NewRiver REIT (LSE:NRR) and iShares World Equity High Income ETF (LSE:WINC) both have excellent records of paying reliable and growing dividends. What’s more, recent stock market volatility has supercharged their forward dividend yields close to 10%.

Here’s why they could be two of the best dividend stocks for ISA investors to consider this April.

Flowing dividends

Like many other property stocks, NewRiver REIT’s shares have dropped as oil prices have soared. If interest rates climb to curb inflation, the company’s borrowing costs will rise and asset values will take a hit, impacting earnings.

I think this drop represents an attractive dip buying opportunity. At 70p, the real estate investment trust (REIT) trades at a whopping discount per share of 105p relative to its net asset value (NAV). It also carries a bulky 9.8% dividend yield for this financial year (to March 2027).

NewRiver has its tenants locked down on long contracts, with a weighted average lease expiry of 8.6 years as of September. This means it can expect stable rental income even if the UK economy struggles, giving it better dividend prospects than many other UK shares.

There’s another advantage to buying NewRiver REIT shares for dividends. In exchange for corporation tax breaks, at least 90% of annual profits must be paid out in dividends. This provides shareholders with an added layer of visibility by limiting management decisions on capital distribution.

Around a quarter of the company’s portfolio comprises retail parks, a fast-growing sector. However, I’m not as taken by the less stable shopping centre assets that make up the remainder. Yet, given that enormous yield and massive discount to NAV, I think NewRiver is worth a close look.

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.

Strength through diversification

Like most shares-based funds, the iShares World Equity High Income ETF has slumped in value in recent weeks. If the Middle East war drags on, it could well continue sinking

Still, I expect this exchange-traded fund (ETF) to recover strongly over time. After all, the long-term direction of global stock markets has always been up. And in the meantime, investors can expect the fund to keep delivering juicy dividends. For 2026, the dividend yield here is also 9.8%.

So what’s its secret? As this name implies, this ETF invests holds shares in high-yield global shares, roughly 470 in total. This spreads out the impact of possible dividend volatility among a handful of stocks, allowing it to still deliver market-beating payouts to shareholders.

But here’s the cool part: with substantial cash holdings and government bonds too, it can deliver a more stable second income than just stocks-based ETFs. Given this extra trick up its sleeve, I think it’s a top passive income share to consider for the new ISA period.

The post 9.8% dividend yields! 2 passive income shares to consider in an ISA appeared first on The Motley Fool UK.

Targeting a reliable sector

I’m talking about NewRiver (LSE:NRR). The REIT owns and manages UK retail property, with a focus on community shopping centres and retail parks. The income from tenant rents provides the main source of revenue for the business.

For me, the positive outlook starts with the nature of the tenants that NewRiver has. It isn’t trying to bet on premium fashion or aspirational spending. Its portfolio is tilted towards affordable, needs-based retail. Given that we could be in for another tough year in the UK for economic growth, consumers are likely to focus their spending on shops that offer essentials. The Q3 trading update from January showed an occupancy rate of 96%, with a 91% retention rate, backing up the thinking that the REIT could perform well even during a tough period ahead.

With a market cap of £309m, it’s true that the company isn’t anywhere as large as some FTSE 250 peers. However, assets under management sit at £2.3bn. Therefore, it’s certainly a firm that I believe should be on a lot more investors’ watchlists.

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.

Dividend potential

The dividend is another big attraction, and it looks sustainable to me. NewRiver’s stated policy is to pay dividends equal to 80% of underlying funds from operations, declared twice a year. That’s important because it ties the payout to recurring cash earnings rather than wishful thinking. In the latest trading update, the dividend was 125% covered. This means that the current earnings per share easily cover the income being paid out. That’s a green flag and highlights the sustainability of it.

It’s worth noting that the current dividend yield is 9.3%, with the stock down 1% in the last year. Sometimes, when I see yields above 9%, it’s because the share price has fallen sharply. This pushes up yield in the short run, but the dividend is usually cut due to problems. Yet for NewRiver, the share price has been stable. This could indicate that the yield can remain above 9% and isn’t flashing warning signs.

Debt worries

Still, there are risks. It has a loan-to-value (LTV) of 42.3%. This means that, on average, each £1 of project funding has 42p of debt contributing to it. Therefore, if high energy prices cause inflation to spike in the UK and interest rates rise, it could increase the financing costs for the firm. This would then act to lower profits, even though the company hasn’t done anything wrong.

Even with this concern, I still believe the REIT looks in good shape for income payments. I think it’s a stock for investors to consider.

The post I just discovered this REIT with a juicy 9% dividend yield appeared first on The Motley Fool UK.

Shares in companies that pay dividends are some of the best candidates for this. And investors might be surprised at what could be possible

Opportunities 

Right now the average cash savings account in the UK offers a return of around 2.5% a year. At that rate, it takes someone who puts aside £1,000 a month 37 years to make £1,500 a month.

Returns in the stock market are less certain, but the average return from the FTSE 100 over the last five years has been around 8%. That hasn’t all been dividends, but more on that later. 

At that rate, £1,000 a month turns into something generating £1,500 in monthly passive income after 10 years. And as well as being quicker, there’s something else that’s important. It doesn’t just take longer at a lower rate of return, you also have to put up more of your own money. At 2.5%, the amount you have to invest is £457,000, compared with £145,000 at 8%.

Dividend stocks

Some companies look to use their profits to generate future growth, while others return them to its owners (us) as dividends. And income investors naturally tend to prefer the latter.

It’s worth noting though, that there’s no free lunch for investors here. A firm retaining its cash naturally increases its intrinsic value in a way that paying it out to shareholders doesn’t. 

Over time, that creates upward pressure on the share price. The stock market isn’t always 100% efficient when it comes to pricing this in the short term, but it tends to show up sooner or later.

Nonetheless, companies that can keep generating cash and returning it to investors can be outstanding passive income investments. And there are even some offering 8% returns right now.

Real estate

NewRiver REIT‘s (LSE:NRR) a real estate investment trust that owns and manages a portfolio of retail properties. And the stock currently comes with an 8.25% dividend yield. 

In terms of risks, one thing to keep an eye on is the firm’s debt. A major refinancing is coming in the next few years and higher interest rates could put pressure on profit margins. 

Importantly though, most of NewRiver REIT’s rental contracts are linked to inflation. And that means they’re also likely to increase over time without the firm needing to do anything.

I’m therefore expecting long-term rent increases to offset a short-term increase in debt costs. On that basis, I think the stock’s well worth considering at a 21% discount to the firm’s net asset value.

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.

Out of favour

Everyone knows retail properties aren’t seeing the same kind of growth as data centres. But the downside is that data centre REITs like Equinix currently come with dividend yields below 3%.

That means they’re going to have to grow a lot to offset the difference between that and the 8.25% available from NewRiver. And that’s hard in a sector where cash is distributed, rather than retained.

The places to find the best returns are often where others aren’t looking. So I think building a diversified portfolio of stocks like NewRiver REIT might be the best way to earn passive income.

The post How much do you need to invest to earn £1,500 a month in passive income? appeared first on The Motley Fool UK.

But yields often rise for the wrong reasons. So before focusing on income, investors should aim to find out what’s driving it.

The real story behind the 9% yield

Over the past year, the NewRiver REIT (LSE: NRR) share price has struggled to build sustained momentum. While there have been short bursts of recovery, the stock has climbed just 2.7% in the last 12 months as concerns linger around UK retail property and borrowing costs.

The business appears to have stabilised. Occupancy has improved and management has been recycling weaker assets. For the year ending 31 March 2025, adjusted earnings per share were 6.3p.

Yet retail property remains a tricky area. Even though the REIT focuses on convenience-led locations, which tend to be more resilient than fashion-heavy shopping centres, tenants still face cost pressures. If retailers struggle, rental growth can stall.

Valuation

The company trades on a price-to-earnings (P/E) ratio of 11.3 as I write late on 17 February, which looks modest compared to the wider market. More strikingly, the shares change hands at a price-to-book (P/B) ratio just 0.6. In simple terms, the market values the company at a discount to the stated value of its property portfolio.

For income investors, the headline attraction is the near 9% dividend yield. That comfortably exceeds the FTSE 100 average, which sits closer to 3.5%.

That’s great from an income perspective, but it isn’t the whole story.

REITs come with tax advantages and are required to distribute at least 90% of their taxable income as dividends for shareholders. But high yields often signal perceived risk. Property companies typically carry debt, and higher interest rates increase financing costs. If borrowing remains expensive for longer, profit growth could stay under pressure.

There’s also the question of dividend cover. While earnings currently support the payout, there’s limited room for error if conditions worsen.

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.

So what’s the catch?

The catch is not necessarily that the dividend is unsafe. Rather, it’s that the business operates in a sector still rebuilding confidence.

If interest rates fall and consumer spending remains steady, retail-focused REITs could see valuations improve. A move closer to book value alone could lift the share price meaningfully. In that scenario, today’s yield may prove attractive in hindsight.

But if the economy weakens or retailers retrench, property values could come under renewed strain. In that case, the high yield may simply reflect the stock’s high risk profile.

For now, this REIT offers a compelling income stream backed by improving fundamentals, which could support further share price gains.

However, the clear trade-off between a generous dividend yield in exchange for exposure to a tough sector is one that needs closer evaluation from investors.

For now, the numbers justify investor consideration, but not complacency. That’s the real catch behind this 9% yield.

The post This 9% REIT yield looks tempting, but what’s the catch? appeared first on The Motley Fool UK.

On the mid-cap FTSE 250 or smaller AIM index, I tend to find higher yields on average. Yes, these require more careful consideration of the risks involved, but the pay-off can be lucrative.

Here are three high-yielding stocks worth looking at that have had a tough time since Covid. But now they not only offer lucrative income but exhibit signs of a potential recovery in the coming months.

Together, their average yield is 9.9% – almost three times that of the FTSE 100.

Reach

With an 11.5% yield, Reach (LSE: RCH) is the highest on my list. Usually, this would be a red flag – but I think this rare case is worth a closer look.

It’s backed by 11 years of uninterrupted payments and a low payout ratio of 46.4%. Cash coverage is a bit low at only 1.6 times but with earnings up 20% year-on-year, this might improve soon.

As a traditional publisher of newspapers and magazines, Reach has been stuggling to compete in an AI-driven world. As a result, profits took a big hit between 2021 and 2023, and the risk’s ongoing.

But more recently, things have improved, with its net margin rising from 3.78% in 2023 to 9.95% in 2024. If this trend continues, the recovery could deliver both growth and income for investors.

RWS Holdings

RWS Holdings (LSE: RWS) offers a very attractive 9.3% yield — still higher than what would usually be considered sustainable. In this case, there are some red flags. First, it’s unprofitable, posting a loss of £99.8m in its latest results.

Dividends are barely covered by cash (1.11 times) and payouts have declined 43.3% in the past year. So why do I think it’s still worth considering?

I see this one as a valuation play — with a forward price-to-earnings (P/E) ratio of 5.56, the growth potential’s compelling. Plus, it’s been paying dividends consistently and without fail for 22 years, which is encouraging. 

But the key point of interest for me is a strategic pivot towards an AI-driven SaaS model, which is already bringing in fresh revenue. FY2026 guidance outlines margin expansion and further investment in innovation and efficiency. It remains a risky play but if it works, the returns could be spectacular.

NewRiver REIT

NewRiver REIT‘s (LSE:NRR) a small but up-and-coming real estate investment trust (REIT) that focuses on retail and leisure properties. It has the lowest yield on the list at only 9% but benefits from regulations that ensure 90% of profits are returned to shareholders.

This is worth considering for retirement investors aiming for passive income, as it can be highly reliable. But still, the company must have sustainable earnings or it risks a dividend cut.

In NewRiver’s case, there are still risks but they look manageable. The UK property market faces headwinds from higher interest rates, increased taxation on landlords and high-value properties.

Revenue’s up 84% year-on-year and earnings 54% ahead — impressive numbers, especially considering the challenging economic conditions in 2025. Plus, the valuation looks decent, with a forward P/E of 9.2 and it has a 15-year track record of paying dividends.

The post 3 dividend shares to consider buying with an average yield of 9.9% appeared first on The Motley Fool UK.

The company leases and manages a portfolio of retail properties. And besides a high yield, there are a lot of reasons why the stock is worth a closer look at today’s prices. 

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.

Portfolio

NewRiver REIT’s portfolio is focused on retail parks and shopping centres. And the average overall occupancy rate is around 96%, which has increased from 95.3% last September.

The company also consistently collects around 97% of the rent that it’s due. That’s a strong result and it’s partly due to having a diversified base of high-quality tenants. 

On average, leases have just under six years until their first break and just over 10 years until they expire. That’s ok, without being spectacular, but it’s worth noting this has been increasing recently.

While UK retailers have been faltering recently, NewRiver is somewhat protected from this. It doesn’t need them to do well, it just needs them to keep paying their rent obligations.

Another encouraging sign is that the company has managed to increase some of its rents recently. That’s the result of supply in the industry being limited, which is another long-term advantage.

As a result of all of this, I don’t think there’s likely to be a problem with cash coming in for some time. The other thing investors need to look at, though, is cash going out.

Debt

REITs are required to distribute 90% of their taxable income to investors. But that means they can’t use the cash they generate for growth and they often have high debt levels as a result.

Even by these standards, NewRiver REIT has a relatively high loan-to-value ratio at the moment. And there’s a major debt refinancing on the way in 2028. 

This is the major risk with the stock at the moment. If the firm has to refinance at higher rates – which seems likely – higher interest costs could cut into profits and put pressure on that dividend.

Predicting where interest rates will be in 2028 is not at all straightforward. But it seems likely that they’ll be higher than they were 10 years ago, when the £300m bond was initially issued.

Once the debt is refinanced (at whatever rate) it should stay fixed for some time. And the company should be able to keep increasing rents to eventually offset the higher costs. 

A short-term hit wouldn’t be ideal and this is worth paying attention to. But investors should also focus on the firm’s trajectory after 2028, which I think could be much more positive.

Keeping things simple

Making things more complicated than they need to be is a big investing mistake. NewRiver REIT isn’t without risks, but at least it’s relatively easy to see what these might be.

On the other side of the equation, there are big potential rewards on offer. I expect the company to generate a 9% return for investors at least until 2028 and potentially over the longer term.

It’s never 100% clear what the best stocks to buy at any time are – if it was, investing would be a lot easier than it is. But I think NewRiver REIT is well worth considering for dividend investors.

The post 9% yield! Is this 1 of the UK’s best dividend stocks to buy in February? appeared first on The Motley Fool UK.

Often, high yields are unsustainable and end up leading investors into a dreaded ‘dividend trap’. Soon after purchase, the company slashes dividends and the investor’s left with a bag of worthless shares.

So when I see companies with yields of 8% or more, I first take a closer look. And it pays off because, on a few rare occasions, I find some that are actually worth considering. Here are two of them.

The up-and-coming REIT

NewRiver REIT (LSE:NRR) is a small (£307m) UK real estate investment trust that focuses on retail and community assets. Earnings are up 54% year-on-year, yet the shares still look cheap, trading on a forward price-to-earnings (P/E) ratio of just 8.9.

That suggests the market’s sceptical about the outlook for smaller property players, but the fundamentals are moving in the right direction.

For income seekers, its financial metrics are impressive: a meaty 9.2% dividend yield with a payout ratio of 97.2%. For most companies that would look dangerously high, but REITs are designed to distribute the bulk of their profits, so this isn’t unusual.

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.

Crucially, NewRiver’s paid dividends uninterrupted for 15 years and currently has enough cash to cover the payouts, which adds comfort.

The risk? The balance sheet’s a little stretched, with total debt exceeding equity. That doesn’t make it uninvestable, but it does mean investors should watch borrowing levels and refinancing costs carefully. If earnings continue to rise, a fresh injection of equity or asset sales could help de‑risk the capital structure.

Until then, this is a high‑yield stock to consider that could reward well for accepting some leverage and sector risk.

Income in the heart of the capital

City of London Investment Group (LSE: CLIG) is a global asset manager specialising in closed‑end funds. It offers an 8.55% yield, with a payout ratio of about 106.6%. On the face of it, that’s a bit stretched, but the company has a 12‑year uninterrupted dividend record and about 1.2 times cash coverage, which helps soften the concern.

Earnings are heading the right way, up 11.6% year-on-year, and the shares look sensibly priced, with a P/E growth (PEG) ratio around 1. That suggests the valuation roughly matches its growth prospects, rather than relying on heroic assumptions.

The balance sheet is another plus: a very low debt‑to‑equity ratio of 0.03 drastically reduces the risk of a debt‑driven dividend cut.

The main risk here is that performance is tied to global markets and investor sentiment. A sharp downturn would impact the company’s assets under management (AUM), hurting fee income and the share price in one go.

For that reason, it’s best considered as part of a diversified income basket rather than a lone selection.

A risk/reward balance

While both these stocks have lower dividend coverage than I’d usually consider sufficient, their track records and balance sheets add comfort.

Still, when talking about yields above 8%, there’s always a higher risk of cuts. Both could certainly give a nice boost to an income portfolio’s average yield, keeping in mind the importance of diversification.

The post Looking for income stocks to buy? Consider these 8%+ yielders! appeared first on The Motley Fool UK.

NewRiver REIT (LSE:NRR) shares currently come with a 9.71% dividend yield. And while there’s a clear risk on the horizon, there is a lot to like about the company.

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.

Business structure

NewRiver owns a portfolio of around 40 shopping centres and retail parks. It also manages another 39 similar properties through partnership arrangements.

In terms of some basic REIT fundamentals, the firm looks pretty good. Occupancy levels are around 95% and the firm collected 97% of its rent in the six months leading up to September.

The company also has a relatively diversified tenant base, with its largest tenant accounting for around 4% of total income. And the average lease doesn’t expire for another nine years. 

All of that looks pretty good from a reliable passive income perspective. But there is a risk on the horizon, which is why the stock is trading with such a big dividend yield.

Balance sheet

The issue is debt. NewRiver’s loans reach maturity in the next couple of years and refinancing these is likely to result in higher interest expenses than the current 3.5% average cost of debt.

This is a risk investors need to think about, especially if they’re focused on the dividend. The question isn’t really whether this will affect profits, it’s how much it will affect them.

Even with interest rates falling, refinancing is likely to mean lower profits over the next few years. If the firm’s cost of debt rises to 6%, the increase will likely be around £10m annually. 

NewRiver’s pre-tax income is around £32m, so a £10m increase is clearly significant. But the company does have some key strengths that can help limit the overall effect. 

Capital allocation

NewRiver is in the process of selling off some of its weaker properties to generate cash. And some of this has been used to strengthen the firm’s balance sheet.

Combined with strong occupancy and collection metrics, this should help limit borrowing cost increases. But this isn’t the only thing the company has been using its cash for.

NewRiver has also been buying back its own shares. And with the stock trading at a 30% discount to the firm’s net asset value per share, this looks like a good move. 

It’s also a strong sign the company’s management is confident about the balance sheet. In other words, the risk of higher costs is real, but it doesn’t look like an existential threat.

Investment equation

There’s a lot to like about NewRiver REIT from an investment perspective. Retail isn’t the most dynamic growth industry, but the firm has a diversified mix of reliable tenants. 

Investors need to take a look at the upcoming debt maturities. But the company is making moves to strengthen its balance sheet, which might go some way towards offsetting this risk. 

With a dividend yield close to 10%, passive income investors might well think there’s an opportunity worth considering here. And my view is they’d be right to do so.

The post Why this 9.71% dividend yield might be a rare passive income opportunity appeared first on The Motley Fool UK.

But what if there’s a different way? What I’m looking for is high earnings growth and a share price that hasn’t yet caught up.  And I’m not just checking earnings growth. If a company’s forward price-to-earnings (P/E) ratio’s too high, it may be a sign that analysts feel the earnings are already priced in. 

So I want to find the hidden gems – companies banking high profits but still flying under the radar. With this in mind, I’ve identified two underappreciated FTSE shares with low valuations that still need to catch up with their recent earnings.

NewRiver REIT

First up, let’s check out NewRiver REIT (LSE: NRR). It’s a real estate investment trust (REIT) that buys and develops community-focused retail and leisure assets. Think pubs, shopping centres, retail warehouses, and high street stores. It’s a business model that’s been through the wringer, what with the pandemic and all, but it seems to have staged a pretty impressive comeback.

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 numbers tell a compelling story. Earnings soared from £3m in 2023 to £23.7m in 2024. That’s a huge leap, and it’s a testament to the business’s recovery. The company’s revenue is also estimated to reach £82.85m this year, up from £56.2m last year. What’s more, its forward P/E ratio’s a low 8.6, suggesting the price has yet to reflect the company’s improved profitability.

Analysts seem to agree — the 12-month price target for the stock envisions a 29.3% rise from its current level.

However, an investor must weigh up the risks. The property sector’s highly sensitive to economic conditions, and a downturn could send the stock back down again. If inflation remains high, it may struggle to make gains as borrowing costs increase. 

But what really swung the scales for me is the 9.12% dividend yield. For that reason, I think it’s a share worth considering for income investors.

Mitchells & Butlers

Next on my list is Mitchells & Butlers (LSE: MAB). This is a big name in the UK’s pub and restaurant scene, operating a managed portfolio of popular brands including Toby Carvery, Harvester and All Bar One across the UK and Germany.

This July, it posted a 5% rise in third-quarter like for like sales, a solid sign of continued demand. And in the past 12 months, the company’s earnings increased by 276% compared to the same period a year ago, showing a remarkable financial turnaround. 

On top of that, it’s got a healthy balance sheet, with its total equity almost double its debt, which gives me some comfort. Like NewRiver, its forward P/E ratio is low at 9, which suggests the price has lots of room to grow if it can maintain this trajectory.

Risks to consider? Always. While the top line’s impressive, Mitchells & Butlers’ net margins remain thin. The share price is down 6% in the past three months, so it must keep up its profitability. And it could slip if upcoming results disappoint. 

Still, based on the low valuation and strong recent performance, I think it’s a promising FTSE share for value investors to check out.

The post 2 under-the-radar FTSE shares that have enjoyed spectacular earnings growth in the past year appeared first on The Motley Fool UK.

At today’s prices, the stock comes with a 9.25% dividend yield. So should I take the opportunity to add it to my Stocks and Shares ISA?

Overview

NewRiver REIT leases a portfolio of 47 shopping centres and 30 retail parks around the UK. Some of these it owns outright and others it manages on behalf of other partners.

High street retail has been struggling recently with consumers under pressure and the rise of e-commerce. And that’s something to pay attention to over the long term with the company. 

What matters most for NewRiver REIT, though, is that it can find tenants and get them to pay rent. And both its occupancy levels (96%) and rent collection metrics (98%) are solid.

The firm’s tenant base is also reasonably well-diversified, including the likes of Boots, Superdrug, and Aldi. In other words, a focus on convenience helps protect it from online competition.

Valuation

The stock currently trades at around 70p, which is a 31% discount to the £1.02 value of its net tangible assets. This isn’t uncommon for UK REITs, but it’s particularly important in this case. 

Unless a company is about to do something about it, a valuation gap doesn’t usually matter much for investors. But NewRiver REIT has recently repurchased around 48m shares at around 75p.

Buying back stock when it trades at a discount increases the NAV per share of the remaining shares. In other words, it creates value for shareholders. 

In my view, the move is a very positive one for investors. It shows management is willing to take advantage of opportunities when they present themselves and this is very positive.

Dividend cover

The 9% dividend yield NewRiver shares come with is eye-catching to say the least and this can often be a sign of risk. And there’s one obvious one that stands out. 

In terms of debt, the firm’s loan-to-value ratio is now 43%. That’s almost double the 22% level of a year ago as a result of the recent acquisition of Capital & Regional and this warrants a closer look. 

A higher debt level is always a risk. But it’s worth noting that NewRiver doesn’t have any loans due to mature until 2027 and this means the prospect of falling interest rates could be a big boost. 

The firm distributes 80% of its underlying funds from operations. And with leases having over eight years to run on average, I think the dividend looks solid for the foreseeable future.

A passive income opportunity?

NewRiver REIT has been seeing strong consumer footfall in its properties, which goes against the recent weakness on the UK high street. And I can’t help but think that’s the big risk with the stock.

A number of retail stocks have been struggling recently due to disappointing sales growth. But to some extent, this doesn’t matter to the landlord as long as the rent gets paid each month.

Given this, I think NewRiver is worth considering as part of a diversified portfolio. I’m adding it to my list of REITs that I’m keeping a close eye on.

The post A 9.25% yield and a 31% discount to NAV, is it time for me to buy shares in this passive income machine? appeared first on The Motley Fool UK.