High-yielding trust Foresight Environmental Infrastructure (LON:FGEN) generated a net asset value (NAV) total return of 6.2% for FY26. The resilient renewable energy fund delivered positive NAV growth across all four quarters of the year.
Despite what outgoing chair Ed Warner described as ‘broader market challenges’, FGEN’s NAV held up well at 105.2p (FY25:106.5p). The solid results showcased the benefits of FGEN’s portfolio diversification and investments in some growth assets.
Income investors should also note FGEN met its FY26 dividend target of 7.96p, with dividend cover healthy at 1.25 times. Moreover, the fund reaffirmed its FY27 dividend target of 8.04p. That represents a prospective dividend yield of 9.8% and means FGEN is on track for its 12th year of uninterrupted dividend growth.
One-stop shop appeal
Currently trading at a wide NAV discount, this quarterly dividend payer is the best five-year share price total return performer in the struggling AIC Renewable Energy Infrastructure sector.
Renowned for its resilience, we consider FGEN a one-stop shop for environmental infrastructure exposure. Focused on the UK and mainland Europe, the portfolio is diversified across wind and solar assets, as well as anaerobic digestion, biomass, energy-from-waste and hydropower.
| 5-yr share price total return | Discount to NAV | |
| Foresight Environmental Infrastructure | 23% | -21.4% |
| Greencoat UK Wind | 14.9% | -21.7% |
| Foresight Solar | 12.8% | -26.2% |
| Bluefield Solar Income | 7.5% | -14.1% |
| VH Global Energy Infrastructure | 2.2% | -30.1 |
Source: The AIC/Morningstar
Portfolio EBITDA was £82.2 million in FY26, while portfolio cash generation was £78.6 million, some 2.3% ahead of budget.
Why Winterflood is bullish
Winterflood’s Ashley Thomas said the results demonstrated the ‘attractive qualities of FGEN’s diversified portfolio, delivering another period of positive NAV total return growth, above budget generation, conservative gearing, strong cash generation and value accretive initiatives such as the follow-on investments and life extensions.
‘Despite these strong qualities, FGEN trades at a NAV discount of 22%, broadly in line with its Renewable Energy Infrastructure peers (26%) and with a prospective dividend yield of 9.8%.’
We are fans of FGEN, which has consistently grown its dividend since IPO in 2014. The trust offers a high-yield play on an energy transition that continues to gather pace.
FGEN has a reassuringly diversified portfolio, spanning renewable energy generation, other energy infrastructure, and sustainable resource management initiatives across the waste and wastewater sectors. Among other advantages, this diversified approach means the fund is significantly de-risked from weather variability.
Learn more about the trust here: https://www.fgen.com/
