SEIT; go on say it

Proof-point Clues and Clueless Views
The Oak Bloke
Apr 12

Dear reader

Last week down -17% since its inclusion in the OB25 for 25, I declared I’m going to go in large here with proceeds from my imaginary “25 for 25” portfolio. 20% of the 25 for 25 makes it the largest single idea. A bold move. Or brash too?
Brash? £1k bought at 50p in 2025 and £10.3k added at 42p in 2026 means I’m in at a 42.6p average buy. I’m pretty happy with that.

Days later SEIT declares it’s going into wind down.

Readers have asked what do you think about that OB?

Beyond the obvious disappointment that it has come to this, the present reality is still that it is a share you can buy for 42p which is yielding a 6.36p dividend per year, so delivering a 15% yield 92% covered by actual earnings (topped up by capital returns) and is delivering a growing cash income where the “fair value” noise (in blue below) is blinding people to the growing income stream. If inflation rises, as seems likely, these energy assets generate inflation-linked income. Debt is fixed.

Meanwhile the negative “fair value” has essentially been driven by a growing discount rate taking this trust to a levered discount rate of 9.7% far beyond that of its peers. Hiding about £300m or 28p per share of NAV if the trust was valued at its discount rate in 2021 (while the assets are broadly identical to those of five years ago).

Five years ago 20% of the world’s Oil wasn’t cut off in the Persian Gulf. Energy is arguably far more valuable in a world where Oil and energy is on the cusp of a massive rise – in my opinion.

But we also now need to consider the wind down and the inevitable question:

How Easy will it be to Sell?

1 Red Rochester £246m or 23p a share

Proof Points:

Enwave is a district energy system which sold for a huge premium to NAV in 2021 (at the height of the market) for $2.8bn to Brookfield.

Vicinity Energy another district energy sold in October 2022 for 12X EBITDA

Vauban Infrastructure acquired Coriance in France in June 2023 at 15X EBITDA.

Antin acquired Veolia’s district energy business this month April 2026 for $1.25bn so at a 12.5X EBITDA.

According to Finerva valuations are rising, EBITDA multiple are rising.

EV/Multiples for green energy are back at 16X EV/EBITDA according to Finerva research.

Consider the growing EBITDA at Red-Rochester where even a 12X EBITDA implies a $500m price tag so a 50% premium to the gross portfolio value of $330m (as at 30/09/25).

Yet the market values Red Rochester at a 50% discount so at $114m + $102m debt = $216m

And $216m/$43.5m is a 5X EV/EBITDA.

Wait what?

Moving to views in the chattersphere where even getting 42p back is said to be “very difficult” and instead “we are going to have a fire sale”. Any evidence to that? No, just a haha.

2 Onyx £222.2m or 20p a share

We should consider Onyx as a developer-owner-operator so as three elements for sale.

2.1. The “YieldCo” (The Operational Portfolio)
This is the “safe” part of Onyx: 1,300+ operational projects across 30+ US states.

Primarily rooftop solar and carports for “Blue Chip” names like Walmart, Amazon, and Primo Brands. These have 15–20 year contracted Power Purchase Agreements (PPAs) with inflation-linked escalators.

Portfolio GAV Value $580m, project debt -$346m; NAV $233.8m or £187m

The portfolio is 211MW with 50% energised at the prior update September 2025, so an average value of $2.75m GAV per MW.

2.2 The “DevCo” (The Pipeline & Platform)
The Asset: Onyx has a ~500MW+ pipeline of projects in various stages of sign off and commercial business development.

Valuation: £35.2m or $47m.

Market Proof: In June 2025, Onyx secured a $260M financing facility (expandable to $350M). You don’t get a quarter-billion-dollar credit line from major banks unless your pipeline and platform have real, audited value.

2.3. The “New Frontiers” (Storage & EV Charging)
Onyx is no longer just “Solar Onyx.” It has moved heavily into BESS (Battery Energy Storage Systems) and EV Fleet Charging.

The Opportunity: Solar-plus-storage projects have higher EBITDA margins (often 10–15% higher) than standalone solar because they can “shift” energy to peak-price periods.

The Proof: The Maine project energised in Feb 2026 explicitly highlighted its “behind-the-meter” non-export design, which is the high-value sweet spot for industrial users.

2.4. Reduction (-$83m/-£63m/-5.8p)
Arguably you could say that with SEIT in wind down, Onyx will be unable to fund any development after 2027. This is described as -5.8p a share for SEIT (the -2.5p is part of the -5.8p before you let detractors double count).

It’s not necessarily a foregone conclusion when Onyx can (and has) borrowed from other parties, potentially extend facilities (keeping debt to EBITDA in proportion) and also can recycle cashflow into new projects theoretically but let’s assume it can’t and that its owner SEIT shall suck all cash flow out. We are in wind down now.

So Onyx is worth only 14.2p or £159m net of the -5.8p per share development platform aspect and boasting a 211MW portfolio the PPA’s are valued at £0.75m NAV each MW and £2.4m ($3.2m) per MW GAV.

The US C&I (Commercial & Industrial) solar market is currently seeing a wave of consolidation. Big “aggregators” are buying smaller portfolios to get scale. C&I are very lucrative containing SREC (solar renewable energy certificates – which are State level subsidies – nothing to do with Trump) selling energy at a retail price $90/MW not wholesale price ($30/MW).

Notice the vast difference in revenue per MWh for retail solar vs utility solar which this detractor invested heavily in making “substantial loses”. As I said 12 months ago Ecofin is not a good proof point to Onyx. It’s a very different business model – even if both are “solar”.

Better – and recent – examples of C&I/retail deals are Altus Power December 2025 buying 234MW at $2.8m per MW, TPG in April 2025 buying 1.3GW at $3m per MW

So ironically, the above values suggest that while the development platform might wipe -5.8p from the NAV the current portfolio if it sells for $3m per MW (net of costs) would be worth $633m. Minus paying off the -$346m debt such a deal leaves SEIT with $287m or £215m which is an overall -2.9% haircut vs today’s NAV.

So the operating portfolio is worth MORE than its NAV on a read across basis.

That further assumes the Onyx development platform really is worth zero and essentially ceases trading in April 2026.

2.5 The Counter View

Of course the alternative explanation from that “heavy loses” detractor is that Onyx is a “landmine waiting to explode”.

How do energised solar panels and battery storage on a 20 year PPA which generate contracted returns explode? The detractor doesn’t explain his peculiar view. Just that EBITDA is “tiny” and the business is capital hungry. The business is building capital equipment and providing those at a retail rate below that of retail grid power (Solar Energy Assets and Power Storage). Surely that person understands that assets under construction do not generate EBITDA – which is the majority as at the 1H26 results.

So yes, there is initial capex, and a delay to seeing EBITDA results, it’s true. But once energised how capital hungry are solar and BESS assets? About $15 per KW per year consisting of monitoring, inspections, panel cleaning, inverter replacement and corrective repairs so for a 100KW rooftop system that’s $30k over two decades per MW.

Assuming 1500 MWh generation per MW and $100 per MWh that’s $150k per year or $3m. SREC adds $10 per MWh so $15k or $0.3m on top over 20 years. EBITDA is highly attractive at those rates.

Does a post-construction capex spend equal to 1% of revenue make Onyx’ operational portfolio “capital hungry”?! Remember we’re assuming no development at Onyx wiping -5.8p per share for no new development.

So as projects in construction are energised capex reduces to a tiny 1% trickle and yes it pays its own way. So the “landmine” is a little box that flaps up a little boom flag. Onyx becomes more boon than boom.

Why do you think Infrastructure Funds buy up these energised portfolios? They are hugely cash generative and you can apply leverage to generate substantial returns. Go and read the $ trillion dollar accounts of those large funds – I have.

3 Primary £222m or 20% of NAV

Nippon Steel has undertaken to invest $3bn into US Steel, Primary’s customer. Nippon is wholly reliant on the continuation of Primary to operate its US mill in Indiana. It is an essential asset.

We already established district heating is valued at 12X EBITDA+ and EBITDA is $40m implying a $480m GAV minus -$150m project debt implies $330m or £250m. So about 10% higher than the NAV.

At a -50% discount the market is valuing Primary as being worth £110m + £110m debt so 6.8X EV/EBITDA

That valuation makes no sense.

4 Driva £82m or 6% of NAV

There are several comparatives we can use.

4.1.Solör Bioenergy / E.ON Vallentuna (July 2025) – In mid-2025, Solör Bioenergy (a major Nordic aggregator) acquired the district heating network in Vallentuna (just north of Stockholm) from E.ON. This is ~67 GWh network serving 240+ customers. M&A Insights cited an implied EV/EBITDA multiple of 12.0x.

Vallentuna is geographically adjacent to Driva’s Stockholm-centric assets and shares the same “alternative pricing” model where prices are benchmarked against electricity costs.

4.2.Strängnäs Municipality (Solör Acquisition) – Though older (2021), this remains the anchor for municipal-to-private transactions in the Stockholm region. The deal was at EV/EBITDA Multiple: 11.4x.

Why Driva is Higher: Driva is a private platform (not a single municipality utility), which carries a “Private Ownership Premium.” As highlighted in the Lundin (2025) study on Swedish heating pricing, private firms charge roughly 7% more on average than municipal ones, leading to higher margins and, consequently, higher valuation multiples (12x–14x).

4.3. Stockholm Exergi (March 2026) is the “Giant” of the region (80% market share). Its 2025 Year-End Report (published March 2026) provides the secondary market data used to value Driva.

Projected EBITDA (2026): SEK 3.3bn – 3.5bn.

Enterprise Value (Market Derived): Based on recent private stake valuations (AP6/Ancala), the implied multiple for a premium Stockholm asset is 14.5x – 16.0x EBITDA.

BECCS Premium: A portion of this multiple is driven by Bio-CCS (Carbon Capture). Since Driva is smaller and more localized, it trades at a 2-3 turn discount to Exergi, placing Driva firmly in the 12.5x – 13x range.

Driva generated SEK84m in 2025 (annualising the 1H25 result). That’s £6.7m. Taking £82m NAV and £54m debt that’s a £136m GAV so a 21.9X EBITDA valuation.

Typically for regulated assets valuation is at 1.2x to 1.5x its regulated asset value.

But let’s assume 12X EBITDA and that EBITDA cannot grow from the £3.35m result in 1H25. That implies a -68% haircut and again assumes zero growth and zero valuation to the growth which we see at Driva’s website such as new wins in 2026 like Nordquist’s coffee facility

5 Oliva

Oliva’s EBITDA profits have varied between $6.2m (1H25 annualised) and $68.8m (FY23) and its base-load power is sought after in the current market. The £35m valuation implies a 0.7X to 7X EV/EBITDA.

It will be good to see the FY26 results to March 2026 to understand the outcome of the turnaround at Oliva.

6 Other Holdings (the Non-Top 5)

LEDs provided under a PPA to large corporates, co-gen, solar, BESS, EPCs, biomethane, energy saving – these aren’t unusual assets that are difficult to sell.

They are all valuable assets particularly in a world of higher energy prices. Year on year electricity is 20%-30% higher across most of Europe. With Data Centers and AI electricity is no longer dirt cheap in the USA either.

£250.7m NAV and £18m non-big 5 project level debt means an EV of £268.7m and £19.1m EBITDA is a 14X EV/EBITDA. Based upon read across from the recent sale of similar assets this is “about right”.

At a 50% discount £125m +£18m debt the market values this at £143m EV/EBITDA so at an EV/EBITDA of 7.5X.

7 Conclusion

Yes, you could potentially point to certain assets where a slight haircut to NAV is possible. And yes, there are going to be sale costs of a few percent, and yes perhaps in the interests of winding things up speed vs return will be balanced.

But there are plenty of proof points backing the majority of assets and clearly we are in a world in 2026 where energy has grown in importance.

There are plenty of asset realisation examples valued at at least 12X EV/EBITDA. Reasons to think more than 12X is possible too. Show me where sales are going through at 6X EV/EBITDA? You can’t, because they aren’t any.

Landmines? Fire Sales? Give me a break. Try putting together a serious case that backs up your view.

Sales may not materialise overnight and SEIT have not been able to rapidly sell assets until now, but deals are being done out there for assets not dissimilar to those held by SEIT. To describe them as having “no strategic value” reflects more on such people’s understanding of strategy than on the assets.

Do I regret picking SEIT shortly before the news of the wind down? Not at all. Bring it on. Meanwhile SEIT can continue to deliver a strong dividend although if they announce they are focusing on paying down the RCF I for one, won’t be displeased. Once the RCF is gone they could engage in vast buy backs and those or tenders will be hugely accretive given the 50% discount – or the 65% discount if you agree with the harshness of SEIT’s 9.7% discount rate.

Regards

The Oak Bloke

Disclaimers:

This is not advice – you make your own investment decisions.

Micro cap and Nano cap holdings might have a higher risk and higher volatility than companies that are traditionally defined as “blue chip”

Disclosures:

I have no commercial connection nor receive any remuneration from any company I write about.

Thanks for reading! Subscribe for free to receive new posts and support my work.

© 2026 The Oak Bloke
548 Market Street PMB 72296, San Francisco, CA 94104

Markets are very dangerous at the moment, as anyone investing is likely to see a loss of capital but for anyone starting out to acquire knowledge to build their Snowball, your Snowball should be different from the SNOWBALL, out of adversity comes opportunity.

As prices fall yields rise and as dividends rise, the yield you buy at should gently increase over time as long as you hold the share.

When you start your journey, the amount you can invest may be limited but compound interest takes a while to make a noticeable difference so that should be treated at a positive not a negative.

If you use the above table a dividend income Snowball yielding 7% would provide a retirement income of £21,474.00. Hopefully your yield could be higher, much higher.

Note: The last 5 years earns income nearly as much as the previous 20, one reason that a ‘retirement glide path’ is such a bad idea, if you have a dividend re-investment Snowball. If your Snowball is TR it might be a very good idea.

Using the 4% rule, the retirement income would be £12,270.00

Diversification.

Currently the SNOWBALL only invests in Investment Trusts as many currently trade at discount to NAV so the yield is enhanced. The Trusts currently held are from the Watch List updated most Saturdays although as the fcast income is ahead of the plan the SNOWBALL has bought some Trusts with a lower yield as a holding outside from the Renewable sector.

IF the price rises and the yields fall, the buying yield is still locked in but the earned dividends could be re-invested into ETF’s but that problem, as there are usually unloved sectors of the market, is not in the foreseeable future.

heads bet headsbet-br.comx Easdon24631@gmail.com 65.111.31.65

Have you ever thought about including a little bit more than just your articles? I mean, what you say is fundamental and everything. But imagine if you added some great images or video clips to give your posts more, “pop”! Your content is excellent but with pics and videos, this site could certainly be one of the greatest in its niche. Wonderful blog!

Tks for taking the time to post a reply. Investing for anyone’s retirement is a very serious endeavour as their Snowball has to outlive them to be worth the effort. Personally I’m not a fan of videos as the world is a wash with them.

The Market’s Panic Is Our Payday: 5 Cheap CEFs Yielding Up to 12.9%

Brett Owens, Chief Investment Strategist
Updated: April 10, 2026

We contrarians love a good panic. Dividends are on sale!

The closed-end fund (CEF) aisle is where we do our best bargain shopping. Wall Street ignores CEFs, creating obscurity that we feast on. Discounts, mispricings and high yields are here.

Why the bargains? CEFs routinely go on sale. Thanks to their low profiles, supply and demand imbalances routinely disconnect a CEF’s price from its underlying assets.

When the value swings heavily in our favor, we buy.

And we have some dandy discounts now, with some big divvies attached! These five yields have soared to levels between 6.3% and 12.9%.

Plus, they are trading at discounts up to 12%. Which means we can buy these assets for as little as 88 cents on the dollar.

General American Investors (GAM)

Distribution Rate: 10.8%

General stock-market volatility is likely to draw out some of that inefficiency I just mentioned, so let’s start with a couple broader-market funds.

General American Investors (GAM), for instance, is a large-cap growth CEF that has more than a quarter of its assets invested in the banged-up tech sector, as well as double-digit exposure to the reeling financial and consumer discretionary sectors. Top holdings such as Alphabet (GOOG), Microsoft (MSFT), and Berkshire Hathaway (BRK.A) have been down to downright dreadful so far in 2026.

While it targets growthier stocks, GAM is technically a “large blend” fund, so we can horse-race it against the S&P 500—and the fund’s managers aren’t afraid to, either. Here’s a look at the fund’s performance versus the venerable index through the end of 2025:

Source: General American Investors Fact Sheet

Consider this: Only about 10% of large-cap mutual fund managers have been able to beat the index over the trailing 15 years. GAM boasts a performance edge over the past half-century. That’s an enviable track record.

The real draw of General American Investors, though, is how we receive those returns. An S&P 500 fund today will only deliver a little more than 1% of its annual performance in the form of dividends; however, GAM’s distributions—which admittedly are taxed somewhat differently because of their makeup—would deliver closer to 11% based on today’s distribution rate.

But this is where we need to be careful about valuation. Yes, GAM currently trades at a discount of nearly 12% to its net asset value (NAV). In many cases, that would represent a screaming bargain—but over the past five years, GAM, on average, has traded at a 15% discount. So it’s a nominal deal, but a relative premium.

Liberty All-Star Equity Fund (USA)

Distribution Rate: 12.9%

A stock CEF with far better relative value is Liberty All-Star Equity Fund (USA)—the first of two 12%-plus yielders on my radar.

This is another “blend” fund, but unlike GAM, it tilts toward value. Its roughly 140 stock picks have been selected by five teams of managers—three value-oriented and two growth-oriented, reflecting its typical 60/40 value/growth split.

The top holdings include many of the blue chips names every large-cap fund seems forced to hold—Nvidia (NVDA), Alphabet, Microsoft—but it has also elevated names such as Capital One (COF), Charles Schwab (SCHW) and Fresenius Medical Care (FMS).

Like with GAM, the bulk of USA’s returns come from its massive distribution. Performance hasn’t been as good, but over the long term, Liberty All-Star Equity has been pretty competitive with the S&P 500. A modest amount of debt leverage (where the fund borrows money to invest even more in its pick) has generally led to amplified gains in up markets, but deeper dips in down markets.

But USA’s chart has gotten really interesting of late.

This Is a Big Deviation From Liberty All-Star Equity’s Norm

For a few months in the back half of 2025, USA seemed to completely disconnect from the market in a bout of severe underperformance. But part of that was an implosion in its valuation. USA has long traded roughly in line with its net asset value, but it’s currently trading at a 10% discount to NAV—about as big a sale as shares have offered in the past five years.

Calamos Strategic Total Return Fund (CSQ)

Distribution Rate: 8.4%

Let’s start to shift toward fixed income with the Calamos Strategic Total Return Fund (CSQ): a straightforward do-it-all CEF that owns both stocks and bonds.

Specifically, CSQ management is tasked with investing at least 50% of its assets in equities, and the rest in “convertibles and fixed-income securities deemed beneficial during periods of high volatility.”

But despite the current volatility, CSQ is plenty aggressive right now, featuring a roughly 65/35 blend of stocks and bonds. The equity side is about 115 stocks wide, concentrated in blue chips like Nvidia (NVDA), Apple (AAPL), and Eli Lilly (LLY). On the debt side, its 500-plus holdings include convertibles, corporate bonds, bank loans, and other fixed-income instruments.

It’s difficult to provide a long-term comparison against similar ETFs. That’s because most of the players in that space are global (read: U.S. and international) funds—like the iShares Core 60/40 Balanced Allocation ETF (AOR) illustrated below—while CSQ’s assets are virtually 100% U.S.-based. And historically speaking, domestic funds have a significant performance edge.

But long-term, CSQ’s stock-bond portfolio has been enough to even beat the all-stock S&P 500. That’s in part because CSQ’s liberal use of leverage, currently 30% as I write this, has helped super-charge bull-market returns.

But There Is a Tradeoff

“Balanced” strategies are expected to have lower volatility than an all-stock portfolio because of the fixed-income holdings. CSQ, however, is a much wilder ride than the S&P 500, let alone plain-vanilla allocation funds.

On the plus side, Calamos Total Return prioritizes a consistent monthly distribution—indeed, the payout has changed just five times since 2011, and all of those changes (including the most recent one, in 2026) were raises.

But perhaps the biggest deal is the big deal we’re getting on CSQ right now. The fund typically trades about 1% to 2% below its net asset value (NAV). Today? Its 10% discount means we’re paying 90 cents on the dollar for this broad portfolio.

BlackRock Muniholdings (MHD)

Distribution Rate: 6.3%

We’re getting a similar discount from a much different portfolio in the BlackRock MuniHoldings (MHD), which owns about 900 tax-advantaged municipal bonds.

About the only places we’re getting a 6%-yield from ETF-land is junk funds and emerging markets strategies. But here, we’re getting fat monthly checks from high-quality municipal debt connected to transportation, utilities, health, housing, school districts, and more. Some 80% of assets are investment-grade, and the majority of that is in bonds rated AA or above.

By the way, that yield is even better than the headline figure indicates. Remember: Muni income is exempt from federal taxation, and sometimes state and local depending on where the bondholder resides. MHD’s distribution isn’t always entirely made up of tax-exempt income, but off the cuff, someone in the highest (37%) tax bracket who also pays NIIT (3.8%) would likely need a yield of around 8.5% from taxable bonds to get the same amount of take-home income.

This isn’t necessarily a defensive income haven, however. The bulk of MHD’s holdings are also on the very long end of the maturity spectrum, with 70% of assets invested in bonds that mature in 20 years or more. Tack on a moderate amount of debt leverage, and we get a CEF that can really take flight—or careen into the ground. It all depends on the environment for munis.

It’s Better Than a Muni Index Long-Term, But Its Slumps Can Be Significant

Unsurprisingly, it pays to pay attention to relative valuation. On that front, MuniHoldings’ almost 11% discount to NAV is nice, but it’s not very wide compared to its five-year average discounts of about 9%.

There’s also the open question of how the fund fares without its longtime helmsman. Walter O’Connor, who worked in municipal bonds for four decades and managed MuniHoldings for roughly half that time, stepped down in March 2026. He’s succeeded by five managers that joined between 2022 and 2023.

Nuveen Floating Rate Income Fund (JFR)

Distribution Rate: 12.8%

Another monthly-paying bond CEF, Nuveen Floating Rate Income Fund (JFR), is an extremely “junky” portfolio of about 425 corporate floating-rate bonds. Only a little more than 10% of assets are allocated to investment-grade bonds, and those are on the bottom tier of BBB. Another quarter is in junk’s top drawer (BB), and the biggest slice of the pie (about 50%) is in B-rated debt.

Between that and heavy leverage of nearly 40% as I write this, we’re looking at a bond fund that swings big and yields big.

Floating-rate bonds feature variable interest rates that adjust periodically based off a benchmark rate, so they’re generally less productive in declining-rate environments, but they offer protection against rising rates. Rates still seem likelier to head lower than higher over the next year or so, but that’s not the relationship I’m most interested in.

Near the end of 2024, I warned that JFR was trading near the historical high end of its price spectrum. My chart at the time:

That thin discount yet again played out poorly for JFR.

But the Tables Are Turning in New Money’s Favor

Nuveen’s floating-rate fund now trades for a 12% discount, so we’re getting these bonds at 88 cents on the dollar. That’s a good deal cheaper than the fund’s five-year average discount of about 7%.

2026 Is a Mess. My Favorite 11% Dividend Can Help You Clean Up.

But if I’m going to take a swing on a double-digit yield, I’d prefer to do it on a fund that won’t be swimming upstream against the Fed.

Right now, one of my favorite home-run dividends is a heavily diversified, brilliantly built bond portfolio that yields 11% but is also set up for stock-like gains.

This fund checks off just about every income box I can think of:

• It pays a whopping 11% in annual income!
• It has increased its dividend over time!
• It doles out special dividends on the regular!
• And it pays its dividends each and every month!

On top of that, Morningstar previously named this fund’s manager a Fixed Income Manager of the Year. He’s been inducted into the Fixed Income Analysts Society Hall of Fame, too.

That’s about as good a resume as we’ll find, and his fund will pay us $1,100 for every $10K we invest.

Warren Buffett

March 2, 2026 

Berkshire Hathaway (NYSE: BRK-B) maintains a 9.32% stake in Coca-Cola. The holding company itself pays no dividend, preferring to reinvest earnings and buy back stock, yet generates significant dividend income across its equity portfolio.

How Much Buffett Is Collecting From Coca-Cola

Berkshire Hathaway owns approximately 400 million shares of Coca-Cola. With Coca-Cola paying an annual dividend of $2.04 per share, that stake generates roughly:

400,000,000 shares × $2.04 = $816 million per year

That breaks down to about $204 million every quarter flowing from Coca-Cola to Berkshire.

For a single stock position, that level of income is extraordinary. Coca-Cola has effectively become a steady cash-producing asset inside Berkshire’s portfolio, sending more than three-quarters of a billion dollars annually to the conglomerate without requiring Buffett to sell a single share.

The Power of Yield on Cost

Buffett’s long-term investment approach with Coca-Cola demonstrates the compounding power of dividend growth over decades. The stock’s market value has multiplied many times over, while the dividend growth illustrates the compounding machine Buffett built through patient capital allocation.

Coca-Cola has raised its dividend for 63 consecutive years, earning Dividend King status. The most recent increase came in 2025, when the quarterly payout rose 5.2% from $0.485 to $0.51 per share. Over the past five years, the dividend has climbed from $1.60 in 2019 to $2.04 in 2025 – a 27.5% cumulative increase.

The SNOWBALL pays no dividend, preferring to reinvest earnings and buy back stock, yet generates significant dividend income across its equity portfolio.

If you think that you know better than W.B. and Benjamin Graham. GL

If you look at the chart of CTY, the long term direction is up, with inflation it will always be so. The market downturns are shown, which you have to sit thru. Better if you can add cash to the Snowball but for this example it’s only the earned dividends that are re-invested.

Looking at the chart and especially during the covid crash, you will see the share price follows the NAV of its constituent holdings. Whilst unpleasant, out of adversity comes opportunity.

Trading tip: watch the NAV not the price.

You decide to stick to your plan and simply trade the adversity and re-invest your dividends, therefore earning more dividends every year to either re-invest or to use in your retirement.

When the price is high and therefore the yield is lower, you could re-invest the dividends in the higher yielding shares in your Snowball.

The example share used is CTY which is a Dividend Hero and therefore one of the safest shares in the Investment Trust universe. CTY has reserves to pay their dividends in times of extreme market stress, which they have had to use three times in their long history but no dividend is entirely ‘safe’.

You did not have to take a big gamble with your hard earned, just to be in the right shares and do nothing.

The current yields maybe too low to include in your Snowball, unless you pair trade it with a higher yielder and still earn a blended yield of around 7%

Before we go back to the future and look at CTY during the covid crash, looking at the return on capital, investing is going to get a lot more difficult, maybe that could explain the latest interest in buying shares that pay a dividend as that may make up most of any returns.

The dividend was 19p, so when the price was 440p the yield was 4.3%.

After the price fell to 300p the yield was 6.3%, without the benefit of hindsight you had no way of knowing if the price was going to continue to fall but you could have bought the yield, as the intention was to hold forever.

The current dividend has gently risen to 21.6p, a yield on buying price of 7%, which should continue to rise as long as you hold the share.

You would have also achieved the Holy Grail of Investing, in that you could take out your stake, invest in another high yielder and continue to earn income on a share that sits in your Snowball at zero, zilch, cost.

Everything crossed for another market crash ?

A picture conveys a thousand words, the chart shows what turned out to be a blow out top and captures the market retrace.

The Trust owns numerous Investment Trusts that pay a dividend, so diversification away from Renewables.

The current yield is 6% and because the yield is one of the safest in the market it normally trades at a small premium, also the spread can widen.

Although a boring Trust, as traded volumes are low, it still captured a lot of last year’s price action and rose 29%, although the intention is to hold forever you could have taken out your profit and invested in another higher yielder in your Snowball.