Member Info for tichtich

@NoloServileCapis

The situation is actually better than that, because the dividend is growing. A 9% yield with the dividend growing with inflation indefinitely would be a 9% REAL return.

If course I'm not saying the dividend WILL grow with inflation, but hopefully it will do OK in that respect.

If that's how you see it, I suggest you go ahead and sell your LGEN shares. There's no point in keeping shares that you think are losing you money. Of course, most of us here don't see it that way, so we'll carry on holding LGEN.

Hi. I bought a chunk of this on Friday. I had some spare investment cash (after taking profits on something else), and I thought this was a good place to park the money for a while. Should do much better than bonds of equivalent duration and risk, since on top of the loan interest we're getting the benefit of redeeming the discount to NAV within a year (on average). The risk, I suppose, is that the borrowers turn out to be more flaky than the managers have estimated, especially if the economy craters within the next year. However, I think I'm right in saying that the loans are secured, so most of the money should be recovered eventually, even if the borrowers go bust. I think that limits the risk.

"and the shares still rose on a day when BYD was in the news for trying to negotiate down 3rd party car parts citing 'increased competition'."

Supposedly, when shares go up on bad news (or down on good news) that means the market has turned. Personally I'm happy to just hold for the long term, though I'll consider selling if the price is attractive enough.

As far as I can see, the only difference between cancelling shares and keeping them in treasury is that shares in treasury could be resold back into the market, which would be easier than issuing new shares. If they're not going to resell them, then I can't see that it makes any difference. Any dividend paid to shares in treasury comes straight back to the company, so the net effect is the same as if the shares didn't exist.

I'm with the long term investors. I rarely buy anything unless I'm intending to hold for long term dividends. But I will sell if I spot a good opportunity to rotate. Last week I took some profits on a large RESI position, and bought some GSF, SEIT and FGEN. That said, I still have some of that RESI money to deploy, and I'm feeling I may have missed the boat a bit on that. Was thinking of adding even more GSF if it fell below 50p again, but that's probably not going to happen now. My last GSF add was just under 51p, and I hate to add again at a higher price! I may just hold some cash for a while, and see what comes up. There are a few things on my shopping list, but they've gone up while I've been watching them, and I'm hoping they'll go back down again!

I wouldn't assume that the dividend is safe for the long term. If I thought that, I'd put my entire pension pot into UKW. (I have about 20% in it, and 10% in other renewables.) I think it's pretty safe for the next few years, but there are longer term risks.

FYI The current yield is exactly 8% (at price 125p), as this year's dividend is 10p. The figure of about 8.7% given by Google Finance (and probably some other sources) is artificially bumped up by the unusual way that last year's dividend was paid.

Yes, but how much of their cash flow is contracted?

Interesting article on gas prices:

https://www.theguardian.com/business/2024/nov/19/trump-oil-gas-prices

UK gas and electricity prices currently high:

https://tradingeconomics.com/commodity/uk-natural-gas

https://tradingeconomics.com/united-kingdom/electricity-price

Cold weather, and maybe the effect of Russia cutting gas to Austria.

@schwee

I disagree. The dividend is well covered, and share buybacks don't reduce the NAV or equity _per_share_ (which is what matters) because they reduce the share count.

In my opinion, if the money should have been spent on something else, it would be reducing the leverage (debt). That would be less accretive to NAV than buybacks, but it would reduce risk.

The fall in share price is likely due to concerns over higher for longer interest rates and Trump's win, which might lead to lower prices for natural gas. In any case, these are long term concerns. The dividend is safe for the next few years.

@tweedly

I don't think LCOE takes into account all the additional costs that arise from wind energy being intermittent, and from having to get it from out-of-the-way places to where it's needed. I would love to see a comparison that takes those costs into account.

In my view not much has changed for the long term investor. Excessive optimism about interest rates has proven unfounded (again). US election has made investors gloomy about energy prices, on the basis that more drilling will mean an energy glut. (Maybe, but that will take time and producers won't keep drilling as prices fall.) In fact, UK gas and electricity prices are up at the moment, though that can always change. One month of bad weather is not significant. I'm a bit more concerned about the fact that we've had broadly below-expected wind for the last 10 years. But UKW had done OK despite that. We still have a government that's committed to the energy transition for nearly 5 more years. Maybe the risks beyond that have been raised by Trump's election (but on that score I think there are far more serious things to worry about).

Here's a link to the article:

https://blog.gorozen.com/blog/us-natural-gas-production-is-plummeting?utm_campaign=Weekly%20Blog%20Notification&utm_medium=email&_hsenc=p2ANqtz-9CW8jKz37ya6JKeQ_J3gh0MIDbq6GTsN_CR4I8B5K-ZClwc9sbfjYTTQiGP_71cuZzyDO0HBC4OZho_ogln_fCm0YuAQ&_hsmi=333003413&utm_content=333003413

US gas is already dirt cheap. It's the LNG export capacity and cost that keeps the price in Europe at several times the US price. No doubt Trump will allow more export capacity to be built, but that will take years.

I've just been reading that US gas production has been declining. The common view seems to be that this is just because producers are limiting production due to the low price. But the article I read argues it's because the gas fields are becoming depleted. (Shale reserves deplete far quicker than conventional.) If that's true, then more drilling might not make much difference. Let's hope that's true, for the sake of the planet.

As far as I'm aware, there's no new windfall tax on renewable energy. And the old one only applies if we have another windfall (like in 2022/23), which we probably won't, and if we do, so much the better!

I sold a position the other day, and I've been umming and ahhing about where to put the money. As usual, after weighing up other options, I decided that UKW suits me best, and just added to my already large position. (Other contenders included SEIT, RMII and sitting on the cash for a while.)

Re the NI increase... Surely UKW doesn't use much manpower. Just some occasional maintenance. In fact, most of my investments are in things that don't use much manpower.

The current yield is actually about 7.5% (based on the current dividend of 10p). The Google figure is exaggerated because of the bonus amount paid at the start of this year (when they upgraded last year's dividend to match this year's). That said, the 2025 dividend will be a little higher, due to the RPI adjustment.

I don't see what the jurisdiction has to do with whether to pay out cash as a dividend. I doubt they are keeping their cash pile in a Kazakh bank.

What concerns me a bit is that in the last year they don't seem to have had any spare cash left over, either to grow the cash pile or to pay out a larger dividend. I just want to see more free cash flow (from higher metal prices). What they do with it is less important, though I think they need to build up some cash, as I expect lenders would be reluctant to lend 100% of the cost of a new development.

On another point, the reason I invest in low-growth high-dividend stocks, rather than a broad index tracker, is that I reckon it reduces the "sequence of returns risk". To put it another way, I can't afford to start my retirement with a "lost decade". If you follow the typical advice of selling shares for income, you may be forced to sell at low prices in a long bear market. I prefer the idea of living off dividends and not worrying about what happens to the prices of my shares. Plus, I think that more growth-oriented shares tend to be overpriced at the moment, especially in the US.

Of course , I could turn out to be completely wrong!