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Leaving money on a high -interest savings account can be a good option for investors, taking into account capital protection. However, dividend reserves can offer much higher yields to compensate for a higher level of risk. The skill was found when making decisions which actions are worth the risk. Here are two that I think is worth considering.
Renewable energy spark
First Bluefield Solar Income Fund (LSE: BSiF). Over the past year, shares have dropped by 9%, and the current dividend performance was 9.12%.
The British investment company focuses on generating long -term income for investors by investing in renewable energy resources, primarily solar energy installations. He is the owner and runs the Portfolio of Solar Farms, generating money through the sale of electricity, as well as using government subsidies and subsidies.
He has powerful achievements in the field of income payment, doing so in a regular quarterly period for over a decade. The business model corresponds to it well, considering that the contracts for the supply of electricity it has, offer predictable cash flows. In the fleeting results of February, the dividend cover was 1.5. This means that current earnings can easily cover dividend payments and the funds remain. It bodes well for the future.
Of course, one risk is electricity price fluctuations. It is goods, like oil and gold, so demand and supply can cause high price movements. If energy prices drop significantly, this will negatively affect revenues.
Financing of mainstream projects
The second option is Investments of GCP infrastructure (LSE: GCP), which currently has a very generous capacity of 9.75%. This is much above the basic basic rate in the UK of 4.5%.
Last year, shares fell by 4%, and trades with a high 31% discount on the value of net assets (NAV). This applies to the value of assets within the fund, compared to the price of shares. In the long run, these two numbers should compare, but there may be differences in the tiny term. The fact that the price of shares is below NAV may indicate that the company is underestimated.
As part of the Fund, it generates income by granting loans to entities involved in infrastructure projects in Great Britain. These loans are usually protected against cash flows supported by the British public sector, such as payments from government departments, local authorities or NHS trusts. As a result, I believe that dividend payments are relatively secure, taking into account the reliability of debtors.
The risk that some may mean is that ensuring any form of loan means that there is a potential for failure to perform the obligation. Given the size of some projects, even one by default can significantly affect the company’s operation.
Due to the dividend profitability of 9%+ I think that both shares fairly compensate for the investor’s risk. Therefore, investors who are considering adding income to their portfolio may want to take into account the inclusion of these two.