What do you say to an organization that’s simply introduced an 11% dividend? What if that represents its twelfth consecutive 12 months of dividend will increase? And the way a few deliberate 3.4% rise in 2026 consistent with CPI inflation?
No, it’s not a dream, it’s Greencoat UK Wind (LSE: UKW). Renewable vitality could be out of favour a bit proper now. However large dividend yields will certainly by no means be unpopular, proper? This one is within the high 5 of the FTSE 100 and FTSE 250 mixed. And to my thoughts, it’s the least dangerous amongst these leaders.
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What does it do?
Greencoat is listed as a real-estate funding belief (REIT). It owns and operates various wind farms throughout the UK, each onshore and offshore. And the generated vitality goes to a protracted record of consumers through Nationwide Grid.
On the finish of December 2025, the belief’s web asset worth stood at 133.5p per share. That’s down from the earlier 12 months, due to a variety of issues together with energy costs, share buybacks, dividends, and depreciation.
However the Greencoat share worth closed at 93.45p earlier than full-year outcomes on Thursday (26 February). It means each £1,000 an investor places into the inventory now may purchase greater than £1,400 in property — primarily the wind farms.
Please notice that tax therapy depends upon the person circumstances of every shopper and could also be topic to alter in future. The content material on this article is offered for data functions solely. It isn’t meant to be, neither does it represent, any type of tax recommendation.
However is it dependable?
Don’t like paying at the moment’s excessive vitality costs? Right here’s a thought… If we match our annual vitality payments by placing the identical amount of money into Greencoat shares — we may get an efficient 11% rebate simply from the dividends.
However there’s one widespread concern with very excessive dividend yields like this. They’re usually overstretched and trace at a probable lower. And on the face of it, the chance of that appears excessive right here. For 2025, Greencoat recorded a loss earlier than tax of £193m, resulting in a bottom-line loss per share of 8.71p.
Nonetheless, at the very least money and equivalents rose through the 12 months, by £8.4m to succeed in £14.2m. And forecasts counsel wholesome optimistic earnings in 2026 and past, giving us a ahead price-to-earnings (P/E) ratio of a lowly 6.5.
The corporate itself stated it “expects to proceed producing strong cashflow and dividend cowl and expects to have c.£1 billion of capital from natural extra cashflow to allocate over the subsequent 5 years.“
Uncertainty
These items are all very unsure. And Greencoat is speaking of varied potentialities for disposals, acquisitions, and debt plans. A £168m discount in debt principal over the 12 months was welcome, thoughts.
Big political uncertainty hangs over the way forward for wind energy too, at the very least within the quick time period. Nevertheless, Greencoat UK wind operates solely — as its title suggests — within the UK. So it ought to hopefully be resistant to present American hostility in the direction of clear vitality.
Additionally, the poor share worth efficiency — down 27% over 5 years — is difficult to overlook. Are these large dividend yields anyplace close to sure? No, nowhere shut. However I do like administration’s dedication to dividend rises, on high of that nice monitor file.
It’s undoubtedly one I believe earnings traders ought to take into account.
