Investment Trust Dividends
With most of the dividends for February declared the income figure should be around £1,659.00.
That should provide income for re-investment for the current year of £3,327.00.
Do not scale to reach a year end figure as March is a poor month for dividend harvesting for the SNOWBALL.
Investing Group Leader Rida Morwa
Co-authored with Hidden Opportunities
Flexibility always comes at a price. If you cancel your appointment with a doctor or dentist without providing 24–48 hours’ notice, you will be charged a fee. Life happens, but the policies are firm. Yet, when the doctor or dentist cancels on you with little notice, you are not compensated for your time.
The same dynamic exists in travel. In the post-pandemic era, airlines have monetized flexibility by turning it into a product. If you want to cancel or rebook your flight, you must pay extra for that privilege. If you want to choose your seat, or board early, that costs extra too. The aircraft or travel durations haven’t changed, but pricing has. As a traveler, you pay a premium for flexibility and convenience.
From subscriptions, services, and travel, and everywhere in life, you pay for the privilege of keeping your options open. The financial markets are one of the rare exceptions. Here, the market pays you for providing flexibility to others – through capital, timing, and liquidity.
Every time a consumer makes a purchase that they couldn’t upfront in cash, or delays a payment, and every time a business borrows to expand or manage working capital, they are using flexibility. The two investments discussed in this article let you collect generous dividends from companies that enable that flexibility.
Let’s dive in!
That local restaurant you love visiting is opening a new location at the other end of town. How do you think they secure the capital to pursue this business expansion? Unlike large public companies, they can’t issue more shares or debt, nor are they flashy enough for a VC (Venture Capital) to step in. Yet, they provide a service that hundreds, if not thousands, relish.
Born from the Small Business Investment Incentive Act of 1980, BDCs (Business Development Companies) are designed to support small and developing U.S. companies. According to The National Center For The Middle Market, there are over 200,000 middle-market businesses in the U.S., employing over 48 million people, representing one-third of the private sector GDP. This category represents the pulse of the American Dream.
BDCs themselves have different focus areas, with larger ones primarily pursuing first-line senior secured loans, while smaller players concentrating on niches like asset-based lending, equipment financing, life sciences loans, or venture growth financing. They provide capital in different forms to their borrowers, and collect interest payments at rates often in the +10% ranges, regardless of the interest rate landscape.
You can invest in time-tested BDCs like Ares Capital Corporation (ARCC) or Main Street Capital Corp (MAIN), focus on custom-lending solutions pursued by Capital Southwest Corporation (CSWC), or lean towards growth sectors through Runway Growth Finance Corp (RWAY) and Trinity Capital (TRIN). Or you could buy the entire basket of BDCs, in a market-cap weighted approach.
VanEck BDC Income ETF (BIZD) invests in 30 public BDCs with market-cap weighted allocation levels. This means ARCC, the largest public BDC, is its top holding, representing 22.4% of invested assets, followed by Blue Owl Capital Corporation (OBDC) at 14%. Source
Public BDCs provide exposure to over 4,800 middle-market companies. This makes BIZD a large, diversified fund that benefits from the power of the American Economy, almost as the equivalent of the S&P 500 (S&P 5000, anyone?) for middle-market companies.
Now, just because of the focus on middle-market companies, BIZD’s 5-year performance against the popular index is not to be underestimated. The ETF has beaten the S&P 500 in the post-COVID recovery, as well as the AI-infused market recovery since 2021, with one notable divergence in mid-2025.
Looking at the 3-year period, the S&P 500 has largely been propelled by the mag-7, and this disconnect from the rest of the index is seen from the equal-weighted S&P 500 significantly underperforming the popular benchmark index. BIZD’s struggles are clearly seen in mid 2025, following the anxiety related to private credit.
Market jitters around private debt quality, caused by the bankruptcy of First Brands and Tricolor, resulted in a steep sell-off in BDCs. None of the larger BDCs invested in either, and despite what the market fears or believes, debt will continue to be a driver for corporate and middle-market America for the foreseeable future.
With over $500 billion in aggregate assets, BDCs represent a major pillar in middle-market debt. A belief in widespread defaults across this segment is not just a bearish view on BDCs; it is a bearish view on the broader economy and capital markets.
BIZD maintains a variable distribution policy, and its current yield can be estimated at 11.5%. The ETF has delivered reliable distributions over the past ten years, with levels only modestly lower amidst the post-COVID-19 near-zero interest rate conditions.
BDCs benefit from higher rates, but they also benefit from more loan origination at slightly lower rates. We will note that BDCs continue to operate below the midpoint of their target leverage levels, indicating room for expansion. With declining interest rates and massive investment in data centers, and industrial & manufacturing operations, we expect tailwinds for BDC loan origination activity, and BIZD lets you regularly put a portion of all that action in your pocket.
Following the acquisition of Discover, Capital One Financial (COF) became the largest credit card issuer and the sixth-largest bank in the U.S., with total assets of around $660 billion.
The acquisition is expected to result in significant cost savings while positioning the bank for expanded market share and profit synergies.
The Trump Administration seems to want to impose a 1-year, 10% cap on credit card interest rates and also slash interchange fees. This would be problematic for card issuers, but we want to emphasize that such a significant change requires legislation, and it will still face legal challenges by the biggest banks in America. The Federal Government does not dictate rates that lenders can charge, because there are complex underwriting functions to determine that based on borrower profile and financial stature.
Looking at it from a business angle, attempts to dictate credit pricing tend to produce the opposite of the intended outcome of improving affordability. Banks will tighten underwriting, reduce approvals, and shift activity toward higher fees, and other products like line of credit, personal loans, and BNPL. Cuts to interchange fees will lead to sharp reductions in perks and rewards. Overall, lower access to credit is bad for consumers and bad for the economy in general.
Every industry, from time to time, receives the threat of regulation. This doesn’t push the industry out of business, but pushes them to evolve, and those who innovate through the challenges thrive. Capital One has specialized in technology-driven lending for over three decades, successfully navigating numerous regulatory changes and economic cycles. We seek to take advantage of the market panic, but invest with a higher degree of safety with COF preferreds.
COF maintains investment-grade BBB ratings from S&P, and the bank repurchased 4.6 million shares for $1 billion during Q3 2025, and maintains an authorization to repurchase $16 billion in shares. Additionally, the company declared a massive 33% raise to its quarterly dividend to $0.80/share.
COF’s card business continues to deliver growing purchase volume, boosted by the synergies from Discover, up 39% YoY. The provision for credit losses rose by $280 million YoY, and the Net charge-off rate was 4.61% at the end of Q3, comparable to pre-pandemic levels. The acquisition reflected strong consumer banking as well, with Q3 ending deposits of $107.2 billion (up 35% YoY), and auto loan originations up 17% YoY to $1.6 billion. COF finished Q3 with excellent regulatory capital ratios, with the Discover merger positioning the bank as a leader in consumer banking, lending, and credit, providing financial flexibility to millions of consumers in America (and U.K. and Canada)
During the first nine months of 2025, COF spent $1 billion on common stock and $195 million on preferred stock dividends, compared to $3.2 billion in net income during Q3. The preferreds enjoy excellent coverage and safety, and pay qualified dividends to eligible shareholders.
Currently, COF-L and COF-N offer ~6.4% yields, with ~45% upside to par, which makes it a safer choice for strong total returns in the rate cut cycle.
Flexibility is rarely free. In most areas of modern lifestyle, you pay extra to keep your options open, and those who provide flexibility are the ones who get paid.
BDCs supply capital to the businesses that drive employment, growth, and innovation, filling a giant void left behind by traditional financing options. Banking institutions extend credit and liquidity to millions of consumers to help them enhance their affordability and better manage their cash flows. In both cases, investors are compensated not for speculation but for enabling the system to function. With picks like this in your portfolio, the income you generate isn’t just return; it is the fee you get paid for flexibility. This is the beauty of our Income Method.
THE PLAN
The 2026 target for the Snowball is 10k.
THE COMPARISON SHARE
VWRP £152,680
Using the 4% rule you could currently withdraw £6,107
If you compound over ten years the income from the SNOWBALL will be around £17,846
The value of the comparison share VWRP would have to be £450k.
When VWRP next moves sideways, you could have multi years of not adding to your Snowball.
There are only three.
RULE 1
RULE 2
RULE 3
That would provide a ‘pension’ of around 13% and guess what you get to keep all your hard earned. Remember if you only have a modest amount to invest, the good news is, compound interest takes a few years to really start to make a difference.
One advantage as your Snowball starts to compound you are using the Market’s money rather than risking all of your hard earned so you are more likely to
Tomorrow for any new readers, where have you been ? I will update the rules for the Snowball.
Mark Hartley
MotleyFool
22 January 2026
When hunting for stocks to buy for passive income, I try not to look at yield alone. Yes, it’s the most direct metric that determines how much I could earn, but it shouldn’t be relied upon alone.
Often, high yields are unsustainable and end up leading investors into a dreaded ‘dividend trap’. Soon after purchase, the company slashes dividends and the investor’s left with a bag of worthless shares.
So when I see companies with yields of 8% or more, I first take a closer look. And it pays off because, on a few rare occasions, I find some that are actually worth considering. Here are two of them.
NewRiver REIT (LSE:NRR) is a small (£307m) UK real estate investment trust that focuses on retail and community assets. Earnings are up 54% year-on-year, yet the shares still look cheap, trading on a forward price-to-earnings (P/E) ratio of just 8.9.
That suggests the market’s sceptical about the outlook for smaller property players, but the fundamentals are moving in the right direction.
For income seekers, its financial metrics are impressive: a meaty 9.2% dividend yield with a payout ratio of 97.2%. For most companies that would look dangerously high, but REITs are designed to distribute the bulk of their profits, so this isn’t unusual.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
Crucially, NewRiver’s paid dividends uninterrupted for 15 years and currently has enough cash to cover the payouts, which adds comfort.
The risk? The balance sheet’s a little stretched, with total debt exceeding equity. That doesn’t make it uninvestable, but it does mean investors should watch borrowing levels and refinancing costs carefully. If earnings continue to rise, a fresh injection of equity or asset sales could help de‑risk the capital structure.
Until then, this is a high‑yield stock to consider that could reward well for accepting some leverage and sector risk.
City of London Investment Group (LSE: CLIG) is a global asset manager specialising in closed‑end funds. It offers an 8.55% yield, with a payout ratio of about 106.6%. On the face of it, that’s a bit stretched, but the company has a 12‑year uninterrupted dividend record and about 1.2 times cash coverage, which helps soften the concern.
Earnings are heading the right way, up 11.6% year-on-year, and the shares look sensibly priced, with a P/E growth (PEG) ratio around 1. That suggests the valuation roughly matches its growth prospects, rather than relying on heroic assumptions.
The balance sheet is another plus: a very low debt‑to‑equity ratio of 0.03 drastically reduces the risk of a debt‑driven dividend cut.
The main risk here is that performance is tied to global markets and investor sentiment. A sharp downturn would impact the company’s assets under management (AUM), hurting fee income and the share price in one go.
For that reason, it’s best considered as part of a diversified income basket rather than a lone selection.
While both these stocks have lower dividend coverage than I’d usually consider sufficient, their track records and balance sheets add comfort.
Still, when talking about yields above 8%, there’s always a higher risk of cuts. Both could certainly give a nice boost to an income portfolio’s average yield, keeping in mind the importance of diversification.
NewRiver REIT plc
Third Quarter Company Update
Positive leasing activity, rising occupancy & capital recycling underpin strong quarter
Allan Lockhart, Chief Executive, commented: “We delivered another strong quarter of operational performance, with growing demand across our core markets driving strong leasing activity and rising occupancy. We remained disciplined in recycling capital, improving our portfolio quality and strengthening our financial position.
With market conditions becoming more supportive and our portfolio in its best shape since before the pandemic, we move into FY27 with real momentum. We are confident in our ability to deliver further earnings growth and a well covered dividend.”
Another strong quarter of leasing performance
| ● | During Q3 completed 234,500 sq ft of new lettings and renewals, securing £2.1 million in annualised income across 98 transactions; long-term transactions were completed in-line with ERV and +56.9% vs prior rent |
| ● | Key leasing transactions in Q3 include deals with Boots and B&M in Middlesbrough and H&M in Bexleyheath |
| ● | Year to date completed 650,800 sq ft of leasing, with long-term transactions +8.2% vs ERV and +31.1% vs prior rent |
| ● | Ongoing constructive discussions to mitigate the impact of H1 retailer restructurings and no subsequent restructurings announced |
Operational metrics trending positively supported by resilient consumer spend data1
| ● | Occupancy increased to 96.1% (vs 95.3% at 30 September 2025) and retailer retention rate remains high at 91% |
| ● | Total in-store customer spending in the important Christmas quarter was in-line with last year. We saw strong performance in Grocery which is our largest spending segment with +6.2% vs same quarter last year |
| ● | Total in-store customer spending for the year to December 2025 was also in-line with last year; Non-Food Discount delivered +7.2% sales growth, F&B +4.0% and Health & Beauty +2.4%, offsetting some weakness in Value Fashion at -1.1% |
| ● | As of 1 April 2026, the new rateable values across our portfolio are expected to increase by 7%, which is more than offset by the recently announced discount for retail, hospitality, and leisure properties, resulting in an 11% reduction in rates payable for our tenants. This is positive for our tenants and supports our rental affordability |
| ● | Snozone performance ahead of prior year and budget with Q3 delivering EBITDA of £2.0 million vs loss of £1.6 million in H1 due to seasonality; year to date EBITDA £0.4 million, again ahead of prior year and budget with most profitable quarter to come in Q4 |
On target to complete c.£40 million of disposals in H2 in-line with book values
| ● | During Q3, completed the disposals of The Marlowes in Hemel Hempstead and Sprucefield Retail Park in Lisburn for combined proceeds of £12.6 million (NRR share); The Marlowes was the smallest asset acquired as part of the Capital & Regional transaction, accounting for 2% of the acquired portfolio by value; Sprucefield Retail Park was held in our Capital Partnership with BRAVO and its disposal means only one asset remains in this partnership (The Moor in Sheffield) |
| ● | In January 2026, exchanged contracts on the disposal of Cuckoo Bridge Retail Park in Dumfries for proceeds of £26.5 million, subject to conditions expected to be discharged during Q4 |
Significant Regeneration and Work Out progress
| ● | In December 2025, entered into a conditional agreement to form a JV with Mid Sussex District Council to deliver the mixed-use regeneration of The Martlets shopping centre in Burgess Hill, Mid Sussex; the JV is expected to be formalised by the end of March 2026 once a series of conditions have been realised, including the sale of the residential site which is under offer, and pre-lets of the food store and hotel for which the legal negotiations are well advanced |
| ● | In January 2026, agreement for lease signed with experiential leisure operator on c.80,000 sq ft which will re-position the Capitol Centre in Cardiff as a Core asset and reduces the portfolio weighting to Work Out and Other to 1% from 3% at 30 September 2025 |
Only pays a dividend twice a year, next xd in June, depending on the price could be an option to buy before the xd date and receive three dividends in just over a year, enhancing your Snowball’s yearly yield.
One to consider if you need a REIT to balance your Snowball, Fair NAV seems high, so not buy advice as it’s always better to do your own research.
Deal or No Deal ?
UKW’s dividend remains resilient.
Updated 30 Jan 2026
Disclosure – Non-Independent Marketing Communication
This is a non-independent marketing communication commissioned by Greencoat UK Wind (UKW). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
The UK government has announced the result of its consultation into changes to the inflation indexation used in the Renewables Obligation (RO) scheme. The RO scheme will, from 01/04/2026, be indexed at the consumer price index (CPI), instead of the retail price index (RPI).
Greencoat UK Wind (UKW) had released its factsheet for 31/12/2025 on the day of the announcement and made some changes to its net asset value (NAV) and dividend policy as a result of this news on 29/01/2026.
While neither of the two possible changes to the RO scheme that were being consulted on were ideal,this is clearly the least-worst outcome and removes a key piece of uncertainty that had been hanging over renewable energy infrastructure investment companies. Accordingly, UKW’s shares initially rose as much as 4.5%, before settling c. 0.7% higher by the end of the day (28/01/2026).
Considering the result of the consultation, it makes sense to us that UKW would change the inflation linkage in its dividend policy from RPI to CPI to ensure that dividend cover remains strong and does not compromise future dividend growth nor dividend cover.
Indeed, UKW has increased its dividend by RPI or better for each of the 12 years it has been a listed company. The dividend has grown from 6p per share at IPO to 10.35p by 2025, a cumulative increase of 72.5%, and the target is to increase this further to 10.70p in 2026. This dividend progression has been underpinned by strong cashflow generation since IPO.
The company’s forward-looking dividend cover and cashflow generation expectations remain robust and the former is substantially unchanged. This leaves UKW with one of the most robust dividends in the sector and unique in that the dividend is still linked to inflation.
With shares trading at 98p at the time of writing (on 29/01/2026), the forecast yield based on UKW’s 2026 dividend target is 10.9%. That’s extremely attractive, at almost two-and-a-half times the 4.5% yield offered by a 10-year UK government bond.
In addition, UKW’s structurally higher dividend cover means that it still has options to deploy surplus cashflows towards new investments, buybacks or reducing debt. We note that UKW continues to buy shares back, illustrating the confidence the board has in strength of the balance sheet.
As discussed in our recent feature, the fundamentals of the renewable energy sector appear to remain as strong as ever, and UKW has delivered impressive NAV total returns of 185% since launch 12 years ago, yet shares currently trade below their IPO price, suggesting, on a discount of c. 27%, there remains latent value, in our view.
With a dividend re-investment plan, you fail by the month, not by the year.
Remember a bad plan as long as it has an end destination is better than no plan.
The current best month for dividends is February
Then (January) April
and the worst month is March where currently only one dividend is due, although some February dividends could be slip into March.
The February dividends when invested should earn another 3 dividends for the year.
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