The Renewables Infrastructure Group Limited (TRIG.L), listed on the London Stock Exchange, stands as a significant player within the renewable utilities sector. With a market capitalisation of $1.91 billion, the Guernsey-based company has carved out a niche by specialising in infrastructure investments focused on renewable energy, particularly onshore wind farms and solar photovoltaic parks across the UK and Northern Europe.
Current market dynamics present a complex picture for TRIG.L. The stock is trading at 78.8 GBp, near the lower end of its 52-week range of 70.50 to 105.40 GBp. Despite the recent price decline of 0.70 GBp, representing a marginal dip of 0.01%, the stock’s potential remains intriguing for investors, particularly those with an eye on dividends.
One of the most compelling aspects of TRIG.L is its dividend yield, currently standing at an attractive 9.40%. This is significantly higher than many peers in the sector, making it a lucrative option for income-focused investors. However, the sustainability of this yield could be questioned, given the staggering payout ratio of 3,547.50%. Such a high payout ratio suggests that dividends are being paid from reserves or through borrowing, raising concerns about long-term viability unless earnings improve.
The financial performance metrics further illuminate the challenges faced by TRIG.L. With an EPS of -0.05 and a negative Return on Equity of -3.82%, the company’s profitability metrics are less than stellar. The absence of a price-to-earnings ratio and negative free cash flow of -£108.9 million indicate that the company is currently not generating sufficient earnings. This lack of profitability is a critical consideration for investors evaluating the risk-reward profile of the stock.
Despite these hurdles, analyst sentiment towards TRIG.L leans positively. With five buy ratings and no sell ratings, there is a degree of optimism surrounding its future prospects. The average target price of 111.00 GBp suggests a potential upside of 40.86%, a figure that could entice investors willing to bet on a turnaround.
On the technical front, the 50-day moving average of 75.60 GBp signals a potential short-term support level, while the 200-day moving average at 88.42 GBp underscores the current undervaluation relative to longer-term trends. Additionally, the RSI (14) of 44.37 suggests that the stock is neither overbought nor oversold, positioning it neutrally from a momentum perspective.
Investment in TRIG.L offers a blend of high dividend yield and potential capital appreciation, albeit with accompanying risks associated with its current financial performance. For those with an appetite for the renewable sector and its long-term growth potential, TRIG.L presents a unique opportunity to gain exposure to a diversified portfolio of renewable energy assets across Europe. However, prospective investors should weigh the sustainability of its dividend payouts against its earnings prospects and the broader economic landscape affecting the renewable energy market.
