NextEnergy Solar Fund
- Update from
QuotedData
11th March 2024
High- and growing-income
opportunity
NextEnergy
Solar Fund (NESF) is almost 10 years old. Since launch, it has
built a £1.2bn, 933MW portfolio of 100 operating solar assets,
powering the equivalent of over 330,000 homes, declared dividends
totalling £333m, and avoided the emission of about 2.2 Mt
CO2e.
NESF is on
track to pay 8.35p in dividends, with forecast dividend cover of
about 1.3x. Share price weakness that has afflicted the whole
sector means that dividend translates to a dividend yield of 11.1%,
one of the highest in its sector, and the share price's near 30%
discount to net asset value (NAV) provides the prospect of
attractive capital appreciation when sentiment towards the sector
recovers.
Interest
rates look to have peaked, which is improving sentiment, but there
is further to go. We find it hard to comprehend why any stock with
a nine-year track record of growing covered dividends in line with
inflation would not trade on a much lower dividend
yield.
NESF also
has one of the largest capital recycling programmes of its peer
group, which is aimed at freeing up cash to slash debt, and fund
share buybacks and existing and potential construction projects.
Those projects should be both NAV- and earnings-enhancing. A
re-rating of NESF's shares is overdue.
Full Research:
https://quoteddata.com/research/nextenergy-solar-fund-high-growingincome-opportunity-qd/
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NB: Marten
& Co was paid to produce this note on NextEnergy Solar Fund
Limited, and it is for information purposes only. It is not
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securities mentioned in this report. Please read the important
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