Last checked at 1 Sep 2021 08:00
London, UK, 1 September 2021
Edison issues update on Premier Miton Global Renewables Trust (PMGR)
Premier Miton Global Renewables Trust (PMGR) is arguably unique among UK investment companies for its broad global focus on renewable energy securities, aiming for both income (current yield c 5.5%) and capital growth. Fund manager James Smith believes that renewable infrastructure operators, in which the trust invests, are likely to greatly benefit from a sustainable potential upward shift in power prices. He views this as driven primarily by increasing demand for electricity as the world transitions to cleaner sources of energy. The trust changed its mandate in late 2020, having shifted in recent years towards renewable energy stocks from its previous wider focus on utilities, water and energy companies. Given that most closed-ended renewable peers trade at a premium, a narrowing of PMGR's discount over time could present an opportunity for investors.
Rising commodity prices and higher CO2 emission costs have led to higher power prices. Coupled with potential increase in electricity consumption, this should lead to higher demand for renewably generated electricity and increase expected investment returns on renewables. We agree with the manager that if power prices continue to climb into Q421, the likelihood of a scenario of higher power prices over the long term increases. If this scenario materialises, PMGR will continue to perform strongly. Its one-year performance (35.0% NAV TR versus 17.2% for peers to end-July 2021) has already benefited considerably from the strong recovery in renewable energy stocks bought during the March 2020 sell-off. While the dividend per share has come down by 3.2p, this was more than compensated for by the reduction in finance costs of c 3.6p, following the refinancing of zero dividend preference shares or ZDPs (see our initiation note for details).
Click here to view the full report or here to sign up to receive research as it is published.
All reports published by Edison are available to download free of charge from its website
www.edisongroup.com
About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.
Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information, please contact Edison:
Victoria Chernykh +44 (0)20 3077 5700 investmenttrusts@edisongroup.com
Sarah Godfrey +44 (0)20 3681 2519 investmenttrusts@edisongroup.com
Learn more at www.edisongroup.com and connect with Edison on:
LinkedIn www.linkedin.com/company/edison-group-/
Twitter www.twitter.com/Edison_Inv_Res
YouTube www.youtube.com/edisonitv