What do you say to an organization that’s simply introduced an 11% dividend? What if that represents its twelfth consecutive yr of dividend will increase? And the way a few deliberate 3.4% rise in 2026 according to CPI inflation?
No, it’s not a dream, it’s Greencoat UK Wind (LSE: UKW). Renewable power is likely to be out of favour a bit proper now. However enormous dividend yields will certainly by no means be unpopular, proper? This one is within the prime 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 a variety of wind farms throughout the UK, each onshore and offshore. And the generated power goes to an extended record of patrons by way of 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 yr, due to a spread 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 might purchase greater than £1,400 in belongings — primarily the wind farms.
Please word that tax remedy relies on the person circumstances of every shopper and could also be topic to vary in future. The content material on this article is supplied for info functions solely. It isn’t supposed to be, neither does it represent, any type of tax recommendation.
However is it dependable?
Don’t like paying at the moment’s excessive power costs? Right here’s a thought… If we match our annual power payments by placing the identical amount of money into Greencoat shares — we might get an efficient 11% rebate simply from the dividends.
However there’s one widespread difficulty with very excessive dividend yields like this. They’re usually overstretched and trace at a probable reduce. 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 least money and equivalents rose throughout the yr, by £8.4m to achieve £14.2m. And forecasts counsel wholesome constructive 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 sturdy 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
This stuff 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 yr was welcome, thoughts.
Enormous political uncertainty hangs over the way forward for wind energy too, at the least within the brief time period. Nonetheless, Greencoat UK wind operates solely — as its title suggests — within the UK. So it ought to hopefully be proof against present American hostility in the direction of clear power.
Additionally, the poor share worth efficiency — down 27% over 5 years — is tough to overlook. Are these enormous dividend yields wherever close to sure? No, nowhere shut. However I do like administration’s dedication to dividend rises, on prime of that nice observe document.
It’s undoubtedly one I believe revenue traders ought to contemplate.
