Dividend shares are well represented within my portfolio. These stocks provide me with a regular income in the form of dividend payments. However, it’s worth remembering that dividends are by no means guaranteed.
But I’m always on the lookout for top-quality dividend stocks to add to my portfolio. And despite the market pushing upwards in recent months, I still see plenty of opportunity to buy attractively priced stocks with sizeable dividend yields.
So, let’s take a close look at two dividend shares I’m buying before February ends.
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Green energy
There are several green energy stocks offering strong dividend yields. I recently added Greencoat UK Wind to my portfolio, and I’ve been looking carefully at The Renewables Infrastructure Group.
However, the company I’m buying before the end of the month is NextSolar Energy Fund (LSE:NESF) — a solar-focused trust based in London. The portfolio is comprised of 99 solar assets — the majority of which are in the UK.
The trust also has small co-investments in private funds and joint venture partnerships in battery storage. Meanwhile, the energy generation is de-risked through fixed agreements on 83% of production for the next three years.
The dividend yield currently stands at an attractive 6.5% while City brokers expect dividends to continue moving northwards. Forecasts are for payouts of 7.52p and 8.36p in 2023 and 2024, up from 7.17p this year.
High pricing power results in a forward dividend coverage of 1.3-1.5. That should be fairly stable, although a coverage ratio closer to two would be healthier. I’m not sure whether income and therefore the coverage ratio have been adversely impacted by the energy generator levy. Time will tell.
The trust does have a diversified portfolio, but the majority of assets are based in the UK. Modern solar panels work reasonably well in cloudy weather, even though the light on cloudy days isn’t as strong. Actually, rain can even help power generation by washing away dust and dirt.
However, it’s true that sunny days ar emost effective. As such, power generation isn’t necessarily aligned with demand. This is a challenge for the renewables industry, but hopefully one that battery technology will overcome.
Despite this, I’m buying NextEnergy Solar this month.
Investment leader
Hargreaves Lansdown (LSE:HL) is the leading investment platform operator in the UK. The firm surged during the pandemic as thousands turned to retail investing after lockdowns hit.
However, Hargreaves has struggled to maintain that growth, primarily because the economy has reopened and people have more things to do with their time. But we can also assume that the cost-of-living crisis has reduced income for investment purposes. It’s worth noting that the economic climate for 2023 remains challenging.
Despite this, there are two reasons why I’m buying more Hargreaves stock. Firstly, the Bristol-based firm is set to make £200m throughout the year as a result of higher interest rates — that equates to around 30% of revenue in 2021. This near-term boost should mitigate possible falling investor dealings.
In the long run, I see more and more Britons taking control of their finances. And the Hargreaves supermarket investment platform is the market leader for a reason. I’m anticipating growth to continue in the years to come.
