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To me, the best way to make a lot of passive income is to buy dividend stocks. Equity prices continue to converge, which means equity gains are going in the opposite direction. However there are still many scary high yielding companies to choose from.
But what if you want double-digit dividend yields? No problem. Take the following three stocks: Renewable Infrastructure Group (LSE: TRIG), Octopus Renewables Infrastructure Trust (LSE:ORIT), and JPMorgan Nasdaq Equity Premium Income ETF (LSE:JEPQ). Each has a past dividend yield of more than 10%, and a long track record of paying cash prizes that outperform the market.
And I am sure that they can continue to bring good income to the investors. Want to know why?
Tech titan
Exchange-traded funds (ETFs) can be a great way to get income. These can hold a wide range of assets, help protect shareholders from individual shocks and provide smooth returns.
The JPMorgan Nasdaq Equity Premium Income ETF – with a dividend yield of 10.8% – is one such diversified fund to consider. It’s catching up Nasdaq 100 US tech stocks selling covered calls. When out-of-the-money call options are sold, the proceeds are paid to investors in dividends.
It is a very complicated way to make money in the stock market. Focusing on growth stocks means that the fund may fall sharply during a recession. But over time, the ETF has proven to be a dividend generator and I expect it to continue to perform very well.
Renewable energy giant
Investment trusts focused on renewable energy are another top source of income to consider. That’s because interest rate pressures and concerns about a slower-than-expected greenback have pushed prices lower, making interest rates more expensive.
Octopus Renewables Infrastructure Trust paid a dividend of 10.5 %. Could it go up in value soon? I think so, with the Bank of England’s continued interest rate cuts.
There’s a lot I like about the trust from a dividend perspective. Like other power producers, its operations are highly defensive and provide stable cash flow that can be returned to shareholders. I also like its wide, wide European footprint – this doesn’t eliminate the threat of weather-related disruptions, but it does reduce the risk as the region’s calm conditions have little impact on overall energy production.
The income I have
Renewables Infrastructure Group is a renewable energy stock that I bought for my portfolio. And with a forward yield of 10.7%, it’s one that I think investors should consider.
Why did I get this particular operator, you ask? With more than 80 products in its portfolio, it has an even wider line of defense against independent performance issues. These are also spread across Europe, but not limited to that – its portfolio includes onshore and offshore wind farms, solar projects, and battery storage equipment, meaning it is also well diversified in terms of technology.
Low electricity prices have been a recent problem. I hope, however, that it will remain a strong income generator and that the share price will rise following the recent weakness.
