But there are only a handful of ways investors can play this trend right now, and one of those is the Greencoat Renewables (LSE: GRP).

Wind dividends

This business owns and operates wind farms across Ireland. In total, Greencoat has full ownership of nine wind farms and stakes in a further four.

Today it announced that it is expanding this portfolio with the acquisition of Gortahile wind farm in County Laois, Ireland. This 20-megawatt wind farm was commissioned in August 2010 and has a guaranteed minimum price floor on the electricity it generates.

Finding assets that have a minimum price floor has been a critical component of Greencoat’s strategy. This minimises the risk for the company and its investors.

In the first six months of the year, the firm generated €27.1m in net cash, to be returned to investors and reinvested back into growth.

Based on current City forecasts, shares in the renewable energy business are set to support a dividend yield of 5.2% this year. They trade at a forward P/E of 11.4, which isn’t too demanding for a company with a virtually guaranteed minimum income stream and market-beating dividend yield.

UK focus

Another play on renewable energy in the UK is Greencoat Wind (LSE: UKW). This is the UK-focused version of Greencoat Renewables. The business owns a range of wind farms across the UK with a total net asset value of £2.4bn at the end of its most recently reported financial period.

Management has been steadily growing the portfolio ever since Greencoat’s IPO in 2013. Through a combination of borrowing and the issue of new shares, the company’s book value has increased by more than 440% since its listing.

As the number of assets owned by Greencoat has grown, so has the company’s income from these assets. In 2013, the group reported a net profit of just £18.2m. City analysts are forecasting total income of £107m for the firm this year.

Greencoat went public intending to produce a steady income for its investors growing at a rate equal or above the rate of inflation over the long term. So far, it has accomplished this objective. The dividend has risen at an average annual rate of around 2% since 2014. At the time of writing, the stock supports a dividend yield of just under 5% and the payout is covered 1.3 times by earnings per share, so it looks as if it is fairly safe for the time being.

On top of this, because Greencoat has historically used placings to raise cash rather than borrowing, debt is relatively low at just 31% of assets on a net basis.

So overall, if you are looking for an income investment that is not threatened by climate change, and is helping to make the world a better place, then I recommend taking a closer look at these two renewable energy stocks.

The post Looking for renewable energy stocks? I’d consider these two income investments appeared first on The Twelfth Magpie.

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• 10.1% and 9.8% dividend yields! Should I buy these cheap FTSE income stocks?
• These 3 shares could deliver a £1,840 second income in an ISA overnight!

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Greencoat UK Wind. 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.

Income funds offer a diverse stream of income with an instantly diversified portfolio, so you don’t have to worry about the financial health of every company you own.

Today I’m looking at two such funds. Both of them own a collection of renewable energy assets, which are producing a steady stream of income, which I feel means they are the perfect funds to hold in a retirement portfolio.

Solar income

The first one is the Foresight Solar Fund (LSE: FSFL). After recently completing a deal to acquire 15 UK solar assets, with a total installed capacity of 114mw, for £47m, Foresight is now reportedly the “largest UK-listed dedicated solar energy investment company by installed capacity.“

The fund’s assets are not just limited to the UK. In the first half of 2018, the first of Foresight’s Australian assets successfully connected to the country’s electricity grid. Australia is now a key market for the group as the region tries to reduce carbon emissions by 26% by 2030. At its current trajectory, it looks as if Australia will beat this target.

But Australia isn’t the only country using solar energy to reduce carbon emissions. 

Global installed solar capacity increased 30% last year surpassing most forecasts. Indeed, most solar market forecasters were predicting little-if-no-growth after the market expanded 50% in 2016. With the solar market booming, Foresight has plenty of options to expand its asset base. 

According to its first-half results release, the company is currently conducting due diligence on 300mw of potential investments in the UK and Western Europe.

Its management is targeting an annual dividend distribution of 6.6p per share paid on a quarterly basis. Management is also planning a yearly RPI-linked uplift in the distribution depending on market conditions. At the current share price, this implies a dividend yield of 5.9%.

Wind power 

Another fund that is trying to capitalise on the rising demand for renewable energy is Greencoat Wind (LSE: UKW).

Greencoat, as its name suggests, is a green energy fund focused on wind power assets. Like solar, wind energy assets are attracting plenty of attention from investors who are looking to capitalise on the shift away from fossil fuels towards renewable energy. According to the Financial Times, last year investors ploughed $4.7bn into wind projects across the UK, up to 200% year-on-year.

The high demand for wind assets can be seen in Greencoat’s stock price. Shares in the firm are trading a premium of 10% to net asset value of 114p. 

Still, despite the small premium, Greencoat’s dividend potential remains attractive. Analysts have pencilled in a dividend yield of 5.5% for the full year, based on last year’s distribution and an inflation-linked uplift of approximately 4%.

Greencoat has already spent £277m increasing the size of its portfolio so far in 2018 and is weighing up multiple other opportunities. This growth gives me confidence that the dividend distribution is sustainable.

Overall, it looks to me as if it is an excellent addition to any retirement portfolio.

The post These 2 top 6%-yielding income funds could boost your pension income appeared first on The Twelfth Magpie.

More reading

• Are these the best UK shares to buy for passive income right now?
• 10% dividend yields! 3 dirt cheap stocks to consider in June?
• 10.1% and 9.8% dividend yields! Should I buy these cheap FTSE income stocks?
• These 3 shares could deliver a £1,840 second income in an ISA overnight!

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

However, to be able to achieve the best returns from infrastructure, you need to do your research and choose the right company or fund for the job.

Top pick

GCP Infrastructure Investments (LSE: GCP) is one example of a top pick. GCP is the only UK-listed fund of this type focused primarily on investments in UK infrastructure debt. Debt is usually tied to infrastructure projects, which are already producing strong cash flows backed by both the public and private sectors. 

This strategy might seem risky, but it has produced surprisingly stable returns for investors over the years. Over the past five years, shares in GCP have returned 23% excluding dividends. Including dividends, which currently amount to around 1.9p per quarter, the shares have produced a total return of 77% over the period and around 12.3% per annum. 

Granted, these returns won’t turn you into a millionaire overnight, but the GCP is not designed to be the next high-growth stock. Instead, the shares are designed to produce stable returns you can count on.

City analysts expect GCP’s steady growth to continue for the years ahead. Analysts have pencilled-in earnings per share growth of 1% per annum to the end of 2018. Most of GCP’s earnings will be returned to investors via dividends. Analysts expect the company to pay 7.6p per share in dividends for the next two years, which equates to a dividend yield of 5.7% at current prices. The payout is covered 1.2 times by earnings per share, and the shares currently trade at a forward P/E of 14.6, which may seem expensive but GCP should be valued on its income, not earnings. The shares currently trade at a slight premium to GCP’s net asset value of 110.3p per share.

Income from wind

Like GCP, Greencoat UK Wind (LSE: UKW) is another slow and steady infrastructure investment you can rely on to produce a regular return for your portfolio. 

Greencoat invests in wind farms around the UK and since coming to the market at the beginning of 2013, the shares have produced a total return for investors of 48% or 11% per annum. Over the past few years, it has expanded by acquiring new windfarms and this growth should support further dividend expansion in the years ahead. Indeed, since year-end 2013, its pre-tax profit has expanded from £18.2m to an expected £91.2m for the year ending 31 December 2017. Over the same period, the per-share dividend payout is expected to grow by 2p from 4.5p to 6.5p. Earnings per share are on track to expand from 6.9p to 11.5p. 

At the time of writing shares in Greencoat support a dividend yield of 5.2% and the payout is covered 1.7 times by earnings per share, leaving plenty of room for manoeuvre if things don’t go to plan. Based on current City expectations, the shares will yield 5.4% next year and currently trade at a slight premium to net asset value of 109.8p at the end of March.  

The post 2 FTSE 250 infrastructure bargains for under £2 appeared first on The Twelfth Magpie.

More reading

• Are these the best UK shares to buy for passive income right now?
• 10% dividend yields! 3 dirt cheap stocks to consider in June?
• 10.1% and 9.8% dividend yields! Should I buy these cheap FTSE income stocks?
• These 3 shares could deliver a £1,840 second income in an ISA overnight!

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.