Iberdrola: A Steady Climb Higher
Iberdrola’s stock has been rising steadily for three years now, as if pulled by a string. The shares of the Spanish energy giant have more than doubled during this period. The recent pullback is not due to operational factors but rather to market conditions, and it offers an opportunity for long-term investors who want to collect sustainable dividends.
Iberdrola is now one of the world’s largest operators of renewable energy and relies on more than just Spain’s solar power. In addition to solar, the company has also invested heavily in offshore and onshore wind farms. In the latter sector, the group is considered a global leader. Geographically, it has long since expanded beyond its home country. In addition to the Iberian Peninsula, Iberdrola operates throughout Europe, as well as in Latin America and the US. This broad footprint is what makes the company so resilient to crises. In the long term, of course, rising demand for electricity serves as an additional driver.
In the first half of the year, the Spanish company generated revenue of EUR 22.47 billion, while earnings per share climbed by just under 15% to EUR 0.62. Management reaffirmed its full-year targets and aims to increase adjusted net income by 8%. Shareholders benefit from a solid dividend that has been rising for years and currently stands at EUR 0.685 per share. At the current share price, this translates to a dividend yield of more than 3%. There is one unique feature: Shareholders can choose between a cash payout and bonus shares.
RE Royalties: 10% Dividend Yield for Your Portfolio
If you are looking for even higher dividend yields, RE Royalties could be the right choice. The Canadian company pays out CAD 0.04 per share annually and currently offers a dividend yield of more than 10%. Its business model is extremely efficient. The company has adapted the royalty model from the oil and mining sectors to the renewable energy sector. RE Royalties has now invested in more than 130 individual projects and shares in their revenues.
The company is fully committed to green solutions. Its investments span solar and wind farms, battery storage, renewable natural gas, and hydropower, as well as infrastructure projects that improve energy efficiency. As is customary in the energy sector, investments are made over long time horizons; many projects run for 20 years or more. This makes the business model incredibly predictable.
Specifically, RE Royalties provides capital to bring projects to fruition and, in return, receives a share of future revenues from its partner. In addition, the company also acts as a provider of short-term bridge financing. RE Royalties focuses entirely on this niche to avoid intense competition from other financiers such as banks or private equity firms. The company typically acts as a financier for projects with a volume of around CAD 10 to 20 million. According to the company, it has invested more than CAD 80 million since 2016—the return on invested capital averages more than 19%. By way of comparison, this roughly corresponds to the returns from the cloud businesses of major tech giants.
Management, which owns approximately 25% of the company’s shares, believes the current share price does not adequately reflect the company’s value. In response, the company has engaged PricewaterhouseCoopers to help review and optimize its strategic direction. According to the company, options under consideration include strategic partnerships, co-investments, and optimizing the capital structure through equity or debt financing. A sale to a larger industry player has also not been ruled out. For investors, RE Royalties offers two potential attractions. First, the stock currently provides an approximately 10% dividend yield, an increasingly rare level of income. Second, a strategic transaction or takeover could provide additional upside through a potential acquisition premium.
Enel: Italy’s Champion on a Growth Trajectory
Italy, too, has built a national champion in the renewable energy sector. Through its Enel Green Power division, Enel ranks among the world’s largest developers and operators of green energy infrastructure. The company invests broadly in wind, solar, hydropower, and battery storage. Its regulated grid business, serving millions of residential and industrial customers, ensures a high degree of cash flow stability.
At the end of June, Enel presented its half-year results and confirmed its guidance for 2026. Revenue rose to approximately EUR 43 billion, while operating profit (EBITDA) remained at the previous year’s level. The main drivers were stable business in Italy and Spain. Earnings per share exceeded analysts’ expectations. CEO Flavio Cattaneo plans to expand the group in a targeted manner. The largest portion of the investment program is being directed toward the expansion, digitization, and modernization of power grids, primarily in Europe. In the area of renewable energy generation, the company is focusing specifically on high-yield projects rather than purely on volume growth. To this end, it has sold assets in South America and in smaller markets, among other measures. This is expected to drive annual profit growth of 6% through 2028.
Shareholders are also being taken into account. Enel’s stock currently offers a dividend yield of about 4.3%. A dividend of EUR 0.49 per share has been set for the full year (+4%). In addition, the Italian company is currently carrying out a share buyback program worth EUR 1.5 billion. The repurchased shares will be canceled. After a strong performance in 2025, Enel’s stock has been trading sideways since the start of the war in the Persian Gulf, but remains near its annual high. Pullbacks are likely to be of interest to dividend hunters.
With Iberdrola and Enel, investors are betting on the national energy leaders from Italy and Spain. They offer solid dividends and boast sustainable business models. Those looking for a little more momentum will find an impressive dividend yield of around 10% at RE Royalties. Here, too, the business is focused on the long term and offers predictable returns.
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