There’s no shame in reaching 45 without having a wedge of cash in the bank. Over the past year it has been evident with the cost-of-living crisis that it can be hard to have money left over at the end of each month. Yet with a view to building a retirement pot, here are two income shares I believe could help kick-start things.
How to get started
To begin with, let’s cover some points. In order to have money to buy stocks, an investor would need to improve cash flow. This could be by cutting back on non-essential spending or increasing the primary income source. The left over money can then be used to invest in the stock market.
Another point to flag is that I’m not suggesting only holding two income stocks. A broad range of companies would be great for diversification over time. But in terms of starting, I really like these ideas below.
Should you invest £1,000 in Foresight Solar Fund Limited right now?
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The start of a comeback
Mobico Group (LSE:MCG) is the name coach travel company National Express operates under. The company’s reach isn’t just confined to the UK, but has operations in places such as Germany and the US.
Over the past year the share price has fallen by 53%, which has certainly raised eyebrows. The dividend yield sits at 8%.
The company was hit hard by the pandemic, with public transport numbers falling off a cliff. It still hasn’t fully recovered.
The prospect of a very slow return to pre-Covid levels remains a risk. However, I think buying now could be the perfect time. The half-year results showed an 18.5% jump in revenue versus the same half last year.
Importantly, it re-established the dividend. Having not paid one out since Covid-19 hit, this is a huge positive. This is a key factor that makes me believe its management team is confident about future profits.
Looking forward, I see the dividend per share increasing, especially if it hits the forecasted adjusted operating profit of £200m-£215m.
Renewable energy is back
Next up is the Foresight Solar Fund (LSE:FSFL). The fund aims to generate both income and long-term capital growth by acquiring operational solar power plants. The vast majority of these are based in the UK.
The stock is down 15% over the past year, with a dividend yield of 7.95%. Interestingly, the net asset value (NAV) hasn’t fallen that much. This means the share price trades at a 22% discount to the latest quarterly NAV value.
I like the business because it’s the largest UK-listed dedicated solar energy investment company. I think solar is going to come back heavily in focus as a major renewable energy source in coming years.
This could be helped by new government grants to incentivise users. Either way, when investors start to think about how to invest in solar, Foresight Solar Fund is going to be one of the first names to pop up.
One concern I have is that the company limits the amount invested outside of the UK. I see this as narrow minded and could mean losing out on opportunities in Europe.
I’m thinking about buying both stocks in coming weeks due to the attractive yield, and think other investors should consider doing the same.
