Three stocks from the FTSE 250 I’d happily buy for a retirement portfolio are Primary Health Properties (LSE: PHP), Close Brothers (LSE: CBG) and NextEnergy Solar (LSE: NESF). Let me explain why I believe these stocks are highly attractive for income seekers.

Clean bill of health

Primary Health Properties (£1.5bn market cap) has increased its dividend each and every year for the last 22 years. This is a superb record, and actually puts many FTSE 100 companies to shame.

The group owns primary health facilities in the UK and Republic of Ireland. The majority are GP surgeries, with other properties let to NHS organisations, pharmacies and dentists. Long-term leases, most income backed by government, and high occupancy rates are features of the business. These features go a long way to explaining why PHP has been able to build such an impressive dividend record, and why it has every prospect of continuing to deliver a reliable rising income in the future.

The company pays dividends quarterly, in February, May, August and November. At a share price of 131p, with the next four payouts forecast to total 5.7p, the prospective first-year yield is 4.35%.

A bank to bank on

Close Brothers (£1.9bn market cap) is a leading UK merchant bank. It has built a well-deserved reputation as a prudently-managed business. Notably, it was able to maintain its dividend through the financial crisis when other banks were slashing or suspending their payouts.

The firm’s record makes it one of the few banks I’d be happy to buy and hold for income at any point in the economic cycle. Indeed, its dividend yield is particularly attractive at the present time, due to Brexit worry weakness in shares across the banking sector.

Close Brothers pays an interim dividend in April and a final dividend in November, the final one generally being around double the interim. I’ve cautiously pencilled in 43p for the next final and 22p for the following interim. At a share price of 1,257p, the 65p total gives investors a prospective first-year yield of 5.17%.

Sunny money

Investing in renewable energy infrastructure has moved into the mainstream in recent years. Widespread public and political support for a cleaner future, and technological advances, have made this an attractive area to invest in. NextEnergy Solar (£700m market cap) is an investment company that meets this demand.

It joined the stock market in 2014, and has built up a portfolio of 87 solar power plants on agricultural, industrial and commercial sites. The majority are in the UK, but it’s also acquired eight in Italy. Its aim is to increase its annual dividend by UK RPI inflation, and it’s done this each year since its flotation.

Dividends are paid quarterly in September, December, March and June. The board is targeting a payout of 6.87p for the upcoming four quarters, giving investors today, at a share price of 120.5p, a prospective first-year yield of 5.7%.

In my opinion, Primary Health, Close and NextEnergy are worthy candidates for inclusion in a diverse portfolio of income stocks. The average yield of the three is just over 5%.

The post 3 FTSE 250 dividend stocks I think are ideal for retirees appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. 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.

Wind in spades 

Greencoat owns a portfolio of domestic wind farms that stretch from Caithness in the north to Kent all the way down south. As of this morning’s full-year results announcement, the group has been public and operating for five years, delivering a total shareholder return of 58.3% in that timescale. While this return is less than that of the FTSE 250 index its a member of, conservative shareholders after a hearty dividend and less volatility are unlikely to be complaining. 

Looking forward, the trust does trade at a 10% premium to its net asset value (NAV), which is already falling and may shrink further in the short term as bond yields rise and income investors flock to these safer assets. However, it’s likely that the group will continue to trade at some sort of premium as the fund’s manager has proven very willing to not only deliver hefty dividends but also grow the portfolio through acquisitions. 

Last year, the group raised £340m in a right issue and used this cash, plus £165m drawn down on its debt facilities, to buy £507m worth of wind farms. That added 273.3 net megawatts (MW) of energy generation, bringing the group’s year-end total to 694MW. During the year these assets generated net cash of £80m that more than covered £52.3m paid out in dividends. And as the costs of wind power continue to fall while nearing a time when they no longer require government subsidies, the outlook for Greencoat UK Wind looks quite bright to me. 

Basking shareholders

Although the idea of solar power in the UK is an easy target for cheap jokes, NextEnergy Solar Fund is showing that it’s farms receive more than enough sun to power big dividends for shareholders. At the end of December the group had 63 plants with an installed capacity of 569MW, including eight recently-purchased farms in Italy. 

And just as is happening with UK wind power prices, solar farms are becoming cheaper and cheaper over time, bringing down the acquisition costs for NESF, which only purchases operational farms. And the group’s manager is proving adept at wringing efficiencies out of its plants as they produced 2% more energy than budgeted in the half-year to September. 

This helped generate enough cash to cover the company’s generous dividend 1.14 times over. The fund continues to grow through acquisition, so with cash flow rising over time dividend payouts should quite safely continue to grow in line with inflation. Furthermore, with its shares trading at only a 6.5% premium to their NAV, NESF isn’t ridiculously overpriced for a high-income option in a low-income world. 

The post 2 top UK green energy investment trusts yielding over 5% appeared first on The Twelfth Magpie.

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With physically-backed assets, generally reliable income streams and plenty of government support should anything go wrong, it’s easily understandable why sovereign wealth funds and private equity firms have fallen head-over-heels in love with investing in infrastructure. Thankfully, you don’t need to be ultra wealthy to invest in these projects through publicly listed, high-yielding, closed-ended funds such as NextEnergy Solar Fund (LSE: NESF) and GCP Infrastructure Investments (LSE: GCP).

Powering up for a bright future

As its name suggest, NextEnergy Solar Fund invests in solar energy plants across the UK. The fund seeks to offer a healthy dividend that rises in line with inflation by returning income from electricity sold. In the year to March the fund paid out a 5.49% yielding 6.31p dividend that was covered 1.2 times by cash income and is targeting a 6.42p dividend next year given currently predicted inflation levels.

On top of a very impressive dividend yield, the fund also offers fairly good capital appreciation prospects over the long term. This growth comes from reinvesting excess cash in new plants, as well as semi-frequent capital calls when the fund manager sees attractively priced assets for sale or believes they can expand existing sites.

The latest placing took place post-year-end in early June and raised £126.5m by issuing 115m new shares at 110p each. Together with the £100m of cash on hand prior to this share placement, the fund is moving forward with plans to purchase existing plants and build new ones for a total of around £250m.

The future for these projects is looking increasingly bright as operating costs and the price of solar panels continue to fall fast enough that the fund manager reckons its plants will be profitable, even without government subsidies within the next 12-24 months.

With the increased focus on renewable energy generation, plenty of growth opportunities and a very impressive dividend, I reckon NextEnergy Solar Fund shares could be a great income option despite trading at roughly a 10% premium to their net asset value (NAV).

A less sun-dependent option 

The GCP Infrastructure Investments fund is a more diversified option that also offers investors a very nice dividend that currently yields 5.92%. This fund invests in the debt of everything from wind farms in Northern Ireland to schools in Scotland and healthcare centres in Norfolk.

The income and principal from the long-term debt issuances it invests in are generally backed by public sector funds and are diversified enough so that no single project accounts for more than 10% of the fund’s NAV.

In addition to the steady dividend that is paid out from these proceeds, the fund also offers the prospect of capital gains through reinvesting principal repayments, as well as raising cash from investors from time to time. The latest rights issue raised £90m, which together with existing cash reserves and debt facilities allowed for the purchase of £74m of new loans, as well as striking an agreement to buy £140m of debt from the government’s privatisation of the Green Investment Bank.

This sale makes clear that the government and investors, for better or worse, both see private investment in infrastructure as the way forward. Given this political climate, plus its diversified portfolio of debt and great dividend, the GCP Infrastructure Fund is worth a closer look even at a 17% premium to its NAV.

The post Why I’d buy these 5%-yielding infrastructure stocks appeared first on The Twelfth Magpie.

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Ian Pierce 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.