But an announcement has yet to take place. And now investors will need to wait until 9 November before knowing whether they would be getting their hands on the proceeds of the sale.

Fledging share price

An announcement in favour of special dividends or share buybacks could have a big impact on SSE’s flagging share price. Amid concerns about falling wholesale energy prices and intense competition in the retail market from smaller challengers, such as the likes of First Utility, Ovo Energy and Good Energy, shares in SSE have gained just 3.5% year-to-date, compared to an 11.9% rise in the FTSE 100.

SSE is selling its stake in the distribution network to focus on higher growth parts of its business. As gas demand in the UK has fallen by around a fifth over the past decade, management believes better growth prospects lie with its regulated electricity networks. Meanwhile, strong global investor demand means valuations are ripe for the company to realise value on its past investments.

What’s more, the sale still leaves SSE with an RAV of more than £7bn. And this is expected to rise to £10bn by 2020, given planned investments in its electricity distribution network. This implies that, going forward, more than half of the group’s profits would still come from the more stable regulated businesses. This would help the company to reduce the earnings volatility coming from its power generation and retail businesses.

Unless wholesale energy prices deteriorate markedly, SSE’s regular dividends seem sustainable given its dividend cover of 1.3 times. The utility currently yields 5.7%, and has also pledged to raise its dividends annually by at least RPI inflation.

Similar move

In a similar move, National Grid (LSE: NG) is looking to sell a majority stake in its own gas transmission network. Worth up to £11bn, the sale could lead National Grid’s shareholders to get a windfall which would dwarf any payout that SSE shareholders may get.

Due to the much greater size of National Grid’s gas distribution network, city analysts expect part of the proceeds would be used to pay down some of the group’s debts, with the remainder being used to fund a special dividend or share buybacks.

The last time National Grid embarked on a massive share buyback programme was back in 2007-8, when it returned £1.8bn in cash from the sale of its UK wireless business. Personally, I think this indicates a share buyback would be the company’s preferred method of returning cash to shareholders this time as well. After all, buybacks reduce the company’s outstanding share count, which would cut the cost of paying dividends in coming years.

Shares of National Grid have significantly outperformed those of SSE — they’re up 12.5% in the year-to-date and currently yield 4.1%.

The post Are NG and SSE set to return more cash to shareholders? appeared first on The Motley Fool UK.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Strengthening oil

Shares in Royal Dutch Shell (LSE; RDSB) have picked up 32% since 20 January, yet even after that the predicted dividend for the year to December would still yield a massive 7.7%. Trouble is, it would be little more than half covered by earnings, and in usual times that could suggest a high risk that it wouldn’t actually happen. But these aren’t usual times.

Shell’s earnings are expected to bounce back in 2017, and the mooted dividend for that year would be just-about-covered. Shell also has plenty of cash to maintain its dividend during the oil downturn, and the recovery to above $50 is increasingly suggesting the long-awaited strengthening is on the way. In fact, Bob Dudley at BP reckoned at the start of the downturn that we could see cheap oil for two or three years, and it looks like he’s turning out to be right.

BP has also committed itself to keep its dividend going in the short term, and all the signs are suggesting Shell is likely to do the same.

Risky bank?

I wish I could be as confident about the 7.6% yield currently on the cards from HSBC Holdings (LSE: HSBA), but with forecast earnings for this year suggesting cover of just 1.2 times, rising only to 1.3 times based on 2017 predictions, I see it as risky.

Yet the tide could be turning for HSBC. It’s suffered from escalating operating costs in recent years, but they’re coming under control and we should see improved cost-cutting over the coming year.

Then there’s China, of course, and HSBC’s massive exposure to that economy. But the latest oil demand figures from China were encouraging, and it seems increasingly likely the slowdown won’t be as deep or as long as many had feared. And in the longer term, the future for China is surely bright — and there should be significant profits to be made there.

I do think there are better, and safer, bargains to be had in the banking sector — but with HSBC shares down 28% over 12 months to 450p, we could be close to the bottom.

The safest?

Then we come to the perennial cash cow that is SSE (LSE: SSE), and the 6% yields predicted for the electricity and gas supplier. The cash would only be covered around 1.3 times by earnings per share, but for a sector that enjoys high visibility in terms of costs and revenues, that looks plenty safe to me.

Competition from smaller suppliers is hotting up, but the dents in SSE’s customer numbers are actually relatively small. And though there’s a small fall in earnings forecast for the year to March 2017, the following year should see that reversed if the analysts have got it right.

SSE is one of the few companies whose business is almost entirely in the UK, and that makes it a nice safe investment in the event of a Leave result from the EU referendum. Very few other UK companies are likely to get off lightly. With SSE shares having lost 7% over the past 12 months to 1,539p, we’re looking at a forward P/E of 13-and-a-bit… and that seems cheap to me.

The post Are super dividends at Royal Dutch Shell plc, HSBC Holdings plc & SSE plc secure? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended BP, HSBC Holdings, and Royal Dutch Shell. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

First-half results should be with us on 10 May, but will that help settle the nervous jitters? Although there’s a slowing of growth on the cards with an EPS rise of only 5% forecast, easyJet’s March statistics showed a 4.3% rise in passenger numbers over the same month a year previously, and a 7.2% rise in the rolling 12-month count.

Even if this year doesn’t beat that 5% growth prediction, the further 15% EPS rise forecast for 2017 would drop easyJet’s P/E to under nine! Some safety factor is justified due to the inherent risk with airlines, but easyJet shares just look too cheap to me — especially with very well-covered dividend yields of 4% and 4.8% pencilled-in for the next two years.

Steady cash

Speaking of dividends, the cash cow that is SSE (LSE: SSE) is set to deliver full-year results on 18 May, and we should be seeing an inflation-beating rise in the annual cash payment once again — and with the shares at 1,505p, the yield should reach 6%.

That’s not a flash in the pan either, as SSE has been consistently handing out yields around that level for years, in line with its policy of maintaining dividend rises “of at least RPI inflation“. This year’s should be safe, as the company has already confirmed it at the halftime reporting stage in January.

EPS growth should continue in single-digit percentages, and that’s enough to keep SSE shares on a P/E of only around 13.5. That’s below the FTSE average, with dividend yields around twice the average. SSE shares seem like a must-have for any diversified portfolio.

A rising dividend star?

Also on 18 May, we’ll be getting full-year results from Burberry (LSE: BRBY). Earnings growth at the fashionista has been slowing dramatically, from double-digits a few years ago, to just 2% last year — and we even have an 8% fall expected for the year just ended in March. A lot of that is down to China, which is a big market for Burberry clobber, and the wealthy there have been tightening their fashionable Burberry check belts in line with that country’s slowdown and a bit of an austerity drive.

Burberry shares have responded with a 36% fall since late February 2015, to 1,185p, but that could be a bit of an over-reaction. Longer term, Burberry’s market should continue to thrive, with forecasts suggesting a return to decent earnings growth by March 2018.

In the meantime, Burberry’s dividend has soared from 20p per share in 2011 to 35.2p in 2015 — and though rises are set to slow in line with earnings, they should still beat inflation and should give us a yield of 3.3% for 2018.

The post 3 Hot Shares for May: easyJet plc, SSE PLC & Burberry Group plc? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The companies that provide our gas, water and electricity enjoy a very predictable business. Demand doesn’t vary too greatly, and by taking on long-term energy contracts they can avoid surprises on the cost front, too. And that makes steady predicable dividends that much easier.

Look at National Grid (LSE: NG). It’s been lifting its annual dividend year after year, and offered shareholders a yield of 5% last year. Earnings are expected to only grow slowly over the next few years, but we still have steady dividend increases on the cards that would yield 4.6% for the year to March 2016, with forecasts lifting that to 4.8% by 2018 — the yield has dropped a little because the share price has risen 12% over the past 12 months, to 963p.

Those yields would be covered around 1.4 times by earnings, which is pretty strong for the utilities sector, and National Grid says it should be able to boost its annual cash payment at least in line with RPI inflation for the foreseeable future.

Biggest dividend

Over at electricity supplier SSE (LSE: SSE), we’re looking at even better dividends, with a yield of 5.9% paid in 2015 and with 6.3% forecast for this year on shares priced at 1,457p. That would be a little less well covered at 1.25 times, but it’s still reasonable for a utility firm. The share price hasn’t done much over the past five years, putting on just 17%, but that’s still ahead of the FTSE and those 6% dividends are around twice the long-term FTSE average.

SSE has the same dividend policy as National Grid, too, and at interim time told us it expects to increase its 2015/16 full-year dividend at least in line with RPI inflation — and it is targeting the same thereafter.

Water firm United Utilities (LSE: UU) actually has a couple of years of falling earnings forecast — 11% this year and 2% next. But analysts are expecting an 8% uptick for the year to March 2018, and in the long term the firm’s earnings should be solid. Perhaps unsurprisingly, United Utilities also has the same target of at least matching RPI inflation with its dividends, and in its first-half update said it expects to manage it at least until 2020.

With the shares at 894p, that would mean yields of 4.2% this year, rising to 4.4% by 2018, with cover of around 1.2 times. It’s looking like the weakest dividend of the three, but by way of compensation the share price has put on 57% over the past five years, easily beating the FTSE’s meagre 6%.

Long-term wealth generation

You’re not going to get the white knuckle ride that turns a lot of potential investors away from shares (and, on the other hand, excites a good few too), but safe investments like these three should help your ISA perform very well over the decades — and putting the cash into shares will almost certainly beat the pants off any cash ISA.

The post National Grid plc, SSE PLC And United Utilities Group PLC Could Be Good For Your ISA appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Super yield

Look at SSE (LSE: SSE), which is a big favourite among high-yield investors. It’s been offering up dividend yields of close to 6% for years, and for the year to March 2016 there’s a 6.5% yield forecast, with similar on the cards for the next two years — a share price that has dropped 16% since May last year to 1,433p has helped boost that percentage.

The problem is, there’s a 9% fall in earnings per share predicted for this year, followed by zero change for each of the next two years. In 2015 we saw dividend cover of 1.4 times, but that would drop to just 1.25 times on this year’s forecasts, and a shade less by 2018.

In its January trading statement, SSE reiterated its intention of “targeting an increase in the full-year dividend for 2016/17 of at least RPI inflation, with annual increases thereafter of at least RPI inflation“.

So we’re probably safe for this year and next, but if earnings don’t start picking up again, it won’t be sustainable for ever.

More erratic

Dividends at gas supplier Centrica (LSE: CNA) have been less stable, with a couple of years of falling earnings leading to a 21% dividend cut in 2014 followed by another 11% in 2015. There’s a further 9% decline in earnings currently forecast for the year to December 2016, yet the City folk are expecting the dividend to be lifted a little to yield 5.8% on today’s 226p shares — and with only a 1% EPS gain penciled in for 2017, they’re expecting a further dividend boost to 6%.

That would give us dividend cover of around 1.3 times this year, dropping to 1.26 times next. Again, I find that cutting it a bit fine, and Centrica has made less of a commitment to dividend growth having merely said in February’s full-year report that its progressive dividend policy is “tied to confidence in underlying operating cash flow“.

Again, probably safe, but by no means certain.

The safest?

The National Grid (LSE: NG) share price has bucked the trend, being the only one that has gained in the past 12 months — albeit a modest 8% to 947p. The potential dividend yield is the lowest of the three, with a relatively modest 4.5% (still way ahead of the FTSE 100 average) expected for the year to March 2016, blipping up a little to 4.7% by 2018.

But the nice thing is that National Grid’s dividend should be a bit better covered than the other two, with the 5% EPS rise forecast for this year taking it to 1.4 times. Admittedly, the next two years with a suggested EPS rise of only 2% in total would drop that cover to 1.35 times, but that would still be ahead of the pack.

National Grid’s dividend is probably the safest of the three, but the lesson that we should not be complacent is a welcome one.

The post How Safe Are Dividends At SSE PLC (6.5%), Centrica PLC (5.8%) And National Grid plc (4.5%)? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Barclays and Centrica. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Tumbling price

Aberdeen Asset Management (LSE: ADN) has seen its share price tumble by 46% over the past 12 months, to 235p, although it has recovered 11% in the past week or so. With earnings of 19.8p per share forecast for the year to September 2016, we’re looking at a potential dividend yield of 8.4% — although EPS would be falling and the dividend would be only around 1.2 times covered.

Aberdeen’s problem is its heavy investment in developing economies, with the Chinese slowdown causing it considerable grief. A quarterly trading update on Wednesday told us of net outflows of £9.1bn, although that was an improvement on the £12.7bn outflow the previous quarter — and to put it into perspective, assets under management actually rose a little to £291bn.

Chief executive Martin Gilbert, while speaking of “structural imbalances of the global economy and the cyclical slowdown in emerging markets, as well as the impact of falling oil and commodity prices“, did at least say that “we are well placed to navigate the current difficult market conditions offering a wide range of investment capabilities for investors“.

I feel Aberdeen’s dividend might well not match current forecasts, but it should still provide decent long-term yields.

Cash from energy

The big question for electricity and gas supplier SSE (LSE: SSE) is whether its dividends will provide the 6.2% and 6.4% yields currently forecast for the years to March 2016 and 2017 respectively. A third-quarter update released Thursday suggests it will, with the company telling us it “still expects to report an increase in the full-year dividend for 2015/16 that will at least be equal to RPI inflation” and that it plans to do the same again the following year.

The shares picked up a fraction in response, up 11p to 1,443p as I write, and that puts them on forward P/E multiples of around 12.5 for the two years, with adjusted earnings per share of “at least 115 pence” indicated for this year — slightly ahead of the market consensus. And that comes despite SSE’s plan to cut household gas prices by 5.6% in March — there are some benefits to a falling oil price.

All in all, times are “challenging“, but SSE still seems like a solid long-term income investment to me.

Emerging markets

The emerging markets problem also lies behind the woes at investment manager Ashmore Group (LSE: ASHM), which has seen 26% knocked off its share price in the past 12 months, to 214p — although, again, we’ve seen a modest 9% recovery in the last week. That’s pushed the potential dividend yield for the year to June 2016 up to a heady 7.9%.

But before you go rushing to buy, a forecast 23% fall in EPS would mean that won’t be covered by earnings, which would come in a little short.

In its second-quarter update, the firm reported a $1.17bn fall in assets under management due to outflows. In the short term, China is going to hurt, but chief executive Mark Coombs did speak of the possibility of “…very good performance in emerging markets assets as their attractive fundamentals begin to show through“.

Will the forecast dividend be met? I don’t know, but I still see a decent longer-term possibility here.

The post Can Dividends At Aberdeen Asset Management plc (8.4%), SSE PLC (6.4%) And Ashmore Group plc (7.9%) Get Any Better? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

With UK wholesale energy prices having tumbled to a five-year low, we could be looking at a great time to lock-in some long-term dividend income, even if the energy firms are under pressure to cut prices further.

Look at Centrica (LSE: CNA), for example. Its shares have lost 20% over the past 12 months to 208p, and 36% over two years. But for income seekers, that’s helped push the expected dividend yield for the year just ended to 5.7%, with a hike to 5.9% on the cards for 2016, even though in cash terms it’s fallen from 2013’s peak of 17p per share to an expected 12.4p in 2016. The dividend looks reasonably well covered too, with cover by earnings of around 1.4 times.

Whatever fads and fashions come along in investing, it’s the companies providing essential services that are the most reliable over the long term. And energy suppliers, which have clear longer-term visibility of their likely income streams, should be among the steadiest of dividend payers.

Beating inflation

The same is true of National Grid (LSE: NG), which has been paying dividends of 5% and better for years, with a policy of raising them every year at least in line with RPI inflation. With the share price having picked up in the past six months to 926p, the forecast yield for the year to March 2016 currently stands at around 4.8%, with a rise to 5% predicted for the year after.

Cover by earnings is similar to Centrica’s, standing a little below 1.4 times, and that should be ample.

To see the real long-term value of an investment in National Grid, if you’d bought the shares five years ago you’d be sitting on a very nice 74% price gain today. And you’d be set to enjoy effective dividend yields, based on your original purchase price, of 8% this year and 8.25% next.

The highest

There’s an even bigger potential yield up for grabs from SSE (LSE: SSE), with 6.3% pencilled-in for the year to March, increasing slightly to 6.4% in 2017. Again this is a company with a policy of lifting its dividend at least in line with RPI inflation, and again we’re seeing adequate cover by earnings. It’s a little lower at slightly less than 1.3 times, but that’s good enough.

Earnings at SSE have only been growing relatively slowly and we have a small fall expected this year followed by a modest recovery the year after. But as a steady cash cow providing regular high income, it’s looking like a solid investment to me.

The post Why Centrica PLC (5.9%), National Grid plc (5%) And SSE PLC (6.3%) Are Still The Best For Dividends appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Centrica. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Look at Rio Tinto (LSE: RIO) for example. Like the rest of the mining sector its shares have been battered by the commodities slump and have lost 41% in the past 12 months, to 1,761p. Profits are plunging too, with the firm expected to report a fall in earnings per share (EPS) for 2015 of close to 50% — and analysts are forecasting a further 15% drop in 2016.

But despite a need for financial discipline in such tough times, Rio upped its first-half dividend by 12%, and is expected to pay a 7.1% yield for the year just ended — and on top of that, forecasts suggest 7.3% for 2016!

And at the same time as handing over these levels of cash, Rio is also engaged in a $2bn share buyback programme, while competitor Glencore is slashing its dividend and is raising cash. Is this a demonstration of supreme confidence in Rio’s future, or is it madness? The world’s turned upside down, I tell you.

Invest in Asia?

Shares in Aberdeen Asset Management (LSE: ADN) have shed 51% since April’s peak, to 250p, as fears over its focus on Asian markets have led to net ouflows from funds under management of £34bn in the year to September 2015. But the firm upped its dividend by 8.3% to 19.5p per share, from 18p a year previously, as part of its progressive dividend policy.

Whether that progressive policy can continue into 2016 is open to question, and while analysts are forecasting a rise to 19.8p to yield 6.5%, that would be less than 1.2 times covered by earnings if EPS falls by the predicted 24% this year. I like progressive dividends, but in the face of falling earnings some caution is called for, and I reckon investors should definitely not consider rises in Aberdeen’s dividend over the next few years as a given.

Electric dividends

Utilities companies are pretty much a byword for steady dividends these days, and SSE (LSE: SSE) is no exception. The energy supplier has been serving up yields of close to 6% for years, and at interim report time in November, chairman Richard Gillingwater told us that “this business is well-placed to continue to deliver annual dividend growth of at least RPI inflation“.

The SSE share price has actually dipped 7% over 12 months to 1,483p, and that’s helped push the prospective dividend yield as high as 6.3% for the year to March 2016, followed by 6.4% a year later. Remember not that long ago when Ed Miliband was threatening to clamp down on energy suppliers? Ed who?

The energy companies continue to be great long-term dividend providers, and they will surely form the cornerstones of many an income portfolio for years to come.

The post How Real Are Big Dividends At Rio Tinto plc (7.3%), Aberdeen Asset Management plc (6.5%) And SSE PLC (6.3%)? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

I admit that not everyone would be excited by a gift from the stock market, but I’d certainly be very happy to receive a few shares of Barclays (LSE: BARC) and National Grid (LSE: NG) stock to tuck away in my SIPP.

Here’s why.

Barclays, better times ahead?

It’s been a long time coming, but 2016 could be the year when Barclays starts to deliver the goods for value investors.

As we approach the end of the year, analysts expect that Barclays’ 2015 earnings per share will rise by 31% to 22.7p, putting the bank’s stock on a forecast P/E of just 9.8. Earnings momentum is expected to continue too. Consensus forecasts suggest a 17% rise in earnings to 27p per share for 2016. That implies a 2016 forecast P/E ratio of just 8.3 at today’s share price.

Barclays’ cheap P/E rating is backed by a dividend yield that is expected to rise from 3.0% for the current year to 3.8% in 2016.

Finally, the shares currently trade at a tasty 23% discount to their tangible net asset value of 289p. To me, this suggests a reasonable margin of safety is in place against the risk of further impairments on bad debts or asset sales.

One final fact that may tempt you to buy Barclays is that the firm’s new chief executive, American Jes Staley, purchased £6.5m of shares in the bank with his own cash shortly before he took up his new position on 1 December.

National Grid, omens are good

Although National Grid’s dividend yield of about 5% is fairly standard for a utility stock, what’s not so usual is the way the firm’s shares have performed since 2009.

Shares in the National Grid, which has operations in the UK and the US, have risen by 66% over the last five years. By contrast, shares in SSE are up by just 28% and Centrica stock is worth 35% less than five years ago.

It’s clear that National Grid has outperformed. Can this continue? The omens are good. The group’s UK business is not exposed to energy prices or grandstanding political pressure in the way that the customer-facing utility businesses such as British Gas are.

The group’s shares offer a 4.8% prospective yield from a dividend payout that the firm expects to increase in line with inflation for the “foreseeable future”.

However, National Grid is also planning to sell its UK gas distribution business, which is valued at £11bn, and return the majority of the proceeds to shareholders. This could deliver an attractive cash bonus for shareholders.

The other benefit of this disposal, according to the firm, is that by removing this slow-growing part of the business, the group’s overall growth rate will increase.

I rate National Grid as a ‘hold forever’ income stock, with the potential for further long term capital gains.

The post Are Barclays PLC And National Grid plc The Perfect Stocking Fillers? appeared first on The Motley Fool UK.

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Roland Head owns shares of Barclays and SSE. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

In addition, Greenko has announced a non-binding heads of terms for the sale of its stake in Greenko Mauritius for just under £163m to an affiliate of the Government of Singapore Investment Corporation. The sale of the stake would mean that Greenko disposing of its trading activities and assets which are made up of the ownership and operation of clean energy products in India. While talks are at an advanced stage, there is no guarantee that the sale will be agreed but, it if is, then Greenko expects to distribute the proceeds to its investors.

Clearly, the performance of Greenko’s shares in 2015 has been hugely disappointing, with them being down by 46% since the turn of the year. As a result, it now trades on a much lower price to earnings (P/E) ratio of 9, which indicates that its shares are very cheap. Certainly, today’s profit warning means that the 16% growth in earnings that had been expected for the current year is unlikely to be met but, even if the current year does disappoint, the strong outlook for clean energy in India remains relatively upbeat and, with such a low rating, Greenko could be an enticing purchase for less risk averse investors.

Of course, there are other options within the electricity sector. Notably, SSE (LSE: SSE) offers relative stability and, unlike Greenko, pays a great dividend. In fact, SSE currently yields a whopping 5.8% and, with dividends forecast to rise by 2.8% next year, it is likely that their growth will beat inflation over the medium term.

Furthermore, SSE is expected to increase its earnings by 6% next year which, for a utility company, is very impressive and is roughly in-line with the growth rate of the wider index. Despite this, SSE trades on a relatively appealing P/E ratio of 13.9 and this indicates that its shares are well-worth buying and, alongside their stable outlook, are more appealing than smaller peer, Greenko.

Meanwhile, Drax (LSE: DRX) continues to endure a very challenging outlook as it transitions from being a coal-fired power station to one fuelled by biomass. The change, though, is rather painful, with the company’s earnings falling in each of the last four years and being expected to do the same in the current year and next year, too. As such, it seems likely that investor sentiment may decline and put the company’s share price under further pressure, with it having fallen by 31% since the turn of the year.

Clearly, Drax has significant potential to be a key part of the UK’s energy mix via biomass. However, with its shares trading on a forward P/E ratio of 48, there seems to be little value in its shares at the current price. As a result, it seems to be one to watch, rather than buy, at the present time.

The post Greenko Group PLC Slumps 9%: Is It A Better Buy Than SSE PLC And Drax Group Plc? appeared first on The Motley Fool UK.

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Peter Stephens owns shares of SSE. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.