Here are two I’ve bought to hang onto for the next 30 years. I think they both offer excellent value for money.

Mining mammoth

Commodities stocks can prove to be volatile investments over a short time horizon. Demand for their products can sink when times get tough and so can their profits.

But over the longer term, companies like mining stocks can be excellent investments. Take Rio Tinto (LSE: RIO), for example. The company’s share price has soared a colossal 880% during the past three decades.

Of course, during any period of prolonged price weakness, shares prices of commodity miners can topple. And their ability to pay decent dividends can also be compromised. This could become a serious problem for my passive income.

Strength in depth

Look around you. Everything you own is loaded with commodities. The car you drive, the house you live in, even the mobile or laptop you’re using to read this article.

These raw materials are needed in increasingly large quantities as the global population increases. This in turn allows miners like Rio Tinto to generate exceptional long-term profits growth.

This particular mining stock produces a vast range of essential commodities. Copper is used in everything from wind turbines and fridges, to coins and gas pipes. Iron ore is an essential ingredient in steel, and aluminium is consumed in vast quantities for cars and soft drink cans.

Rio Tinto’s exposure to many commodities protects it from weakness in any one market. Its operations can also be found in 35 countries, as the map above shows. This provides it with further strength through diversification. At group levels this protects profits from factors like extreme weather events and rising political risk in certain nations.

I thought Rio Tinto shares were too cheap to miss when I bought them in the summer. And today I think they still offer terrific all-round value for money.

Today the FTSE 100 firm trades on a forward price-to-earnings (P/E) ratio of six times. It also sports an enormous 9.9% dividend yield.

Energy giant

Stocks like The Renewables Infrastructure Group (LSE: TRIG) are providing an increasingly essential service. Population growth means increased energy demand. At the same time, the climate crisis means that countries are having to wean themselves off dirty fuels like oil, gas, and coal.

The Renewables Infrastructure Group is helping to soothe this problem. It has invested in solar and wind power assets across Europe. It is also increasing its exposure to the battery storage sector and last month agreed to develop three more battery assets in the UK.

Profits at firms like this are at risk from unfavourable weather conditions. So The Renewables Infrastructure Group has built a wide geographic footprint to reduce the risk from localised weather patterns.

This renewable energy stock trades on a P/E ratio of 5.8 times for 2022. And its dividend yield sits at a healthy 5.5%. Its why I plan to hold this particular UK share for the long haul.

Dividend investing could get even more lucrative too as market volatility continues. Here’s a quick look at two dividend-paying shares I’ve bought recently.

The Renewables Infrastructure Group

Demand for shares that have exposure to energy production usually soars when economic conditions sour. Investors flock to them because the essential nature of their services gives them more stable profitability than most other UK shares.

The Renewables Infrastructure Group (LSE: TRIG) hasn’t experienced an upsurge in investor interest however. Its share price is flat since the start of 2022. And it’s fallen in value from the year’s peaks it set in March.

On the plus side, recent weakness means the company’s end yield sits at a fatty 5.2%. It also means, at 135p per share, the renewable energy stock trades on a forward P/E ratio of just 11.3 times.

The Renewables Infrastructure Group owns a collection of wind and solar farms across the United Kingdom and mainland Europe. It also owns a battery storage asset in Scotland. And it’s my belief earnings (and, by extension, dividends) at the business could grow strongly in the years ahead as it builds its portfolio and demand for green energy takes off.

However, profits growth here could be damaged if lawmakers decide to row back on their emissions-cutting targets. But as things stand today, the investment potential of renewable energy stocks like this remains super-enticing.

Persimmon

Housebuilder Persimmon’s 13.5% dividend yield makes it one of the best FTSE 100 income stocks, in my book. In fact, its huge yield is why I bought the housebuilder for my own portfolio last month.

Economists and industry analysts continue to warn of a sharp housing market slowdown as interest rates rise. This is certainly something investors need to consider before buying firms like Persimmon.

But, so far, higher rates are failing to stop home prices from rising at a breathtaking pace. The Office for National Statistics says the average UK home price surged 12.8% year-on-year in May. This is even faster than the 11.9% rise recorded in April

This means trading at businesses like Persimmon remains ultra strong. Forward sales at the company rose year-on-year in the first six months of 2022, to £1.9bn.

Disappointingly, Persimmon has had to reduce its build targets this year, due to supply chain issues and labour shortages. But the company’s share price has fallen further since it made that announcement last month and I think this problem is now factored into the FTSE 100 firm’s share price.

At £17.80 per share, it now trades on a forward P/E ratio of just 7.1 times. When taken with that huge dividend yield, I think Persimmon is too cheap to miss.

Here, I’m going to highlight three UK-listed dividend stocks I like the look of as we approach July. If I was looking to invest in dividend-paying companies today, these three would be high up on my buy list.

A sleep-well-at-night stock

I’ll start with Reckitt (LSE: RKT). It’s a FTSE 100 consumer goods company that operates in the areas of health, hygiene, and nutrition. It offers a prospective yield of 2.8% at the current share price.

I think Reckitt could play a valuable role in my portfolio right now as it’s a defensive stock. Its brands include ever-popular names such as Dettol, Strepsils, and Nurofen. People are unlikely to stop buying these brands if we see a recession. So, owning this stock is not going to keep me awake at night.

Reckitt’s recent Q1 results were encouraging. During the quarter, the company was able to raise its prices by 5.3%. This led to 5.6% like-for-like sales growth and helped offset cost pressures.

Reckitt is not a cheap stock. Currently, the forward-looking P/E ratio is about 20, which adds a little risk. I’m comfortable paying the higher valuation though, given the company’s defensive attributes.

Real assets

Next up is Renewables Infrastructure Group (LSE: TRIG). It’s a FTSE 250-listed investment company that owns a portfolio of clean energy assets. It currently sports a yield of about 5.1%.

I like this stock for two reasons. First, renewable energy is a booming industry with a long growth runway. So, I think the company is likely to do well over the next decade.

Secondly, the company owns a portfolio of ‘real assets’. These are physical assets that have real intrinsic value due to what they provide to society. These assets can be a good hedge against inflation as their revenues are often inflation-linked. That’s the case here. When inflation rises, so does its revenues.

A risk here is that the stock is currently trading at a premium to its net asset value (NAV). In other words, if I bought shares now I’d be paying a price that’s higher than the sum of the company’s assets.

I don’t mind paying a premium here, however, given the long-term potential.

A small-cap dividend play

Finally, in the small-cap space, I like Impax Asset Management (LSE: IPX). It’s a niche investment company that specialises in sustainable strategies (a high-growth market). The prospective yield here is about 4% right now.

Impax shares have taken a big hit in 2022 and I think this is unjustified. Recent results for the six months to 31 March showed a 64% rise in adjusted operating profit. Meanwhile, the interim dividend was raised by 31%, which suggests management is confident about the future.

It’s worth noting that if stock markets drop, Impax’s earnings will be impacted. After the recent share price fall, however, I think a lot of risk is priced in.

With the stock now trading with a P/E ratio of 15, I’d be happy taking a small position here.

Fast-moving consumer goods

For example, fast-moving consumer goods company Unilever looks cheaper than it has for ages. With the share price near 3,728p, the forward-looking dividend yield for 2023 is just over 4%.

And I think that income is worth having. Unilever’s compound annual growth rate for its dividend is running above 6%. And I’d be happy to own the shares for at least 10 years.

One concern is inflation, and how that might affect the business. But at the end of April, the company said it was coping well. And it’s managing to raise selling prices to offset rising input costs.

Earnings look set to decline this year. The company is investing to shore up the strength of its brands. But it isn’t immune to weaker general economic conditions. Nevertheless, Unilever has a strong business with a good record of execution. 

Looking ahead, City analysts expect a bounce-back in earnings during 2023. But it’s possible for any business to miss its estimates. Nevertheless, despite the risks, the stock tempts me now.

Smoking products

I’m also focusing on smoking products maker Imperial Brands (LSE: IMB). With the share price near 1,870p, the forecast dividend yield is around 7.7%. That’s for the trading year to September 2023.

The company has managed to execute an orderly withdrawal from the small part of its operations in Russia. And the May half-year report had an optimistic tone regarding the future for the business. Trading has been essentially flat in the first half of 2022. But the company expects recent selling price increases to “support a stronger revenue performance in the second half”.

Of course, the sector is not for everyone given the health concerns regarding the products. And the company has quite a large pile of debt. However, cash flow remains solid and there’s no sign of a dividend cut ahead. 

Renewable energy

My third dividend pick is energy business Renewables Infrastructure (LSE: TRIG). The company invests in operational renewable energy generation projects. And that means onshore and offshore wind and solar photovoltaics assets in the UK and Northern Europe. 

I like the firm’s consistent multi-year trading and financial record. And with the share price near 134p, the forward-looking dividend yield is just over 5% for 2023. However, the pace of dividend growth has been slow with a compound annual growth rate running at just below 2%.

There’s an obvious risk that cash flow and profits could decline if the wind doesn’t blow or if the sun doesn’t shine. But in February with the full-year report the company said it delivered a “robust” financial performance in 2021. And that was despite “volatile commodity markets and the lowest wind resource in the company’s history”.

For me, a long-term investment in Renewables Infrastructure is worth considering in today’s energy environment.

Bank of Georgia Group

Price: £15 per share
Dividend yield: 8.7%

Bank of Georgia (LSE: BGEO) could be in for a rough time in the near term as the global economy splutters. And this particular bank could be viewed as more risky than other banking shares too.

This is on account of how important a strong Russian economy is to Georgia. Right now, the slapping of sanctions on Moscow represents a significant indirect risk to cyclical shares like Bank of Georgia.

However, it’s my opinion that the dangers facing the bank are more than reflected in its low valuation. Today, it trades on a price-to-earnings (P/E) ratio of just 3.3 times. This is massively lower than the multiples of 7 times and 9 times UK-focused Lloyds and NatWest trade on respectively, for example.

I’d certainly rather buy Bank of Georgia than those FTSE 100 banks. Britain’s economy is facing increased headwinds and the The Organisation for Economic Co-operation and Development (OECD), for example, is predicting zero growth for 2023.

I also think the Georgian banking market provides better long-term opportunities than the UK. Financial product penetration in the Eurasian nation is super low. And it looks set to grow strongly from this low base as personal wealth levels sharply rise.

The Renewables Infrastructure Group

Price: 135.8p per share
Dividend yield: 5.2%

Increasing my exposure to green energy has been an aim of mine for some time. So following recent market volatility, I decided to invest in renewable energy stock The Renewables Infrastructure Group (LSE: TRIG).

I chose this energy producer because it has added strength through various levels of diversification. Its portfolio comprises solar, wind and battery storage assets. It therefore offers me protection if one form of renewable energy becomes less profitable. I also like the fact its assets are spread out across Europe. This means profits aren’t vulnerable to adverse conditions in one or two regions.

The problem with investing in renewable energy stocks is the expensive nature of their operations. Keeping turbines and photovoltaic panels in tip-top condition can cost a lot of money, and especially as extreme weather events become more regular.

Still, I believe the potential rewards of owning TRIG shares as demand for green energy rockets offsets the risk that high costs pose to returns. The International Agency thinks wind energy generation will need to rise 18% a year between now and 2030 under current net zero targets.

In fact, I’m thinking of adding more TRIG shares to my portfolio given the cheapness of its shares today. As well as offering a huge dividend yield the business trades on a forward price-to-earnings growth (PEG) ratio of just 0.5. Any reading below 1 suggests a stock is undervalued.

Top income stock

Recession or not, we all need to eat. As such, having some exposure to the grocery sector in my portfolio could be prudent. Normally, my first choice here would be Tesco for the sheer clout it has. Then again, it’s likely that consumers will be even less loyal about where they shop for the foreseeable future.

As such, it’s hard to gauge who will come out on top. Consequently, I’m drawn to Supermarket Income REIT (LSE: SUPR) as a more defensive option.

This real estate investment trust snaps up supermarket property in residential areas with inflation-linked leases. Customers include all four of the biggest companies in this area — the aforementioned Tesco, Sainsbury’s, Asda and Morrisons. The fact that these clients are very long-term means dividends should be as secure as they can possibly be. Based on analyst estimates, SUPR currently yields 4.6%.

The downside to all this is the valuation. A P/E of 22 shows just how popular this REIT is right now. To help mitigate the risk of buying high, I’d put my money into other income stocks in addition to buying here.

Stable dividends

Speaking of which, a second REIT I’d buy is Target Healthcare (LSE: THRL). It snaps up care homes and then lets them out on long-term leases. Exciting? No. Good income visibility? Yes.

Earnings per share are projected to grow by 17% in FY23 (beginning in June). This would leave its shares trading on a forecast P/E of 17: not cheap but not ludicrously expensive either.

But Target is more than just a great option for recessionary times. The UK population is likely to see a significant shift in its age profile in the next few decades. Thanks to increased life expectancy, the number of elderly people requiring care and support will be a lot higher.

The caveat here (and elsewhere) is that the 5.9% yield can never be guaranteed. As any experienced investor knows, it’s best to expect the unexpected.

Income and growth?

As it sounds, Renewables Infrastructure Trust (LSE: TRIG) invests in renewable energy projects. These include onshore and offshore wind farms and solar parks in the UK and Europe. By selling the electricity generated, TRIG is able to provide holders with a stable income stream in good economic times and bad, hence its inclusion here.

Based on analyst projections, the FTSE 250 constituent currently yields 5.2%. That’s not enough to beat inflation on its own but it’s worth highlighting that the TRIG share price is also up 7% over the last year. Valuation-wise, the trust changes hands for 11 times earnings.

Drawbacks with TRIG include the fact that renewables projects can take time to get up and running and can be quite costly to maintain.

Like Target Healthcare however, TRIG has a pretty solid long-term outlook. As the push towards green energy really gathers momentum, I reckon the shares will be in demand. Buying for my own portfolio today could really pay off in a few years.

The strategy document intends to increase the pace at which the UK will now produce green energy in the country. This, of course, is a positive for FTSE stocks that are clearly in the right sector at the right time. I particularly like two such.

SSE is a growth and dividend stock

The first is FTSE 100 renewable energy generator SSE, which I hold in my investment portfolio already. There is plenty that is right with the stock. It is the UK’s biggest producer of green energy. Its financials looked good at the last count. And it has a decent dividend yield of 4.5%.

Now, it might not be inflation beating, given its sky-high levels. In February, it touched 6.2% on a year-on-year basis. And it could increase more over the course of the year. But there is also another reason that the dividend yield is lower than inflation.

That is the increase in SSE’s share price. Over the past year, the stock has risen by some 20%. As a result, its dividend yield looks muted. Moreover, it is in any case higher than the FTSE 100 average dividend yield of 3.5%. 

The Renewables Infrastructure Group’s impressive dividend yield

If SSE beats the FTSE 100 average yield, the next renewable energy stock I am talking about here, The Renewables Infrastructure Group, is placed even better. It is a part of the FTSE 250 index and the average index yield is 2.4% right now. The company, by comparison, boasts a dividend yield of more than double that, at 4.8%. 

The company is actually a fund that invests in wind and solar energy projects across the UK and other parts of Europe. It has seen robust performance in the past year, which gives me encouragement about potential future growth in its dividends as well. Moreover, much like SSE, it has also offered capital appreciation in the past year as well. Its stock is up by some 15%. 

What could go wrong

However, as positive as the signs look, on the ground implementation of strategy might be a different matter. Projects could take far longer to get off the ground than envisaged right now. And realistically speaking, there would be unforeseen speed bumps along the way even when they do. So, further increases in renewable energy stocks could be slower than expected. 

Still, I think they are still worth buying with the long term in mind. The world is moving towards clean energy sources, and these companies are strong contenders to make the most of the trend. 

One challenge is that we don’t know which technologies will be long-term winners. Wind and solar seem pretty certain, but what about hydrogen and nuclear? I’d also want exposure to energy efficiency and recycling. Reducing resource usage is always going to be a win-win for the environment.

Given this uncertainty, the investment strategy I’d use today would be to build a mini portfolio of three renewable energy stocks. That way, I’d have a horse in the race, however the renewable energy market develops. Here’s what I’d buy.

Wind + more

My first stock would be FTSE 250-listed firm The Renewables Infrastructure Group (LSE: TRIG). This business has its roots investing in UK wind farms, but is gradually expanding into other types of energy and into Europe.

I’ve been following TRIG for several years and have been impressed by the management of the group. Each year’s results have generally been as expected. The dividend has grown steadily and currently offers a tasty 5% yield.

The main risk I can see here is that a lot of TRIG’s income still comes from subsidised wind farms with fixed energy prices. In the future, more of TRIG’s income will come from energy sold at market prices, so profits could be more volatile.

Even so, I think TRIG’s experienced management are handling the transition well. I’d be happy to buy TRIG today.

Nuclear stockpile

Some environmentalists are strongly opposed to nuclear power. I think it can be part of the solution to our energy needs, providing reliable low-carbon energy regardless of weather conditions.

One way I’d invest in nuclear energy is through Yellow Cake (LSE: YCA). This company buys and sells uranium, which is used to fuel nuclear power stations. The company held 15.8m lb of uranium at the end of 2021, highlighting its long-term strategy.

There’s plenty that could go wrong here. Yellow Cake buys most of its uranium from Kazakhstan producer Kazatomprom, so there are political risks. The value of the group’s assets is also dependent on the price of uranium, which is hard to forecast.

I don’t know how these risks will pan out. But I believe Yellow Cake’s assets are likely to remain valuable in the future. I’d be happy to tuck some of these away as a play on nuclear power.

An alternative renewable energy stock

My final choice is focused on energy efficiency. Impax Environmental Markets (LSE: IEM) is an investment trust that buys shares in companies involved in cleaner or more efficient delivery of energy, water, and waste disposal services.

Around half IEM’s assets are in North America, with one third in Europe, and the remainder in the Asia-Pacific region. I believe the technologies and businesses backed by IEM will be crucial to our future, regardless of where we’re getting our energy from.

Buying this stock would give me exposure to companies and markets that I wouldn’t invest in directly. Although some of the shares in the portfolio look expensive to me at the moment, I think many of them offer great long-term growth potential. IEM is a stock I’d tuck away for the next decade.

Energy producers tend to be some of the most stable stocks I can choose from. The essential service they provide means that their profits remain broadly unchanged during good times and bad. This sets them apart from most other UK shares where economic downturns can smack profits hard and deliver a hammer blow to dividends.

I like renewable energy stocks in particular because of their critical role in tackling the climate crisis. This is a cause that is close to my heart. And it also provides exceptional investment potential as lawmakers take steps to help the switch to green energy to meet their net zero targets.

Two top renewable energy stocks

With this in mind here are two top renewable energy stocks I’d buy today. I think they could significantly boost my passive income over the long term.

SSE

It’s hard to look past SSE when talking about the best renewable energy stocks to buy. The FTSE 100 business is already a big player in the world of low-carbon power and intends to invest £12.5bn in clean energy by 2026. Under its accelerated strategy announced last autumn, SSE will double its renewable capacity to 8GW within five years. It will also help the firm generate a quarter of the UK’s offshore wind capacity target.

I think SSE’s 5.2% forward dividend yield makes it particularly attractive today. The main issue I have with the Footsie business is the unpredictable nature of wind power which can sometimes hit earnings. This is what prompted SSE to issue a profits warning in mid-2021.

Still, I think the long-term benefits of owning this UK share more than offset any temporary trouble investors like me could experience. And what’s more, I think it looks particularly cheap at current prices. Its forward price-to-earnings growth (PEG) ratio of 0.6 sits well inside bargain-basement territory below 1. 

The Renewables Infrastructure Group

The Renewables Infrastructure Group, meanwhile offers investors a chance to diversify with renewable energy stocks. This investment company has stakes in solar farms and onshore and offshore wind assets all over Europe (though predominantly in Britain and France). It also holds a 100% interest in the Broxburn battery storage project in Scotland.

TRIG’s presence all over Europe means that profits aren’t dependent on favourable weather conditions in one or two places. This helps reduce the risk for investors. A fly in the ointment here could be that the 30-plus solar projects it owns can be particularly expensive to run. But all things considered this is another top dividend stock to buy today. The yield here sits at a chunky 5.3% for 2022.

Here’s a stock that I’d buy today that should benefit from this trend.   

A renewable energy infrastructure trust

The company is The Renewables Infrastructure Group (LSE: TRIG), or TRIG for short. It’s a £3bn investment trust, which means it’s part of the UK’s mid-cap FTSE 250 index.

There’s a good track record of total returns here. In fact, TRIG has been able to generate annualised total shareholder returns of 9.5% between the trust’s initial public offering (IPO) in 2013 and 31 December 2021. TRIG focuses on income-based returns, and this year the dividend yield is expected to be an impressive 5.1%.

What’s more, the dividend is paid quarterly. This can really help with my cash flow planning.

It’s not all about the dividend though. The net asset value (NAV) of the portfolio grew by 3.5%, it said in the full-year results through 2021. These results were strong, despite what the company said was “the lowest wind resource in the company’s history.”

This does highlight a key risk for renewable energy companies: if the wind doesn’t blow, or the sun doesn’t shine, then earnings may reduce.

It’s why portfolio diversification is key. Let’s take a look at TRIG’s.

What’s in the portfolio?

As it stands, TRIG’s portfolio consists of 83 investments, including 50 wind farms and 32 solar assets. There’s also one battery storage asset. So there’s a slight concentration towards wind-based renewable energy, which is something to keep in mind. In saying this, TRIG did buy a further four solar assets in Spain this year.

I also like the fact that it operates across six countries. As such, there won’t be a reliance on any one government or weather system.

Why I’m buying this renewable energy company

Current world events have shown just how much investment is needed in renewable energy. TRIG is well placed to capitalise on this wider sector growth. The high dividend yield of 5.1% is also attractive for my portfolio.

Renewable energy infrastructure trusts can be uncorrelated to equity markets, which is useful. For example, TRIG’s share price is up almost 1% this year while the FTSE 250 is down 10%.

However, one final consideration is that the stock is trading at a premium to its NAV. So it’s not exactly cheap. It’ll have to carry on trading well and growing to warrant the premium share price.

But taking everything into account, I’d buy this company to gain exposure to the growing renewable energy sector in my portfolio.