NextEnergy Solar Fund says its board has approved a maintained dividend target of 8.43p per share for the financial year ending 31 March 2026. This is forecast to be covered in a range of 1.1x – 1.3x by earnings post-debt amortisation and the company can be reasonably comfortable making this prediction because there is a high degree of earnings visibility. As of 15 May 2025, forecasted total revenues for the year ending 31 March 2026 were 94% fixed through its RPI-linked government-backed subsidies and the company’s active power hedging strategy.

The trust’s first dividend (for the year ended 31 March 2015) was 5.25p, reflecting the immaturity of the portfolio. In its second year this jumped to 6.25p and the dividend has risen every year since, until now.

The board highlights that the dividend target offers an attractive 12%+ fully covered dividend yield currently, representing one of the largest dividend yields in the FTSE 350.

[QD comment – JC: We think that this makes perfect sense in the current environment. New investors are seemingly not being attracted to the shares by the outsized dividend yield, which implies that there would be no benefit to the rating from an even higher yield. Given that, why not divert cash flow to buying back stock instead.]

NESF : NextEnergy Solar will maintain its dividend