National Grid is raising £7bn in a rights issue to fund electricity grid expansion in the UK and USA. This is the biggest rights issue in London since 2009, but is there enough here for equity investors? The new capital will help to fund 10% annual asset base growth, and 6-8% growth in earnings, but the growth in the dividend will be in line with CPIH. Clearly this is a fluid number, but currently is at 3%. There is a strong argument that the growth in the dividend should be more aligned with the growth in the underlying business.
Jim Wright’s Post
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10%+ dividend yields from energy infrastructure The UK stock market continues to present plenty of attractive income opportunities. However, with interest earned on cash in the bank now considerably more appealing, stock market investors need an even better reason to be tempted away. These infrastructure funds might be just the ticket, with dividend yields exceeding 10% and the potential for capital growth as well. #investing #energyinfrastructure #dividends #dividendinvesting https://lnkd.in/eMZvf_gK
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10%+ dividend yields from energy infrastructure The UK stock market continues to present plenty of attractive income opportunities. However, with interest earned on cash in the bank now considerably more appealing, stock market investors need an even better reason to be tempted away. These infrastructure funds might be just the ticket, with dividend yields exceeding 10% and the potential for capital growth as well. https://lnkd.in/ekRYafch
10%+ dividend yields from energy infrastructure
investorschampion.com
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National Grid PLC (LSE:NG.) reported trading remains in line with expectations, although it expects earnings to be more weighted to the second half, reflecting contributions from its US operation. The company, which runs the UK’s electricity distribution network, said it expects contributions to operating profit from its UK regulated businesses to be broadly evenly split across the year. For the US regulated businesses, contributions are set to be more heavily weighted towards the second half, it said in a trading update. National Grid expects its New York business to deliver 10-15% of its full-year operating profit in the first half, given a higher non-cash environmental provision charge. The company expects a broadly even split of operating profit between the first and second half in National Grid Ventures. More at #Proactive #ProactiveInvestors http://ow.ly/tO2v104WMGH
National Grid trading in line, earnings weighted to second half
proactiveinvestors.co.uk
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A new Eastern Power Network Benchmark Green bond coming today: price talk G+105/110, it will likely be oversubscribed and priced tighter. Looks good with their existing curve largely trading inside G+90. SVS RM Infrastructure Bond fund owns some Eastern Power 5.875 2024 which matures next month, and RM Funds are generally looking to extend duration so an opportune moment?
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Back in 2020-2022, we warned clients and prospective investors about the unsustainable trends of falling returns and rising debt in the Utility sector. We weren't just throwing stones - we had seen our own midstream sector go through a similar painful period during 2014-17. It took many years (and significant underperformance) for the Midstream sector to cut payouts, cut debt, consolidate many weaker players and turn into the fundamentally sound sector it is today. On the other hand, Utility investors are hoping for a recovery after only modest equity underperformance, minimal dividend cuts and without a fundamental re-evaluation of what constitutes a sustainable capital allocation and financing plan. Historical experience in highly leveraged real asset sectors does not support this goldilocks view.
The Utility sector's notable underperformance vs. the Midstream sector, as well as vs. the broad market has led many real asset investors to ask, "is it time to swap out of midstream stocks and buy utilities?" Recurrent's last investment letter (Feb 2024) examined the divergent trends evident in recent announcements by Midstream and Utility stocks. While Midstream companies are retiring debt and surprising the market with the magnitude of cash returns to investors, Utilities are piling up debt as low-return capex faces a world of rising rates and less friendly political landscapes. https://lnkd.in/dhyUEAF
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Smart money is piling into energy to take advantage of increasing demand and higher volatility. Businesses without a strategy and plan to manage their energy procurement will pay the price. A failure to plan is a plan to fail...
The Next Big Power Play on Wall Street
wsj.com
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Ben Yearsley, of Shore Financial Planning, highlighted in the Daily Mail that Harmony Energy Income Trust selling Rye Common above its asset value should allay fears about valuations across the GB battery energy storage sector. HEIT currently trades at a 24 per cent discount to NAV and yields 9 per cent 🔋 Read the full article – Invest with these income trusts and you could be picking up dividends at a bargain price – here: https://mol.im/a/12523831 #BESS #Investment #RenewableEnergy
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This week Ofgem's energy price cap rose by 5%, from £1,834 to £1,928. This increase means many of us will see our electricity and gas bills rise by around £100, impacting small to medium sized businesses in particular. Tax efficiency and streamlining costs has never been more important... Have a question about your business? Speak to one of our experts by calling 0203 912 9933 or email info@verallo.com. #businessadvice #financialadvice #energypricecap #taxefficiency #accountancy
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Ever thought about installing Solar Panels on your business? 🌱 Here's an incredible case study in which the customer is MAKING MONEY DAY ONE. Using a highly conservative savings forecast, combined with the attractive export rates now available to businesses, this customer was able to generate a monthly payment that was actually less than their savings/ export income!! With only a £6k deposit, we then put in place finance for £125,000.00 and defer the Full VAT until they claimed it back. Minimal impact to cash flow and another income generating asset fit to run for the next 20-30 years. Up to 10 year terms ✔ Minimal deposits ✔ VAT deferrals ✔ Agreement managed start to finish with one account manager ✔ Thinking about going green? Get in touch any time. Ben Reed 💻 - ben.reed@angloscottishfinance.co.uk 📱 - 07415 521 058 Anglo Scottish Asset Finance Limited #solarpower #assetfinance
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Peak negativity? Weak sector sentiment - in part brought about by reactive policy on taxation - has caused significant value destruction and driven a wave of M&A as companies look to transact their way out of the UK’s fiscal quagmire. Within the last 12 months we’ve seen key UK Independents seek market relevance by increasing in scale. Harbour Energy/Wintershall Dea, Ithaca Energy/Eni UK, Serica Energy plc/Tailwind. Three separate deals with different stock-specific nuances, but the thread that joins them is a search for growth and an attempt to mitigate the risks and uncertainties introduced by damaging fiscal policy. With several high-quality listed E&P companies trading on very low earnings multiples of c.1-2x EV/EBITDA, dividend yields between 10-15% whilst also carrying out share buybacks, surely we’re close to peak negativity and the time to act is now. #UKCS, #upstream, #oilgas
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