I’ve sold 495 shares in FGEN for a profit of £350.00
I’ve bought for the SNOWBALL 8980 shares in TRIG for 6k.
Current yield 11.1%
Current discount to NAV 35%
Current Income £3,298.00*
Fcast income for the first quarter of 2026 £3,884.00*
* Do not scale to achieve a year end figure.
Here’s how you could invest £300 a month for a £38k+ second income
Looking to make a healthy second income to supplement the State Pension? Royston Wild explains the long-term benefit of buying dividend shares.
Posted by Royston Wild
Published 27 February
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
To me, there are few more appealing ideas than earning a large second income without lifting a finger. This is known as passive income, and while it may sound too good to be true, history shows us that it really isn’t.
But how can an investor turn this from a pipe dream into reality? Here’s a step-by-step plan of how you could turn a £300 monthly investment in shares into an extra income of more than £38,000 a year.
Building the pot
Our strategy involves a little legwork at the beginning. You need to set up a tax-efficient investing account, preferably a Stocks and Shares ISA and/or a Self-Invested Personal Pension (SIPP). Then comes the task of finding the best shares, trusts, and funds to fill it with, based on your investing goals and tolerance and risk.
However, once it’s up and running, you should be able to sit back and watch your wealth steadily grow over time. History isn’t always a reliable guide to future returns. But the long-term performance of the stock market is unmatched, which gives me enormous confidence as an investor.
Since the mid-20th century, share investing has delivered an average annual return of 8% to 10%.
Passive income plans
The cornerstone of our strategy is to use our ISA or SIPP to buy shares that pay dividends. That passive income could be used for retirement spending later on. But in the meantime, it is reinvested to amplify compound gains and grow the size of the pension pot.
We should look for stocks that could pay healthy dividends not just now but in the future. Companies with market-leading positions and diverse revenue streams can deliver reliable and growing dividends over time. Firms with strong balance sheets and cash generation should also be a priority.
A top dividend stock
Coca-Cola HBC (LSE:CCH) is a great FTSE 100 dividend share that enjoys all of these qualities. In fact, it’s a dividend powerhouse I hold in my own personal SIPP.
Dividends here have risen every year since 2012. That’s when the Coca-Cola bottler first listed on the London stock market. And over the past five years they’ve grown at a breakneck compound annual rate of 13.4%.
The question is, can the company keep delivering impressive dividends? I’m confident it can, even though it faces competitive pressures and the problem of rising costs. The exceptional brand power of its drinks mean they remain in high demand across the economic cycle. They also allow the company to hike prices to grow earnings and cash flows, the perfect conditions for sustained dividend growth.
A £38k+ second income
With a diversified portfolio of shares like Coca-Cola HBC, I think an average annual return of 9% is quite possible. Based on this, a £300 monthly investment would, after 30 years, create an ISA or SIPP worth £549,223.
If this was invested in 7%-yielding dividend shares, it could generate an annual second income of £38,446. Combined with the State Pension, this could provide a very comfortable retirement.
A lesson Buffett has learned first hand with his investment in Coca-Cola (NYSE:KO). The soft drinks giant has used its consistent and steady cash flows to increase dividends every year for 63 years in a row. And consequently, Buffett’s now earning more than a 60% yield on his original investment in the late 1980s.
FTSE 250 stocks with a yield over double the index average
Jon Smith points out a handful of FTSE 250 stocks that have yields above 6.5% that could make them attractive to include in an income portfolio.
Posted by Jon Smith
Published 26 February
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
For income investors who simply want to be passive in nature, buying a FTSE 250 index tracker that distributes dividends is one option. However, I know many who prefer to actively select FTSE 250 stocks. One benefit is the ability to boost the average dividend yield. So is it possible to buy several stocks with a yield double that of the 3.25% index? Absolutely.
Filtering carefully
There are currently 27 stocks that fit the initial filter of having a yield of 6.5% or higher. However, I don’t believe all 27 are worth buying. Some in that mix have a high yield right now because their share prices have tumbled 30% or more over the past year. This has artificially boosted the yield, but I think business troubles could lead to a dividend cut in the near future. Therefore, an investor would likely want to avoid those companies.
Within the sustainable-yield group, the next thought is which sectors do I like? A company might have a good track record for income payments, but if I think the sector is going to underperform in the coming years, it might not be a great pick. In my view, finance, telecoms, and renewable energy are three areas that could do well in the coming years.
After adding in that sector filter, I can now clearly see companies with a generous yield that operate in a space I think will do well. This is the sweet spot. In terms of individual names included in this bucket, Ashmore Group (6.88% yield), Telecom Plus (6.95%) and Greencoat UK Wind (10.98%) could all be considered.
Ideally, an investor could look to include these as part of a larger diversified portfolio. The benefit is that if one company cuts its dividend in the future, the overall negative impact on the portfolio is manageable.
Digging deeper
Another example that could be considered is the TwentyFour Income Fund (LSE:TFIF). The stock is basically flat over the past year, but it boasts a high yield of 9.85%. The fund managers focus on buying asset-backed securities, such as loans for cars, mortgages, and other forms of consumer debt.
These securities pay a high coupon, given the risk of these loans is often higher than that of more traditional debt. However, the fact that the loans are collateralised by assets such as cars and houses means that even if someone defaults, it can help recover some of the loss. It holds 173 investments as of the latest company update, indicating a well-diversified portfolio.
As for dividends, the company pays out almost all of the profit it generates each year to shareholders. That means dividends are largely funded by real cash interest, not capital. That’s a key element in keeping it sustainable going forward. Further, the company has met or exceeded dividend targets every year since its launch in 2013! So, although past performance doesn’t guarantee future returns, the track record does speak for itself.
In terms of risks, the debt and bonds bought depend on consumer and corporate health. So if we get an economic downturn with higher unemployment or housing stress, it could quickly result in higher loan losses.
Even with that concern, I think it’s still a dividend stock with a high yield for investors to consider.
| Headline:Renew Infra Grp Ld – Announcement of 2025 Annual ResultsDate/Time:27/02/2026 07:00:50 ▼ |
27 February 2026
The Renewables Infrastructure Group Limited
The Renewables Infrastructure Group (“TRIG” or “the Company”) is a London-listed renewable energy investment company. TRIG creates shareholder value through a resilient dividend and long-term capital growth, underpinned by a diversified portfolio of renewable energy infrastructure, and managed jointly by specialist investment and operations managers.
Announcement of 2025 Annual Results
TRIG announces its Annual Results for the Company for the year ended 31 December 2025. The Annual Report and Accounts are available on the Company’s website: www.trig-ltd.com.
Highlights
For the year ended 31 December 2025
Resilient cash generation and reduction in Net Asset Value in a challenging macro environment:
| · | Operational cash flows of £375 million, covering the dividend 2.1x on a gross basis (2024: 2.1x) and 1.0x (2024: 1.0x) on a net basis after the repayment of £192m project level debt. |
| · | Net Asset Value (“NAV”) per share2 of 104.0p (31 December 2024: 115.9p), a reduction of 11.9p over the year, driven primarily by external factors including lower power price forecasts, low wind resource and higher discount rates. |
| · | The weighted average Portfolio Valuation3 discount rate as at 31 December 2025 has increased to 9.0% (31 December 2024: 8.6%), primarily reflecting discount rate increases for European assets and UK offshore wind assets and regulatory changes. |
Disciplined capital allocation and conservative balance sheet management:
| · | £200 million private placement debt raised post year‑end in February 2026, with a repayment profile that maintains the Company’s low interest rate risk and low refinancing risk. Approximately 90% of project-level debt is fixed rate and fully amortising. |
| · | Long-term gearing represents 41% of look-through enterprise value with disposals being actively progressed to further reduce short term borrowings. |
| · | Strong revenue visibility with 75% of portfolio revenues fixed per MWh over the next five years. |
| · | £80m of the Company’s £150m share buyback programme has been completed, consistent with the proceeds from the €100m partial sell-down of the Gode offshore windfarm. With the private placement raised, the Board is accelerating the share buyback programme alongside these results. |
Clear strategy to support long‑term returns:
| · | Active portfolio management delivered £32 million of value‑enhancing commercial and operational initiatives during the year. |
| · | Progress across TRIG’s 900MW development pipeline, with over 200MW of projects in construction, including the 78MW Ryton battery storage project and repowering of Cuxac onshore wind farm. |
| · | Target dividend for 2026 maintained at 7.55p per share3, reflecting the Board’s focus on balancing an attractive income yield with the restoration of net dividend cover to support future growth. |
Richard Morse, Chairman of TRIG, said:
“2025 was a challenging year impacted by policy uncertainty, low wind resource and lower power price forecasts, all of which weighed on the Company’s valuation.
Despite these challenges, TRIG’s portfolio and business model has again demonstrated its resilience by generating £375 million of operational cash which funded a fully covered dividend and enabled significant debt reduction to strengthen the Company’s balance sheet.
Our priority is to restore dividend cover to historical levels and to deliver on the targets we set last year. The Board remains confident in TRIG’s standalone strategy to provide our investors with a sustainable dividend and the opportunity for capital growth.”
Footnotes:
The Company
The Renewables Infrastructure Group (“TRIG” or the “Company”) is a leading London-listed renewable energy infrastructure investment company. The Company seeks to provide shareholders with an attractive long-term, income-based return with a positive correlation to inflation by focusing on strong cash generation across a diversified portfolio of predominantly operating projects.
TRIG is invested in a portfolio of wind, solar and battery storage projects across six markets in Europe with a net operational capacity of 2.3GW. In 2025, the portfolio generated enough renewable electricity to power the equivalent of 1.6 million homes and to avoid 1.8 million tonnes of carbon emissions per annum.
Further details can be found on TRIG’s website at www.trig-ltd.com.
Investment Manager
InfraRed is a leading international mid-market infrastructure asset manager. Over the past 25 years, InfraRed has established itself as a highly successful developer, particularly in early-stage projects, and an active steward of essential infrastructure.
InfraRed manages US$13bn of equity capital1 for investors around the globe in listed and private funds across both core and value-add strategies.
InfraRed combines a global reach, operating worldwide from offices in London, Frankfurt, Madrid, New York, Miami, Sydney and Seoul, with deep sector expertise from a team of more than 160 people.
InfraRed is part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life, and benefits from its scale and global platform.
Operations Manager
TRIG’s Operations Manager is RES (“Renewable Energy Systems”). RES is the world’s largest independent renewable energy company, working across 24 countries and active in wind, solar, energy storage, biomass, hydro, green hydrogen, transmission, and distribution. An industry innovator for over 40 years, RES has delivered more than 29GW of renewable energy projects across the globe.
As a service provider, RES has the skills and experience in asset management, operations and maintenance (O&M), and spare parts – supporting 45GW of renewable assets worldwide. RES brings to the market a range of purposeful, practical technology-based products and digital solutions designed to maximise investment and deployment of renewable energy. RES is the power behind a clean energy future where everyone has access to affordable zero carbon energy bringing together global experience, passion, and the innovation of its 4,500 people to transform the way energy is generated, stored and supplied.
Further details can be found on the website at www.res-group.com.
Chair’s Statement
Overview
2025 was, in many ways, a frustrating year for The Renewables Infrastructure Group and I would like to extend my thanks to our shareholders for their support throughout. A combination of external factors including macroeconomic and public policy uncertainty (particularly in the United Kingdom); exceptionally low wind speeds; and reductions in power price forecasts all resulted in a lower Net Asset Value (“NAV”) of the Company and a tightening of the dividend cover.
The withdrawal of HICL from the proposed combination with TRIG late in the year was disappointing. While the combination process has delayed the implementation of TRIG’s standalone strategy that was set out at the Capital Markets Seminar in May 2025, including targeted asset sales and debt financing, the Board remains convinced that TRIG is well positioned as an independent business. Our confidence is underpinned by a clear strategy, a high-quality portfolio and shareholder support.
Our 2025 results reinforce the resilience and robustness of TRIG’s business model, reflected in £375m of operational cash generated¹, which funded a fully covered dividend in line with expectations and the repayment of £192m of project-level debt. We are pleased to have completed the £200m private placement debt issuance, which was announced on 12 February 2026. Disposal activity remains a key priority.
The Board remains committed to delivering capital and income growth to shareholders. Central to this is our policy of increasing the dividend to the extent it is prudent to do so, while retaining the flexibility to invest for attractive capital growth and desire to build cash dividend cover². The Board has decided to maintain the target dividend for 2026 at 7.55p per share. Having discussed the rate of dividend progression with shareholders over recent months, the Board has concluded that there is recognition that the current dividend level is already at a highly attractive level, which represents 7% of NAV and a c.11% dividend yield³. The Board considers it important to prioritise restoring net dividend cover to the range 1.1x-1.2x to generate sufficient cash to fund investments that will drive future growth of the NAV. The Board will continue its open dialogue with shareholders on the Company’s strategy in 2026.
Facilitating long-term growth through active portfolio management is core to TRIG’s strategy. This strategy is underpinned by debt capacity and active portfolio rotation, accretive reinvestment and additional commercial and operational levers. It is anchored by a robust approach to capital allocation and a resilient dividend. Feedback from shareholders has been supportive of this strategy.
Key highlights of strategic progress made by the two Managers in 2025:
In 2025, our 2.3GW portfolio generated 5.4TWh of clean electricity, the equivalent of 2% of the UK’s total electricity generation⁴. TRIG’s high-quality portfolio located across the UK and Europe is the Company’s bedrock. Over 65% of the portfolio’s revenues are fixed per MWh generated over the next ten years, and c.90% of debt is fixed rate and fully amortising in line with the profile of fixed-price revenues. This deliberately considered approach to revenue and balance sheet management is unique among listed renewables investment companies and gives the Board maximum flexibility when evolving the strategy and appraising the options for the Company in order to maximise long-term returns for shareholders.
During the year, the Board secured a reduction in management fees for TRIG, amounting to c.£8m p.a. (a 28% reduction), which contributes to the cost efficiency of the Company⁵. The total operating expenses ratio for 2025 was 0.94%. Good and efficient governance remains a focus and the breadth of skills of the Directors means that TRIG is able to deliver a diversified, active-management strategy at scale with a lean Board of Directors.
Financial performance
TRIG’s portfolio is highly cash generative with operational cash flows generated in 2025 totalling £375m, representing 2.1 times gross cash cover of the 2025 dividend. After project-level debt repayments of £192m across the Group⁶, net dividend cover was 1.0 times.
As signalled in the Company’s 2025 Interim Results, dividend cover for 2025 was moderated by below budget portfolio generation predominantly due to significantly lower than average wind speeds in H1. Meanwhile, actual power price levels achieved during the year were broadly in line with budgeted levels.
The Company’s Net Asset Value per share as at 31 December 2025 was 104.0p, an 11.9p reduction to the prior year driven principally by macro and external factors. The external factors that weighed on the valuation included lower revenue price forecasts (-6.5p), low wind resource in the year and unscheduled, uncompensated grid outages (-4.2p) and higher discount rates reflecting the increase in European reference rates and the softer market for UK offshore wind investments (-2.4p).
The Managers’ value enhancement activities including improving energy yields through software and hardware upgrades and entering into fixed power price arrangements added 1.3p to NAV. Earnings per share for the year was -5.4p, reflecting the reduction in valuation.
Capital allocation
Given the prevailing weakness in the TRIG share price, which is consistent with the broader sector, the Board recognises the extraordinary value offered through buying back the Company’s shares. £80m of the Company’s £150m share buyback programme has been completed, consistent with the proceeds from the €100m partial sell-down of the Gode offshore windfarm. The Board has varied the pace of the buyback programme throughout the year in response to TRIG’s share price, while being mindful of the Company’s cash resources. New investments entered into exceeded the hurdle rate set by share buybacks.
With the private placement debt now raised, the Board is increasing the pace of the buyback. A further assessment will be made as to the size and pace of the share buyback programme as disposals are executed. The Board remains focused on disciplined capital allocation to drive shareholder returns and will continue to consider carefully the right balance between retaining capital for accretive growth and returning capital to shareholders through dividends and share buybacks.
Outlook
Every asset class is defined by its return relative to the risk taken. It is how opportunities are pursued and risk is managed that defines the success of any investment strategy over the longer term.
Renewables assets are subject to the same principal risks today as in 2013, when the first renewables infrastructure investment companies, including TRIG, were launched. This principally includes exposure to movements in power prices, underlying portfolio performance, and regulatory and public policy risk. The increased risks have weighed on sector NAVs and sentiment over the past 24 months, overlaid with an increase in the cost of capital to levels not seen for almost 20 years.
The TRIG Board believes the companies that will weather these challenges and deliver long-term value to shareholders are those that can operate at scale with a growth investment pipeline, remain diversified across geographies and technologies, provide clear cash flow visibility, resilient portfolio earnings and a robust capital structure. TRIG is the only London-listed renewables investment company fulfilling all of these criteria, managed by its unique dual manager structure.
The Company will have its first Continuation Vote at the Annual General Meeting in June 2026. Ahead of that vote, the Board will present a fulsome update on strategy to shareholders at a Capital Markets Seminar in May 2026, which will seek to give investors the opportunity to support the Company’s long term future with confidence.
Looking forward, the energy transition remains embedded within government policy and central to corporate strategies across Europe. Society continues to demand more secure and cleaner electricity generation. TRIG provides investors with access to the megatrend of global electrification and the UK’s desire for a cleaner, secure and affordable energy system.
In 2025, energy demand in the European Union returned to growth for the first time since 2017 and electricity demand is forecast to increase by around 2% per year through 2030. While Britain recorded a second consecutive year of power demand growth and the fastest annual growth for the first time in over two decades.⁷ Renewables capacity continues to grow, with capacity expansions setting records for 22 years running.⁸ TRIG is actively participating in this transition, reinvesting into new capacity to extend the life of our portfolio, while continuing to offer shareholders an attractive, resilient dividend alongside the potential for capital growth.
Richard Morse
Chair
26 February 2026
Investment Report
Financial highlights
Financial performance and near-term outlook
For a full table of financial performance metrics for the year, see the table on page 18 of the Annual Report.
The Company expects to sell assets in line with the portfolio rotation strategy, which can be expected to reduce revenue, EBITDA, project and fund-level debt. New higher returning projects can be expected to grow revenue and EBITDA as these come into operation once through construction.
Cash flows and near-term outlook
The Group’s operational cash flow for the year was £375m, which represents 2.1 times gross cover of the £182m cash dividend paid to shareholders. Operational cash flows were used to repay £192m project-level debt. After operating expenses, finance costs and working capital, the Group’s distributable cash flow of £183m (2024: £184m) covered the cash dividend 1.0 times.
Pro-forma portfolio EBITDA for the year was £459m (2024: £493m). The table on the previous page shows TRIG’s share (pro-rated for TRIG investment %) of revenues, portfolio EBITDA and cash received from investments. The reduction from 2024 is predominantly due to a combination of the partial sale of Gode (c.£25m of the reduction) in addition to low wind resource, low power prices in Sweden (resulting in economic curtailment) and higher uncompensated grid downtime during 2025.
The balances on the opposite page are not on a statutory IFRS basis, but are pro-forma portfolio balances, which show the Group’s share of the revenue and EBITDA for each of the projects. These balances have been provided to give shareholders more transparency as to the Group’s underlying portfolio performance, capacity for investments and resilience to service the dividend.
In the absence of any disposals or assets entering operations, and assuming the normalisation of wind resource and recognising that the more significant grid outages experienced in 2025 are being resolved, revenues are expected to improve from 2025 to 2026.
Revenues were lower in 2025 compared to 2024, driven by the same factors as covered above for portfolio EBITDA (Gode disposal, wind resource, economic curtailment and grid downtime). Distributable cash flow reduced less than revenue and portfolio EBITDA from 2024 to 2025, principally as a result of taxes and debt service paid at Gode reducing the impact with the sell down of the investment.
Portfolio EBITDA margin was strong at 71% reflecting the high capital expenditure and low operational gearing of renewables projects. After servicing project finance interest and debt repayments, tax and working capital, cash is distributed from the portfolio to TRIG.
Valuation
The Company’s Net Asset Value as at 31 December 2025 was 104.0p per share (31 December 2024: 115.9p per share) and the Company’s portfolio valuation was £2,875m. Earnings for the year were -5.4p per share (2024: -4.7p), principally due to macro and external factors.
InfraRed and RES continue to actively manage TRIG’s portfolio to reduce the impact of the macro environment and external factors on the portfolio valuation, adding c.£32m in the year to portfolio valuation.
Active management of TRIG’s financial and operational activities includes energy yield enhancements across several assets, profit on disposal for the partial stake in Gode, active revenue management across the portfolio and value addition in relation to a planned adjacent battery project to the existing Valdesolar solar farm in Spain. These resulted in a combined positive impact to NAV per share. In addition, share buybacks added 0.8p per share to NAV.
Macroeconomic movements and changes in government policy adversely impacted the Portfolio Valuation, and therefore earnings, by 7.6p per share. These included reductions in revenue forecasts, increases in discount rates across Europe and UK offshore wind, changes in the UK Government’s indexation basis for RO and FIT arrangements, and reductions in capital allowances and increases in business rates announced in the UK Government’s Autumn 2025 Budget. Other factors, principally lower than forecast generation due to low UK wind speeds, reduced the NAV by a further 6.3p per share.
Greater detail on the valuation movements for the year ended 31 December 2025 can be found in the Valuation of the Portfolio section on page 37.
Capital allocation
Responsible balance sheet management and disciplined capital allocation are important factors to help address TRIG’s 38% share price discount to Net Asset Value as at 25 February 2026.
In March 2025, €100m of proceeds were received from partial sale of a stake in the Gode offshore wind farm at a 9% premium to NAV to the valuation of the investment as at 31 December 2023.
In February 2026, TRIG issued a £200m debt private placement. Following strong demand, the issuance was upsized from the £150m target and pricing tightened to a weighted average interest rate of 5.23%. The debt has an amortisation profile aligned with the term of TRIG’s current fixed-revenue arrangements that ensures TRIG continues to have low interest rate and low refinancing risks.
The market for secondary renewables transactions has evolved over the past couple of years with an oversupply of renewables assets, in particular resulting from developers selling positions to strengthen their balance sheet, relative to the capital looking to deploy into renewables investments. An imbalance partly caused by regulatory uncertainty, particularly in the UK. While it was positive that potential plans to overhaul and disrupt the electricity market were abandoned by the UK Government during the summer, this was promptly followed by a consultation to retrospectively change the basis of indexation for RO and FIT arrangements, which has continued to depress sentiment towards the sector going into 2026 despite robust underlying performance of investments.
During 2025, the Board has progressed its capital allocation priorities.
Share buybacks delivered 0.8p of NAV per share accretion in the year to 31 December 2025 from the repurchase of 73 million shares for £57m. Buybacks at a significant discount to NAV are accretive to NAV per share and distributable cash flow per share. The buyback programme was suspended from 17 November 2025 while the proposed combination with HICL was announced, before being recommenced on 12 January 2026.
The vast majority of TRIG’s debt is long-term, fixed-rate, amortising project-level debt. The average interest rate on TRIG’s overall debt is 3.8%. Project-level debt was reduced by £192m in the period and was £1.7bn as at 31 December 2025, representing 37% of enterprise value. Including the £200m private placement signed post-year-end, this structural debt would represent 41% of enterprise value. TRIG’s exposure to floating-rate debt and refinancing risk is limited to the Company’s Revolving Credit Facility. Borrowings under the RCF were £213m on 25 February 2026 following receipt of proceeds from the private placement issuance. The interest rate on the RCF is currently c.5%, drawn in both Sterling and Euros.
£116m of construction spend was incurred during the year, mostly relating to the Ryton and Spennymoor battery storage projects and the repowering of the Cuxac onshore wind farm. Development and construction-stage investments are a strategic priority of the Company to enhance returns, extend the life of the portfolio and progress technology diversification. New investment decisions are benchmarked against alternative uses of capital, particularly share buybacks.
As at 31 December 2025, the Company had outstanding investment commitments of £114m, principally relating to construction activities.
Dividend
The Company’s dividend policy is to increase the dividend when the Board considers it prudent to do so, considering forecast cash flows, expected dividend cover, inflation across TRIG’s key markets, the outlook for electricity prices and the operational performance of the Company’s portfolio. The dividend target for 2026 has been set at 7.55p per share, maintaining the level of the 2025 dividend. The Board has discussed the rate of dividend progression in detail with shareholders during 2025 and there is recognition that this dividend level, which represents 7% of NAV, is at a highly attractive level while prioritising restoring net dividend cover to 1.1x-1.2x. The 2026 dividend target represents a c.11% yield to TRIG’s closing share price on 25 February 2026
Commenting on today’s results, Lucinda Riches, Chairman of Greencoat UK Wind, said:
“The Board and the Investment Manager recognise that this has been a further challenging year for investors and have been working tirelessly to protect and build shareholder value. Net cash generation remained robust at £291 million. Material progress has been made on capital allocation in 2025, having delivered a 12th consecutive year of dividend increases with or ahead of inflation, significant divestments at prevailing NAVs, a sector-leading share buyback programme and a material reduction in debt principal.
We recognise the need to continue to take further action to rebuild shareholder value and we have clear priorities for capital allocation during 2026 which include further divestments, reducing gearing, continuing share buybacks and a disciplined return to reinvestment. Beyond that, our structurally high dividend cover model is expected to deliver around £1 billion of excess cashflow over the next five years which, when supported by further strategic disposals, provides significant optionality to enhance value for shareholders. The Board and the Investment Manager remain fully aligned with shareholders and committed to making the right decisions to deliver long term value for all shareholders.”
Dividend Policy
Following the outcome of the Renewable Obligation (RO) Indexation Consultation, which changed the indexation basis for the RO scheme, the Company has reviewed its dividend policy.
The principal instrument from which the Company derived explicit RPI cashflow linkage was the RO scheme, which will now be indexed to CPI. The Company’s CFD investments also have explicit CPI linkage. The Board therefore determined that its dividend policy will now be to aim to provide shareholders with an annual dividend that increases in line with CPI inflation and, accordingly, the Company will target a dividend of 10.70 pence per share for 2026, a 3.4 per cent increase in line with December 2025’s CPI, which continues to be underpinned by our strong cashflow generation.
Current yield 10.7%
Current discount to NAV 30%
After falling up to 45% in 2025, are these now the best stocks to buy in 2026?
Market downturns and managerial mistakes have sent these stocks plummeting, but are they now potentially some of the best to buy for a long-term recovery?
Posted by Zaven Boyrazian, CFA
Published 22 February
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
When it comes to finding top stocks to buy, often the best place to start is among the biggest losers. Why? Because even when shares fall for a good reason, investors can often overreact, turning a once-overvalued stock into a bargain buying opportunity.
Looking at some of the weakest performers in 2025, Diageo (LSE:DGE) stands out as a frail player, having dropped around 34%. And Severfield (LSE:SFR) has seen its market-cap shrink even further by 45% over the same period.
Diageo’s turnaround potential
Let’s start with the FTSE 100’s leading beverages business. Diageo’s been mired by adverse market conditions alongside poor strategic decisions from management. But with a new leader at the helm since 2026 kicked off, the company’s already making some radical moves to change its fate.
Portfolio optimisation efforts are already underway, with several of the group’s underperforming brands now under review for potential divestments. No new major disposals have yet been confirmed in 2026. However, such moves would rapidly raise some welcome liquidity to tackle outstanding debts while simultaneously refocusing the business on its best brands.
Of course, divestments also carry significant execution risks. There’s no guarantee Diageo will be able to get a fair price and may end up destroying shareholder value in the process. At the same time, with younger generations seemingly drinking less, it introduces some notable long-term demand uncertainty.
Nevertheless, with the stock trading at just 11.6 times forward earnings following its multi-year share price decline, that might be a risk worth considering.
Engineering steely resolve
Severfield, meanwhile, is another international enterprise hit hard in recent years. As the UK’s largest steel contractor, the business has been hit with a number of headwinds.
Rising commodity prices alongside US tariffs have been squeezing profit margins. And the impact has only been compounded by soft construction sector activity due to higher interest rates. The result has been a sharp decline in sales and a complete collapse of underlying operating profits.
However, the firm’s fortunes could be about to change. With interest rates still on a steady downward trajectory, commercial infrastructure projects have started ramping back up again.
That’s already translated into some early recovery signs for its order book, with management highlighting attractive large-scale projects landing in its 2027 fiscal year (ending in May). And with the UK government also outlining new infrastructure spending ambitions in the coming years, Severfield could be positioned for a multi-year recovery.
What’s the verdict?
To say which stock is the best is very subjective. But between these two fallen icons, Diageo currently looks more interesting, in my opinion. The business appears to have notably more levers it can pull to get things back on track, while Severfield appears more dependent on an external market recovery beyond management’s control.
Diageo shares plunge another 7% on grim results – buying opportunity or value trap?
Diageo shares are falling yet again as 2026 interims disappoint investors this morning. But Harvey Jones wonders if we’re finally looking at the turning point.
Posted by Harvey Jones
Published 25 February
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Investors who thought Diageo (LSE: DGE) shares were finally ripe for a recovery have had a brutal wake-up call today (25 February), as full-year 2026 interim results brought yet more bad news. How long can this go on?
I’ve personally bought shares in the FTSE 100 spirits giant five times since the meltdown began in November 2023, triggered by a profit warning as sales in its Latin American and Caribbean market slumped. Despite being one of Britain’s most admired blue-chips, a globally diversified operation with a fantastic array of drinks brands, the news just keeps deteriorating. So is today’s dip the end of the road, or the start of something special?
Serial FTSE 100 struggler
A word of warning. My glass has always been half full with Diageo. Every time the shares have fallen in the last two-and-a-half years, I’ve added another chunk to my SIPP. Today, its glass looks pretty empty. Yet I’m still tempted.
This morning, the Guinness and Johnnie Walker maker cut full-year 2026 guidance for the second time in three months, with organic net sales expected to fall by 2%-3%. Strong growth in Europe, Latin America and Africa was more than offset by sluggish US sales, where cash-strapped consumers are trading trade down from Diageo’s premium brands to cheaper alternatives. Chinese white spirits also continued to struggle.
Net sales fell 4% to $10.5bn in the six months to 31 December. Adjusted operating profit slipped 2.8% to $3.3bn. For me, the killer blow was news that Diageo slashed its dividend in half, from 40.5 US cents per share to 20 cents.
That’s a real blow, especially as the shares had started to stir, rising around 10% over the last month. Now they’re down 15% over one year and a painful 48% over three.
Dave Lewis must turn this stock around
I suspected the first results under new CEO Dave Lewis might prove sticky. Lewis is best known for his turnaround at Tesco. He began there with a bout of so-called kitchen sinking, getting the bad news out early to reset expectations. I wondered if he might try something similar here. To a degree, he has.
I’m deeply disappointed by the dividend cut. The one consolation of a falling share price was the prospect of a higher yield, which was nearing 5%. Now we’re back around the old 2%. Lewis will have to justify that sacrifice by delivering bags of growth, and hiking the dividend when the good times return. Assuming they do.
He insists he already sees significant opportunities to act more decisively, sharpen competitiveness and broaden the portfolio to drive higher growth. Savings from slashing the dividend will strengthen the balance sheet and boost financial flexibility. Let’s hope he’s right.
Diageo shares now trade on a price-to-earnings ratio of 15.4. That looks good value, but then again it’s looked good value for sometime, and the news keeps getting worse. There may be more painful days ahead, and the lower dividend won’t ease the pain. But for long-term investors willing to sit tight, I still believe Diageo is worth considering. Let’s hope one day I’m proved right.
I’ve bought 11686 shares in FGEN for 8k.
Foresight Environmental Infrastructure
Net Asset Value and Dividend Announcement
25/02/2026 7:00am
RNS Regulatory News
FORESIGHT ENVIRONMENTAL INFRASTRUCTURE LIMITED
(“FGEN” or the “Company”)
Net Asset Value and Dividend Announcement
The Board of FGEN, a leading investor in private environmental infrastructure assets across the UK and mainland Europe, announces that its unaudited Net Asset Value (“NAV”) at 31 December 2025 was £651.7 million (104.6 pence per share). After paying the quarterly dividend of 1.99 pence per share, the Company delivered a positive NAV Total Return of 1.8% for the quarter.
Highlights in the period
· NAV of £651.7 million as at 31 December 2025 (£652.7 million as at 30 September 2025). NAV per share of 104.6 pence, broadly in-line with the end of the prior quarter (104.7 pence as at 30 September 2025).
· Delivering on dividend commitment: Quarterly dividend declared of 1.99 pence in line with the Company’s target of 7.96 pence per share for the year to 31 March 2026, a 2.1% uplift on the previous financial year.
· Cash generation remains robust, underpinned by the resilience of the Company’s diversification strategy, FGEN remains on track to deliver a dividend cover of 1.20x-1.30x for the year after amortising project debt facilities.
· Maintaining a conservative balance sheet remains a key priority. Gearing of 30.9% at 31 December 2025 (30.6% at 30 September 2025).
· Income and growth potential with Rjukan, the Glasshouse and CNG Fuels continuing to progress through their ramp-up phases.
Ed Warner, Chair of FGEN said:
“FGEN has delivered another quarter of stable performance, with NAV broadly unchanged and cash generation remaining robust. Our diversified portfolio continues to demonstrate its resilience, supporting our confidence in meeting the dividend target for the year while maintaining strong dividend cover.
“We remain firmly committed to a disciplined approach to gearing and balance sheet management, ensuring the Company is well positioned for long‑term sustainable growth.
“Our growth assets – including Rjukan, the Glasshouse and CNG Fuels – are progressing through their ramp‑up phases and we see some encouraging signs that support the growth and value-creation potential of the portfolio.”
Summary of changes in NAV:
| NAV per share | |
| NAV at 30 September 2025 | 104.7p |
| Dividends paid in the period | -2.0p |
| Power price forecasts | -0.9p |
| RO/FIT consultation outcome | -0.5p |
| Battery energy storage forecasts | +0.4p |
| Inflation | +0.1p |
| Portfolio performance | -0.1p |
| Other movements (including discount rate unwind less fund overheads) | +2.9p |
| NAV at 31 December 2025 | 104.6p |
Valuation factors
Power price forecasts
Short-term power price forecasts provided by independent third-party consultants have softened since the prior valuation date. While this has reduced forward merchant pricing assumptions across the portfolio, the impact has been partially offset by the Company’s existing power price fixes and contracted revenues across a diversified pool of underlying sectors. Overall, the net effect of updated power price forecasts was a reduction in NAV per share of 0.9 pence.
RO/FIT consultation outcome
In line with the Company’s announcement on 14 November 2025, updated assumptions reflecting the outcome of the UK Government’s Renewable Obligation and Feed-in Tariffs consultation have been incorporated into the valuation. From 1 April 2026, both schemes will be indexed at the Consumer Price Index (“CPI”). The impact of these changes reduced NAV per share by 0.5 pence in the period.
Battery energy storage forecasts
Updated third-party revenue forecasts for FGEN’s 100MW operational battery energy storage assets reflect a recovery in market conditions across South England and Scotland. The revised assumptions resulted in an increase in NAV per share of 0.4 pence.
Inflation
Inflation inputs have been updated to reflect the December-to-December actuals for 2025, with RPI and CPI set at 4.18% and 3.32% respectively.
The CPI forecast has been revised to 2.5% from 2026 to 2030, based on third-party forecasts, with longer-term assumptions unchanged. The net impact of updated inflation assumptions increased NAV per share by 0.1 pence.
Portfolio performance
Overall, the portfolio performed broadly in line with expectations, with energy generation being 1.6% under budget before any potential recoveries are considered through either the contractual security in place with external operators or through insurance means.
Within that, national wind speeds and solar irradiance performed below long run averages and unplanned downtime occurred at FGEN’s biomass facility due to leaks in sections of the boiler which are currently being assessed. Offsetting that is another period of exceptional above-budget performance from the Company’s crop-based anaerobic digestion investments – again showing the importance of a diversified portfolio across technologies that include crucial baseload assets that are less susceptible to short term fluctuations in weather patterns.
After another period of resilient operational performance, the Company remains on track to deliver a slightly improved full year dividend cover versus the 1.22x reported for the first six months of the financial year.
Other NAV movements
The usual discount rate unwind net of fund operating costs accounted for 2.1 pence per share of the overall positive movement of 2.9 pence per share for the period. The majority of the balance is driven by two specific value enhancement initiatives.
The Pressure Reduction System which underpins the Gas Shipping value enhancement initiative at Vulcan Renewables contributed 0.6 pence per share to the NAV this quarter, reflecting further value realisation through newly agreed offtake arrangements and continued strong performance on site.
In addition, CNG Fuels’ renewable transport fuel certificate pricing assumptions were raised to 27p, reflecting sustained recent performance and market expectations, adding 0.4 pence per share.
Update on status of FGEN’s growth assets
CNG Fuels continues to perform strongly, with biomethane‑fuelled HGVs remaining the leading large‑scale decarbonisation option supporting a 15% year‑on‑year increase in fuel dispensed, alongside growing adoption of heavier 6×2 vehicles. The RTFC business also remains strongly cash‑generative. At the Rjukan aquaculture facility, operations continue to be optimised and refined following first harvest in 2025 with a gradual production ramp up to the long-term target of 8,000 tonnes of sales per annum by 2028 and EBITDA breakeven forecast for H1 2027 as a critical milestone. Meanwhile, the Glasshouse continues to show strong traction as the UK’s leading domestic supplier of high‑quality medical cannabis, now supplying six of the eight largest clinics in the UK and showing gross profit and EBITDA figures ahead of budget for the year to date – with monthly sales peaking at 270kg in November – above the breakeven level of approximately 200kg per month required to be cash positive.
Gearing
In line with the Company’s stated approach to capital allocation and prudent debt management, FGEN continues to maintain one of the lowest gearing levels in the sector. As at 31 December 2025, total gearing was 30.9%, (30.6% at 30 September 2025) with £128.3 million drawn under the Company’s £150m Revolving Credit Facility.
Dividend
The Company also declares a quarterly interim dividend of 1.99 pence per share for the quarter ended 31 December 2025, consistent with the full-year target of 7.96 pence per share for the year to 31 March 2026, as set out in the 2025 Annual Report. This equates to a yield of 11.8% on the closing share price on 24 February 2026.
Dividend Timetable
Ex-dividend date 5 March 2026
Record date 6 March 2026
Payment date 27 March 2026
