Passive income continues to be a popular topic of conversation for investors. With interest rates potentially rising later this year, dividend shares offer an alternative way to try and generate a return on idle cash.

With some stocks offering a generous dividend yield, the potential for cash payouts is high. Here’s one example.

High-yield option

I’m talking about Octopus Renewables Infrastructure Trust (LSE:ORIT). The stock’s down 7% in the past year but boasts a dividend yield of 10%.

The trust invests in renewable energy infrastructure, primarily solar and wind farms across the UK and continental Europe. In turn, the assets owned that generate electricity can then be used to generate cash flows.

Before we get to the divdiend, let’s address the share price fall. I don’t think it’s because the underlying business has suddenly fallen apart. One factor has been the reduction in the portfolio’s net asset value (NAV). The share price typically tracks the NAV, so any move lower matters.

The biggest blow to the NAV was a recent review of the onshore wind assets, which reduced expected long-term generation by around 10% and knocked £30.4m off NAV. Lower long-term electricity price forecasts and higher discount rates provided further headwinds.

However, I’m not too worried about this, as commodity prices fluctuate all the time and go through cycles.

Dividend attraction

Importantly, that discount is also why the dividend yield looks so attractive. The company isn’t suddenly paying out vastly more cash. Rather, the share price has simply fallen while the dividend has continued growing.

I think the payout currently looks secure. The company paid 6.17p per share last year, covered 1.14 times by operational cash flow after scheduled debt repayments. Management’s targeting 6.23p for this full year, which would mark another increase.

Crucially, around 86% of expected revenue for the next two years was fixed as of June, providing useful visibility over cash flows.

There’s inflation protection as well. At the end of 2025, 43% of forecast revenues over the following decade were inflation-linked. That’s a valuable characteristic when looking for passive income that won’t be eroded by inflation in the coming years.

Finally, let’s not ignore that the underlying portfolio is still producing plenty of cash. In 2025, generation and revenue both increased 5%, while portfolio EBITDA rose 3% to £88.3m. So from a fundamental level, the company’s doing just fine.

Of course, I can’t rule out further NAV dips, or uncertain electricity prices. These are risks going forward, but I think most of this is reflected in the share price.

In theory, £10k invested at the moment, using the yield of 10%, could make someone £1k a year in passive income. I believe it’s a stock worth considering for investors looking for high-yield options.

Should you invest £5,000 in Octopus Renewables Infrastructure Trust Plc right now?

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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Octopus Renewables Infrastructure Trust Plc made the list?

Jon Smith does not hold any positions in the companies mentioned.