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I’ve been following Greencoat UK Wind (LSE: UKW) for a while now, because it’s one of the promising renewable power shares on the FTSE 250.
The large attraction is the yield, which has just lately ticked simply above 10% — a goldmine for revenue traders.
However as at all times, the query is whether or not that revenue stream is reliable. I made a decision it was time to take a better look.
What the enterprise does
Greencoat UK Wind invests solely in working UK wind property, together with each onshore and offshore farms. That issues as a result of it avoids the build-out threat you get with early-stage renewable tasks, the place delays and overruns can harm returns.
The belief’s said purpose is to pay an annual dividend that rises in step with inflation whereas preserving capital worth in actual phrases.
Right here’s just a few fast stats:
| Metric | Newest figures |
|---|---|
| Working wind farms | 49 |
| Internet producing capability | 2GW |
| 2025 renewable energy generated | 5,403GWh |
| 2026 dividend goal | 10.70p per share |
Except for a short pause in 2024, the corporate’s elevated its dividend for 12 consecutive years, paying out £1.4bn in dividends since its IPO. That’s the sort of credibility revenue traders want: a dividend backed by a protracted file, not only a sudden yield leap.
To this point, so good. However is that the entire story?
What I like in regards to the inventory
The revenue case is simple. Greencoat UK Wind targets an inflation-linked dividend, with its 2025 annual outcomes presentation stating a goal of 10.70p per share for 2026. That may be a 3.4% enhance, in step with December 2025 CPI.
In its H1 2025 presentation, it confirmed earnings lined dividends 1.3 occasions. That isn’t unhealthy, but when earnings slip additional this 12 months, it might battle to take care of that stage.
That is the important thing factor traders want to look at. A ten% yield sounds sensible, but when the belief can’t cowl it, the dividend’s in danger. There’s some consolation in the truth that robust money technology and reinvestment have stored issues lined prior to now.
Principally, for a inventory boasting a ten% yield, the protection is above common — but it surely isn’t rock strong.
Different dangers to look at
The elephant within the room right here is the share worth. It’s down 22% prior to now 5 years. Estimates recommend it’s now buying and selling at a reduction to NAV of between 23%-29%. The 2025 outcomes presentation confirmed NAV per share fell to 133.5p after the up to date overview.
That tells me sentiment’s been poor, even when the underlying property stay productive.
The dangers are actual. Wind technology’s variable, energy costs can fall, debt prices matter, and coverage shifts can hit the sector. The corporate itself famous below-budget technology in 2024 and 2025, plus stress from power-price assumptions.
Lengthy story brief?
Whereas I believe UK Wind’s a strong enterprise – and one which I’d like to see succeed – it’s working in a really difficult trade. In consequence, that 10% yield’s balancing on a less-than-stable basis.
For traders prepared to abdomen the volatility, it’s price contemplating however solely as a small allocation. Personally, I’ll maintain off till the sector stabilises.
If you happen to additionally assume it’s a bit dangerous, I’ve recognized one other revenue inventory that will provide extra secure, predictable returns.
What revenue inventory will we like higher than Greencoat Uk Wind Plc proper now?
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Mark Hartley doesn’t maintain any positions within the corporations talked about.
