Tired of the hassle of being a landlord? Fed up with chasing tenants and dealing with leaky roofs? Well, an expert at Motley Fool is highlighting a way to earn a steady income without the headaches of bricks and mortar. It’s called Greencoat UK Wind (LSE: UKW), and it’s a real estate investment trust (REIT) that’s paying out a whopping 7.3% dividend!
Ditch the Rent, Embrace the Wind!
REITs are like shares you can buy and sell on the stock market. They invest in properties, but instead of you being the landlord, the REIT manages everything. Greencoat isn’t interested in your average terraced house, though. This company owns wind farms! It’s the biggest publicly traded wind farm owner in the UK, and they’re making a fortune from clean energy.
Their wind turbines generate electricity, which is sold to the national grid, just like a regular rent. This steady income stream is what funds their generous dividend. And here’s the best part: the demand for clean energy is only going to grow! As electric cars and homes become more popular, the need for wind power will soar.
A Dividend King in the Making?
Greencoat isn’t just sitting back and enjoying the windfall. They’re reinvesting their profits to build even more wind farms. This means their income is constantly growing, and so is their dividend. Over the past nine years, their dividend has climbed by an average of 8.7% every year! That’s almost double the rate of inflation, so your income keeps getting bigger and bigger.
Every Investment Has Risks, Even Wind Power
Like any good investment, Greencoat does have its downsides. They are subject to energy regulations, and electricity prices can fluctuate. This means that in times of lower electricity prices, their profits, and potentially their dividend, might take a hit.
However, Greencoat has a proven track record of weathering these storms. They have a solid business model, and their wind farms are generally low maintenance, meaning they have relatively low costs. The fact that their operating margin was 95% in 2022 shows how profitable they can be, even in tough times.
A Strong Wind in Your Pocket
So, are you ready to ditch the stress of buy-to-let and embrace the power of wind energy? Greencoat UK Wind is a reliable and high-yielding investment that could be the perfect way to boost your income. Just remember, like all investments, it does come with risk. However, with their strong track record and the growing demand for clean energy, Greencoat is a company worth keeping your eye on!