I’m searching for the best dividend stocks to buy to boost my passive income over the next decade. Here are a couple I think could be too cheap to miss.
NextEnergy Solar Fund
Investor interest in renewable energy stocks like NextEnergy Solar Fund (LSE: NESF) is accelerating sharply. This particular green share’s share price has exploded since its IPO in 2014 and just hit new record highs.
It’s not a mystery as to why they are becoming so beloved. Demand for clean energy is soaring as the fight against climate change intensifies. NextEnergy Solar owns around 100 assets that generate energy using the power of the sun.
The majority of these are located in the UK with a small number situated in Italy. And the business is expanding rapidly to maximise its position in this growing market. Its total installed capacity rose to 865MW from 814MW a year earlier.
|Share Price||116p per share|
|Price movement in 2022||+13%|
|Price-to-earnings (P/E) ratio||9.7 times|
|Dividend cover||1.6 times|
The trouble with investing in renewable energy stocks is that energy production can be intermittent. In other words, they can stop producing electricity during adverse weather conditions, causing a negative impact on profits.
But all things considered I think NextEnergy Solar’s a great buy for long-term passive income. Solar energy demand is tipped to explode over the next decade (S&P Global analysts think solar and wind capacity will soar 47% in the decade to 2030).
What’s more, NextEnergy Solar’s essential operations mean that profits will remain stable even during downturns. This means it should have the financial strength to pay big dividends at all points of the economic cycle.
The Banco Santander (LSE: BNC) share price meanwhile has slumped sharply in 2022. It’s a fall that reflects its highly cyclical operations and the prospect of profits crashing as the global economy cools.
Santander’s share price has been especially weak over the summer too. This is because of severe commodity price falls and the economic strain this will cause in Brazil. This is comfortably the bank’s single largest market by profits and customer numbers.
|Price movement in 2022||-17%|
|Price-to-earnings (P/E) ratio||4 times|
|Dividend cover||3.4 times|
Yet despite these issues, I’m hugely tempted by the bank’s excellent all-round value. In particular I think its 7.3% dividend yield makes it a terrific way to boost my passive income. Santander’s strong dividend cover suggests it’s in great shape to make the full dividend payment that brokers are expecting.
I’m also consider Santander as a great way to boost my exposure to emerging markets. The bank’s broad geographic footprint — spanning The Americas and Europe — gives it extra resilience through diversification. And it provides access to the fast-growing Latin American region where product penetration is low and wealth levels are tipped to grow strongly.
Santander currently generates around 31% of underlying profits from Latin customers.
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Royston Wild has no position in any of the 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.