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11 Mar 2024 12:12
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/
This research is also available free on our website www.quoteddata.com where you will also find news, performance data and factsheets on every London listed Investment Company. QuotedData writes and distributes research on a number of quoted companies, facilitates meetings between those companies and existing and potential investors and assists in raising additional capital where required.
NB: Marten & Co was paid to produce this note on NextEnergy Solar Fund Limited, and it is for information purposes only. It is not intended to encourage the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of Marten & Co Limited which is authorised and regulated by the Financial Conduct Authority. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail Clients under the rules of the Financial Conduct Authority.
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