prove a lucrative UK share to own.

High voltage

Gore Street Energy Storage Fund (LSE: GSF) could be another highly profitable way to play the green energy revolution. This is despite the company’s currently high debt levels.

Power generation from solar and wind is unpredicable. And so technology is needed to store electricity during productive periods. This enables a constant flow of electricity when the sun doesn’t shine and winds are low. This is what Gore Street specialises in.

The business owns a string of battery storage assets in Britain, the US, Germany and Ireland. And it is aggressively expanding its portfolio at the moment. Total battery capacity soared to 628.5MW as of March, up 65% year-on-year.

I also like Gore Street because of its potentially lucrative dividend policy. The company is targeting annual dividend payments based on a 7% yield on the average NAV per share. This is subject to a minimum payout target of 7p per share. That 7p minimum yields a healthy 5.9% at current prices, by the way.

The post 2 renewable energy stocks I’d buy for lifelong passive income! appeared first on The Motley Fool UK.

Assurance and risk management business DNV expects electricity consumption worldwide will rise 10% between now and 2050. It predicts that green energy consumption will soar past demand for fossil fuels too.

DNV also thinks solar power will account for between 40% and 45% of all electricity by the middle of the century. It predicts too that wind power will be responsible for between 30% and 35%.

3 renewable energy stocks I’d buy

So which renewable energy stocks should I consider buying for my portfolio? Here are three green power giants on my radar right now.

#1: US Solar Fund

As DNV says, solar power looks set to be the most popular form of green power going forward. This is why I think buying US Solar Fund could be a good idea.

You may have guessed that this fund focusses on investing in solar farms in the US. This is another reason I like this particular energy share as government support for the solar sector is particularly strong in the States.

One problem with solar power is that the pollution it emits is higher than that of other renewable sources. This means legislation helping the industry might not be as favourable in the future.

Still, as things stand today, I believe the potential rewards of owning US Solar Fund shares outweigh this risk.

#2: Greencoat Renewables

I also like Greencoat Renewables because of its geographic footprint. In this case, its assets can be found in Ireland, France, Spain, Sweden and Finland.

This is important because power generation from renewable sources can be extremely unpredictable. When the sun doesn’t shine and the wind doesn’t blow, profits can take a significant hit.

The uncertainty related to weather conditions is still a risk to Greencoat Renewables, which focuses almost entirely on wind farms. But, in my opinion, it offers more security than businesses whose assets cluster around a smaller area. It can realistically expect favourable weather conditions to reign in some of its territories at all times.

#3: Gore Street Energy Storage Fund

The erratic nature of renewable energy generation actually plays into the hands of firms like Gore Street Energy Fund.

This renewable energy stock buys and builds battery storage assets which accumulate power and deploy it as and when needed. It therefore plays a critical role in keeping the flow of electricity moving when power generation from wind turbines and the like begins to drop.

Gore Street is focused on the UK and Ireland, though its current pipeline is geared toward expanding in the US and Western Europe. Demand for its services looks set to grow rapidly as the number of green energy projects soars.

I’d buy Gore Street even though rising competition in the energy storage industry poses a potential threat.

The post 3 renewable energy stocks to buy right now appeared first on The Motley Fool UK.

Winds of change

As the name suggests, Greencoat UK Wind (LSE: UKW) specialises in the business of wind-generated electricity in Britain. It could therefore be well placed to benefit from the country’s rapidly-growing appetite for this sort of green power.

According to Renewable UK, Britain’s pipeline of offshore wind projects sits at an eye-popping 86MW. That’s eight times more than current capacity in the UK, the trade association says. Meanwhile rumours abound that the government is about to introduce planning reforms to make it easier to build onshore wind farms. This is designed to help Britain meet its net zero targets and reduce its dependency on Russian fossil fuels. Now could be a great time to invest in wind energy stocks, then.

Too cheap to miss?

Greencoat UK Wind has 43 wind farms on its books following fresh acquisition activity in February. And it has considerable financial firepower to continue growing its portfolio after raising £648m via two separate share placings last year.

The costs of operating wind farms can be unexpectedly expensive. This has the potential to hit profits at the likes of Greencoat UK hard. But I still think the long-term benefits of owning this renewable energy stock outweigh the risks.

Besides, Greencoat offers the sort of all-round value I think is hard to ignore. City analysts think earnings here will rocket 32% year-on-year in 2022. This leaves the business trading on a forward price-to-earnings (P/E) ratio of just 6.2 times.

The green energy giant also carries a mighty 5.1% dividend yield right now.

Another renewable energy stock I’d buy

Gore Street Energy Storage Fund (LSE: GSF) is another green energy business I’m considering snapping up today. This company builds and acquires battery storage projects across the UK and it recently entered the Republic of Ireland too.

Gore Street provides an essential role in the world of low-carbon electricity. The technology it invests in is able to store the excess electricity that renewable projects generate. The wind doesn’t always blow and the sun doesn’t always shine. Gore Street’s battery projects then allow a constant stream of electricity to flow 365 days a year.

Battery demand set to boom

I’m concerned about the amount of debt that Gore Street has accrued to pursue its expansion strategy. With interest rates rising the cost of serving its debts could head through the roof.

Still, in my opinion the bright outlook for the energy storage market means Gore Street remains an attractive UK share to own today. Analysts at Fortune Business Insights believe the battery energy storage market will be worth $26.8bn by 2028, up from $9.2bn last year.

Right now Gore Street’s forward dividend yield sits at 6.1%. As an income investor I find this sort of value hard to ignore. Like Greencoat UK Wind, this is a renewable energy stock I’d happily buy in April.

The post 5%+ dividend yields! 2 renewable energy stocks to buy in April appeared first on The Motley Fool UK.