This could be among the best income stocks for investors to consider right now

Reliable income is a goal for many investors. Another way to generate such cash flow is by buying shares of stock. The process of banking or reinvesting dividends can serve as a source of income.

Based on this stock’s dividend yield and outlook, this could be a very attractive option to consider. FTSE 250 right now.

Company details

I refer to NextEnergy Solar Fund (LSE:NESF). the share price is down 27% compared to last year, and the annual yield is 12.89%.

The fund mainly invests in solar crops, which are mainly available in the UK. It generates income by selling the electricity produced by these plants. Due to the nature of renewable energy, it also benefits from government support, including subsidies and other measures.

Considering that the assets generate consistent and reliable income, it has been a reliable dividend payer for more than a decade. Year on year, it has been steadily increasing its dividend per share, currently standing at 2.11p per quarter. The fact that it is paid quarterly is another benefit that shareholders will enjoy, instead of having to wait once a year.

A decline in stock prices

Some may immediately notice a drop in share price. It is true that this is one factor that has recently helped to increase yields. But when I look at the reasons for this, it is not because of things that the business cannot control.

In 2024, there has been a reduction in short-term UK energy price forecasts, causing investors to worry about the impact this could have on the future income of the solar fund. Furthermore, although interest rates in the UK are now falling, they have remained higher for longer than many expected. Due to the high levels of debt and borrowing required to finance the purchase of new assets, high prices make it more expensive to do business.

These are always risks. However, if an investor doesn’t see these as long-term issues, then a drop in share price could represent an attractive dip to buy, given the dividend yield.

At the top of the tree

When it comes to finding the best income share index you can buy right now, part of the focus will always be on profit margins. At around 13%, it is one of the highest in the entire FTSE 250. Given that the current profit cover is 1.2, this does not seem unsustainable. Any figure above 1 means that the dividend is fully covered by recent earnings per share.

Another factor that is considered valuable is the fact that the current price may not fully reflect the positive outlook. Let’s face it, renewable energy is the future. Although stocks in this sector are not a hot topic right now, it is unlikely that this will continue in the coming years.

Overall, I think this is an excellent income stock for investors to consider. Although the question of whether it is the best is less, it should be on the list for consideration.