Down 45% in 5 years, this UK stock now offers a nice dividend yield of 11%!
Image source: Getty Images
What is the dividend yield forecast of more than 11% for the stock? It immediately makes me think that income investors need to take a closer look. But I also remember that an unusually high dividend yield can mean something has gone wrong.
What am I talking about? Renewable Infrastructure Group (LSE: TRIG), although I’m not sure anything really bad has happened.
What’s going on?
The company describes itself as “a FTSE 250 investment firm targeting strong income and long-term capital growth from a highly diversified, cash-generating portfolio of renewable infrastructure assets.That includes onshore and offshore wind farms, solar installations, and battery storage projects in the UK and across Europe.
As of December 2025, the investment trust had a reported net asset value (NAV) per share of 104p. At a share price of 68p at the time of writing, that means a massive 35% discount to NAV.
If a stock appears to be undervalued, it can be an opportunity to repurchase shares. And that is exactly what is happening right now. With the FY 2025 results in February, management announced a new £150m share buyback plan.
Oh, and the board reiterated its dividend target of 7.55p in 2026. That’s 11.1% of the current share price.
What you can watch
Watch out, related stories remind you of possible dark clouds. I am thinking of one of the FTSE 250 investment trusts SDCL Efficiency Income Trustthis month announced that it is ending.
The debt has risen above the limit you have set. And efforts to reduce gear by selling assets were failing. The trust could not come close to estimated book values. It doesn’t seem to be a seller’s market for energy related services at the moment, except maybe oil.
By the end of 2025, Renewable Infrastructure had a total debt of around £2bn. And the stock market share is only around £1.6bn. At least the overall debt isn’t that high, so I’d hope this one doesn’t come back to bite investors.
But should it be a future dump, could that December NAV amount be considered? And could the discount suddenly look less attractive?
During the FY, Chairman Richard Morse spoke “a challenging year hampered by policy uncertainty, lower wind resources and lower energy price forecasts, all of which weighed on the company’s ratings.“.
A bright idea
Forecasts show a positive outlook, with earnings per share growing slowly through 2028. And we might be looking at a price-to-earnings (P/E) ratio of just 8.5 during that time. One quick caveat comes up, mind you.
Analysts do not expect the dividend to be paid out of earnings in 2026 or 2027. And in 2028, we will see only a small cover. However, we are not in a good time to get more energy right now, and the short-term feeling is weak.
Part of the company’s core values are “to restore the profit margin to historical levelsAnd if the next few years go as expected, this could be something to consider before the next shift in global energy politics – which is due.
