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        <title>Foresight Solar Fund Limited (LSE:FSFL) Share Price, History, &amp; News | The Motley Fool UK</title>
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	<title>Foresight Solar Fund Limited (LSE:FSFL) Share Price, History, &amp; News | The Motley Fool UK</title>
	<link>https://www.fool.co.uk/tickers/lse-fsfl/</link>
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                                <title>I asked ChatGPT for the perfect passive income ISA and it said…</title>
                <link>https://www.fool.co.uk/2025/12/26/i-asked-chatgpt-for-the-perfect-passive-income-isa-and-it-said/</link>
                                <pubDate>Fri, 26 Dec 2025 09:11:10 +0000</pubDate>
                <dc:creator><![CDATA[Ben McPoland]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Investing For Beginners]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1622606</guid>
                                    <description><![CDATA[<p>Which 10 passive income stocks did the world's most popular artificial intelligence chatbot pick for a Stocks and Shares ISA?</p>
<p>The post <a href="https://www.fool.co.uk/2025/12/26/i-asked-chatgpt-for-the-perfect-passive-income-isa-and-it-said/">I asked ChatGPT for the perfect passive income ISA and it said…</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>Some of the best performers in my Stock and Shares ISA this year have been those that pay passive income. These include <strong>BAE Systems</strong>, <strong>Aviva</strong>, <strong>HSBC</strong>, <strong>Games Workshop</strong>, <strong>Coca Cola HBC</strong>, and <strong>BlackRock World Mining Trust</strong>.</p>



<p>As I write, these UK stocks are up between 35% and 65% &#8212; before dividends!</p>



<p>Given this strong performance, I&#8217;m tempted to add a couple more income shares to my portfolio in 2026. So I turned to ChatGPT for its view on the &#8216;perfect&#8217; passive income portfolio. Here&#8217;s what it said.</p>



<h2 class="wp-block-heading" id="h-the-10-stock-portfolio">The 10-stock portfolio </h2>



<p>The AI bot said it&#8217;s goal was to find diversified income streams and dividends that grow faster than inflation. It aimed to build a portfolio with a 5%-7% starting <a href="https://www.fool.co.uk/investing-basics/how-to-value-shares/dividend-yield/">yield</a>.</p>



<p>Here are the 10 dividend stocks it fired out:</p>



<figure class="wp-block-table"><table><tbody><tr><td></td><td><strong>Type</strong></td></tr><tr><td><strong>Legal &amp; General</strong></td><td>Insurer</td></tr><tr><td>Aviva</td><td>Insurer</td></tr><tr><td><strong>M&amp;G</strong></td><td>Asset manager</td></tr><tr><td><strong>Phoenix Group</strong></td><td>Life and pensions</td></tr><tr><td><strong>National Grid</strong></td><td>Utility</td></tr><tr><td><strong>Unilever</strong></td><td>Staples</td></tr><tr><td><strong>British American Tobacco</strong></td><td>Tobacco</td></tr><tr><td><strong>LondonMetric Property</strong></td><td>REIT</td></tr><tr><td><strong>3i Infrastructure</strong></td><td>Infrastructure</td></tr><tr><td><strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>)</td><td>Renewables</td></tr></tbody></table></figure>



<h2 class="wp-block-heading" id="h-problems">Problems</h2>



<p>At first glance, I think most of this portfolio looks very strong. However, some of these stocks are not expected to grow their dividends noticeably faster than inflation (currently around 3.2%), as ChatGPT seemed to suggest.</p>



<p>For example, Phoenix, Unilever, and Legal &amp; General are only forecast to growth theirs by 2%-3% in 2026. This isn&#8217;t a reason not to consider buying these shares, of course. Legal &amp; General and Phoenix both sport starting yields above <span style="text-decoration: underline">7.5%</span>, and their share prices may rise. But income growth looks modest.</p>



<p>The bot also produced inaccuracies, saying British American Tobacco yields around 9% when it&#8217;s actually 5.7%. And it asserted that 3i Infrastructure&#8217;s is 5% when the real figure is closer to 3.5%.</p>



<h2 class="wp-block-heading" id="h-a-risky-pick">A risky pick </h2>



<p>The worst inaccuracy relates to the <strong>FTSE 250</strong>&#8216;s Foresight Solar Fund. It owns <a href="https://www.fool.co.uk/investing-basics/market-sectors/investing-in-renewable-energy-stocks-in-the-uk/">solar farms</a> and battery energy storage systems across the UK, Spain and Australia. ChatGPT puts the fund&#8217;s dividend yield at just 6%. In reality, it&#8217;s actually over 12% after a 48% share price collapse since mid-2022.</p>


<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="2020-12-22" data-end-date="2025-12-22" data-comparison-value=""></div>



<p>Somewhat bizarrely, ChatGPT seem to pat itself on the back by not naming any &#8220;<em>12% traps</em>&#8220;, where if the income &#8220;<em>looks too good, it usually is</em>&#8220;.</p>



<p>However, I think Foresight Solar Fund might indeed become a 12%-yield trap. In the third quarter, electricity production from its global portfolio was 6.3% below budget, despite irradiation being 3.6% above its base case (more sunlight than forecast, basically).</p>



<p>There were grid interruptions in the UK, while both Spain and Australia saw challenges. Meanwhile, the fund’s struggled to sell its Australian assets for what it thinks they&#8217;re worth. As such, it’s paused this process, leaving it unable to pay down some debt.</p>



<p>More worrying was this statement in November: &#8220;[T]<em>he UK Department for Energy Security and Net Zero unveiled proposals to revise the inflation indexation of the Renewable Obligation (ROC) and Feed-in Tariff (FIT) schemes. These changes have the potential to impact future revenues for operating UK solar projects and dampen investor confidence in the country&#8217;s renewable energy sector</em>&#8220;.</p>



<p>In future then, the UK might weaken the inflation protection built into legacy renewable subsidies. This could end up hitting cash flows, threatening dividend growth.</p>



<p>As things stand though, management said it was confident in achieving its dividend cover target for the year. So investors might want to consider the stock for its near-term, ultra-high-yield income potential.</p>



<p>For me though, the regulatory risk adds too much uncertainty, putting me off the stock. I see better dividend growth opportunities elsewhere.</p>
<p>The post <a href="https://www.fool.co.uk/2025/12/26/i-asked-chatgpt-for-the-perfect-passive-income-isa-and-it-said/">I asked ChatGPT for the perfect passive income ISA and it said…</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>12.5% dividend yield! Could buying this FTSE 250 stock earn me massive passive income?</title>
                <link>https://www.fool.co.uk/2025/12/22/12-5-dividend-yield-could-buying-this-ftse-250-stock-earn-me-massive-passive-income/</link>
                                <pubDate>Mon, 22 Dec 2025 07:11:00 +0000</pubDate>
                <dc:creator><![CDATA[Zaven Boyrazian, CFA]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1620847</guid>
                                    <description><![CDATA[<p>This FTSE 250 stock looks like a rare and outstanding passive income opportunity. But is the 12.5% dividend yield too good to be true?</p>
<p>The post <a href="https://www.fool.co.uk/2025/12/22/12-5-dividend-yield-could-buying-this-ftse-250-stock-earn-me-massive-passive-income/">12.5% dividend yield! Could buying this FTSE 250 stock earn me massive passive income?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>The <strong>FTSE 250</strong>&#8216;s filled with dividend-paying stocks offering chunky payouts. And right now, <strong>Foresight Solar Fund </strong>(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>) stands out as one of the most generous, with a yield stretching to 12.5%!</p>



<p>At this rate, that means for every £1,000 invested, shareholders could earn £125 in passive income. So is this a screaming buy, or is it too good to be true?</p>



<h2 class="wp-block-heading" id="h-the-struggles-of-energy-infrastructure">The struggles of energy infrastructure</h2>



<p>Foresight Solar&#8217;s a bit of a complicated business. But in simplified terms, it owns and manages a portfolio of solar farms scattered across the UK, Spain, and Australia, selling its <a href="https://www.fool.co.uk/investing-basics/market-sectors/investing-in-renewable-energy-stocks-in-the-uk/">green electricity</a> to local energy suppliers.</p>



<p>Like many renewable energy stocks, Foresight&#8217;s found navigating a higher interest rate environment significantly more challenging, with the valuation of its assets dragged down.</p>



<p>This headwind&#8217;s only been amplified by the downward shift in long-term power price forecasts. To make matters worse, renewable subsidies are also at risk of being adjusted to be far less generous, adding even more pressure to the business.</p>



<p>Combined, these headwinds have dragged the group’s net asset value down by almost 10% across the first six months of 2025. And with investor sentiment on renewables souring, the share price has suffered an even bigger 20% tumble since.</p>



<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>




<p>However, despite these challenges, dividends have continued to flow to shareholders. In fact, they’re actually on track to deliver 11 years of consecutive payout hikes. And when mixing a growing dividend with a falling share price, the yield&#8217;s been pushed into double-digit territory.</p>



<p>So with the damage seemingly already baked into the share price, is this secretly a buying opportunity?</p>



<h2 class="wp-block-heading" id="h-capitalising-on-uncertainty">Capitalising on uncertainty</h2>



<p>Even after the group’s net asset value tumbled, the stock still trades at a pretty extreme 36.6% discount. This is a clear reflection of the uncertainty surrounding the renewable energy sector in 2025. Yet it’s something management&#8217;s already aiming to take advantage of through a share buyback programme.</p>



<p>What’s more, when digging into the firm’s actual cash flows, Foresight’s earnings continue to cover shareholder dividends, funding its substantial yield despite all the pessimism. And with interest rates steadily being cut, the pressure from its <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/gearing/">outstanding debts</a> is slowly being alleviated, helping boost its dividend coverage even more.</p>



<h2 class="wp-block-heading" id="h-a-risk-worth-taking">A risk worth taking?</h2>



<p>Despite robust cash flows, I can’t help but wonder if Foresight’s yield is nothing more than a siren’s song. With renewable subsidies being reviewed and expected to be cut, the group’s current cash flows could soon prove insufficient to maintain its current payout.</p>



<p>Given its steep share price discount, it’s possible that investors are being overly pessimistic. But with no clear catalysts to rebuild sentiment, the risks surrounding this FTSE 250 stock seem far too great for my tastes. Instead, I think there are far better dividend opportunities to explore elsewhere.</p>
<p>The post <a href="https://www.fool.co.uk/2025/12/22/12-5-dividend-yield-could-buying-this-ftse-250-stock-earn-me-massive-passive-income/">12.5% dividend yield! Could buying this FTSE 250 stock earn me massive passive income?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>12.4% yield and 36% undervalued! Is it time to buy this FTSE 250 passive income star?</title>
                <link>https://www.fool.co.uk/2025/12/15/12-4-yield-and-36-undervalued-is-it-time-to-buy-this-ftse-250-passive-income-star/</link>
                                <pubDate>Mon, 15 Dec 2025 07:11:00 +0000</pubDate>
                <dc:creator><![CDATA[Zaven Boyrazian, CFA]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1616367</guid>
                                    <description><![CDATA[<p>This energy infrastructure enterprise now has one of the highest yields in the FTSE 250 with one of the biggest discounts. But could it be a trap?</p>
<p>The post <a href="https://www.fool.co.uk/2025/12/15/12-4-yield-and-36-undervalued-is-it-time-to-buy-this-ftse-250-passive-income-star/">12.4% yield and 36% undervalued! Is it time to buy this FTSE 250 passive income star?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
]]></description>
                                                                                            <content:encoded><![CDATA[
<p>The <strong>FTSE 250</strong> is packed with dividend-paying stocks to buy and earn a passive income. And right now, <strong>Foresight Solar Fund </strong>(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>) stands out with one of the highest yields in the index.</p>



<p>At 12.4%, for every £1,000 invested in this renewable energy enterprise, £124 is earned through dividends. And what’s more, the stock is also trading at a massive 36% discount to its net asset value. Of course, experienced investors know that a double-digit yield and a dirt-cheap valuation can be a signal of trouble ahead.</p>



<p>Yet looking at Foresight’s financials, the company continues to generate enough money to cover its shareholder payouts. In fact, its exceptionally cash-generative business model has enabled Foresight to hike dividends every year over the last decade. And right now, it’s on track to deliver its 11th year of consecutive payout increases.</p>



<p>So, what’s the catch?</p>



<h2 class="wp-block-heading" id="h-why-investors-don-t-like-renewables">Why investors don&#8217;t like renewables</h2>



<p>Foresight Solar is not the only <a href="https://www.fool.co.uk/investing-basics/market-sectors/investing-in-renewable-energy-stocks-in-the-uk/">renewable energy stock</a> paying a ginormous dividend yield right now. <strong>Bluefield Solar Income,</strong> along with <strong>Greencoat UK Wind,</strong> are in a similar situation with massive yields alongside chunky share price discounts.</p>


<div class="tmf-chart-multipleseries" data-title="Foresight Solar Fund + Greencoat Uk Wind Plc + Bluefield Solar Income Fund Price" data-tickers="LSE:FSFL LSE:UKW LSE:BSIF" data-range="5y" data-start-date="2025-01-02" data-end-date="" data-comparison-value="percent"></div>



<p>Given that electricity demand is on the rise and remains resilient even during economic downturns, each of the businesses has seen its cash flows expand, fuelling ever-increasing shareholder payouts. And even today, the cash flow still looks solid.</p>



<p>Ignoring curtailment in Spain and an unexpected outage in UK network operators, Foresight’s solar farms have been outperforming, generating more electricity than expected thanks to sunny weather. And with power price forecasts also getting revised slightly upward, the long-term sustainability of this business seems to be intact.</p>



<p>At least, that would be the case if it weren’t for one small detail – renewable subsidies are under attack.</p>



<h2 class="wp-block-heading" id="h-politics-versus-the-cost-of-living">Politics versus the cost of living</h2>



<p>With the cost of living continuing to climb, the UK government is under a lot of pressure to take action. And in an attempt to reduce energy bills, green levies have been cut while the inflation index for Renewable Obligations (ROs) is in the process of swapping from the Retail Price Index (RPI) to a Consumer Price Index (CPI).</p>



<p>This situation is a little complicated. But in oversimplified terms, these decisions could translate into a significant subsidy cut for green energy generators, indirectly reducing the value of their renewable infrastructure assets, and directly impacting their revenue stream.</p>



<p>Now throw in the added pressure of higher interest rates on enormous <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/gearing/">outstanding debts</a>, and there is suddenly a very real risk of dividends getting slashed. With that in mind, it’s easy to understand why investor sentiment in this space is currently so weak.</p>



<h2 class="wp-block-heading" id="h-a-hidden-buying-opportunity">A hidden buying opportunity?</h2>



<p>There’s no denying that investment uncertainty within the renewables space is sky high at the moment. But it’s also worth pointing out that most of these changes have yet to be implemented. The government is actively engaging with the industry too.</p>



<p>Foresight’s own ‘worst-case-scenario’ forecast predicts the group’s net asset value will fall by around 10%. Even if this drop happens, the share price today is still at a double-digit discount. This suggests that investors are potentially being a bit too pessimistic.</p>



<p>Personally, the risk and uncertainty are too high for my tastes. But for more adventurous income investors, Foresight Solar could be worth a deeper dive.</p>



<p></p>
<p>The post <a href="https://www.fool.co.uk/2025/12/15/12-4-yield-and-36-undervalued-is-it-time-to-buy-this-ftse-250-passive-income-star/">12.4% yield and 36% undervalued! Is it time to buy this FTSE 250 passive income star?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>A 10.1% dividend yield but down 35%! Time for me to buy this FTSE gem?</title>
                <link>https://www.fool.co.uk/2025/11/02/a-10-1-dividend-yield-but-down-35-time-for-me-to-buy-this-ftse-gem/</link>
                                <pubDate>Sun, 02 Nov 2025 07:01:00 +0000</pubDate>
                <dc:creator><![CDATA[Zaven Boyrazian, CFA]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1595186</guid>
                                    <description><![CDATA[<p>This energy stock pays one of the highest dividend yields in the FTSE 250 and is trading at a massive discount despite robust and expanding cash flows.</p>
<p>The post <a href="https://www.fool.co.uk/2025/11/02/a-10-1-dividend-yield-but-down-35-time-for-me-to-buy-this-ftse-gem/">A 10.1% dividend yield but down 35%! Time for me to buy this FTSE gem?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>Renewable energy stocks haven’t been very popular in 2025, yet these businesses currently offer some of the highest dividend yields in the FTSE. And it&#8217;s no secret that some of the best buying opportunities can often be found in the least popular sectors.</p>



<p>Take <strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>) as a prime example. Since its peak in September 2022, the solar farm enterprise has seen more than 35% of its market-cap wiped out. And yet, despite the drop in share price, dividends have continued to flow. So much so that the yield now stands at a staggering 10.1%.</p>



<p>So is this a no-brainer for passive income-seeking investors?</p>



<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>




<h2 class="wp-block-heading" id="h-investigating-performance">Investigating performance</h2>



<p>As a quick crash course, Foresight Solar’s a unique investment trust. It actively manages a diversified portfolio of solar farms across the UK and Europe.</p>



<p>The business model’s fairly simple. Acquire a stake in solar assets, let them generate renewable electricity, and then sell that electricity to the national grid, returning the bulk of profits back to shareholders via a dividend.</p>



<p>So long as the sun’s shining, Foresight’s making money. And this recurring stream of cash flow has translated into 10 years of consecutive dividend hikes.</p>



<p>However, with most of its earnings being paid out to shareholders, the company has to <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/gearing/">rely heavily on debt</a> to finance its expansion efforts. This strategy worked flawlessly when interest rates were near zero.</p>



<p>But with rates having been hiked aggressively, the group&#8217;s leverage turned into a massive liability. And with <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-cash-flow-statement/">cash flows</a> gobbled up by debt servicing costs, investors began to flee, triggering the steady decline in its share price, pushing the yield into double-digit territory.</p>



<h2 class="wp-block-heading" id="h-are-dividends-sustainable">Are dividends sustainable?</h2>



<p>Despite the pressure on cash flows, dividends have continued to be covered. And in 2025, management projects its dividend coverage ratio to sit at 1.3. That suggests shareholder payouts, even at the current yield, remain affordable. But it&#8217;s still a notable reduction from the 1.7 coverage ratio reported in 2022.</p>



<p>The good news is that with interest rates steadily falling, the pressure from its debt is expected to subside slowly, improving dividend sustainability at the same time. That certainly suggests the 10.1% yield’s here to stay. So why aren&#8217;t more investors jumping at the opportunity?</p>



<p>While interest rate cuts are seemingly on the horizon, that&#8217;s not the only thing holding back profits. Long-term energy price forecasts all point towards lower power prices in the future. And since that&#8217;s a key driver of Foresight&#8217;s cash flow, investors remain concerned about a future dividend cut even in a lower interest rate environment.</p>



<h2 class="wp-block-heading" id="h-the-bottom-line">The bottom line</h2>



<p>Looking at the latest analyst insights from institutional investors, most praise the firm&#8217;s ability to continue rewarding loyal shareholders with dividends. However, overall, most appear to have a &#8216;wait and see&#8217; attitude towards the stock, citing external uncertainty.</p>



<p>While this cautious approach makes sense, uncertainty appears to already be baked into the share price, with Foresight shares trading at a pretty chunky 30% discount to its net asset value. As such, investors hunting for a high sustainable dividend yield may want to take a closer look… I certainly am.</p>
<p>The post <a href="https://www.fool.co.uk/2025/11/02/a-10-1-dividend-yield-but-down-35-time-for-me-to-buy-this-ftse-gem/">A 10.1% dividend yield but down 35%! Time for me to buy this FTSE gem?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>2 high-yielding FTSE shares that look tempting – but I’m not buying yet</title>
                <link>https://www.fool.co.uk/2025/10/21/2-high-yielding-ftse-shares-that-look-tempting-but-im-not-buying-yet/</link>
                                <pubDate>Tue, 21 Oct 2025 07:10:00 +0000</pubDate>
                <dc:creator><![CDATA[Mark Hartley]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1591959</guid>
                                    <description><![CDATA[<p>Mark Hartley looks at two high-yielding FTSE shares and explains why their double-digit dividends might not be as safe as they appear.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/21/2-high-yielding-ftse-shares-that-look-tempting-but-im-not-buying-yet/">2 high-yielding FTSE shares that look tempting – but I’m not buying yet</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>The <strong>FTSE</strong>&#8216;s home to some of the best dividend-paying companies in the world. High yields can be incredibly appealing, especially during uncertain market conditions. But as every seasoned investor knows, not all yields are created equal.</p>



<p>Sometimes a double-digit return can be a sign of trouble ahead rather than opportunity.</p>



<p>That’s why I’ve been looking closely at two FTSE shares with yields north of 10%. Both look attractive on paper, but I’m not convinced now’s the time to buy.</p>



<h2 class="wp-block-heading" id="h-energean">Energean</h2>



<p><strong>Energean</strong>&#8216;s&nbsp;(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-enog/">LSE: ENOG</a>) a London-listed oil and gas producer with operations across the Mediterranean and comes with a market-cap of around £1.64bn. The share price sits at roughly 890p, and the company’s dividend yield of 10.2% looks outstanding.</p>


<div class="tmf-chart-singleseries" data-title="Energean Plc Price" data-ticker="LSE:ENOG" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Profitability&#8217;s solid too – it boasts a return on equity (ROE) of 17.2% and a 7.5% net margin.</p>



<p>Over the past five years, Energean’s shares have risen 72.5%, a decent return considering how volatile the energy sector’s been. And with a <a href="https://www.fool.co.uk/investing-basics/how-to-value-shares/pe-ratio/" target="_blank" rel="noreferrer noopener">price-to-earnings</a> (P/E) ratio of just 10.2, it could even be described as a value play within the <strong>FTSE 250</strong>.</p>



<p>However, the one major concern that gives me pause is its £2.56bn debt load. That’s roughly five and a half times its total equity. The firm’s quick ratio – a measure of short-term liquidity – sits at just 0.47, suggesting limited cash on hand to meet obligations.</p>



<p>While cash flow from operations remains healthy for now, any downturn in energy prices could strain the business’s ability to service its debt, let alone maintain such a generous dividend.</p>



<p>That’s a risk I’d rather not take. For income investors, the yield might look mouthwatering, but I think it’s worth analysing how sustainable it really is.</p>



<h2 class="wp-block-heading" id="h-foresight-solar-fund-limited">Foresight Solar Fund Limited</h2>



<p>The second FTSE share that caught my attention is <strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE: FSFL</a>), which owns and operates solar energy assets across the UK and Europe. With a market-cap of £430m and a share price of 78p, it’s a much smaller player than Energean – but its 10.3% yield has certainly grabbed the market’s attention.</p>


<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Foresight’s financials look strong at first glance. The <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-balance-sheet/" target="_blank" rel="noreferrer noopener">balance sheet</a>&#8216;s clean, with no debt and a quick ratio of 3.42. It’s also been increasing dividends for eight straight years, which adds a touch of reliability. Revenue rose 8.84% year on year in its latest results, showing decent operational performance despite industry pressures.</p>



<p>However, the dividend coverage is a major concern. The company’s cash dividend coverage ratio stands at just 0.53 – well below the comfort level of 2 or higher. Meanwhile, its earnings per share (EPS) of 1p doesn’t come close to covering its 8p dividend per share. In simple terms, it’s paying out far more than it earns, which is rarely sustainable for long.</p>



<p>Unless earnings rebound, the fund might have to trim its dividend. That would likely send income-focused investors running for the exits.</p>



<h2 class="wp-block-heading" id="h-final-thoughts">Final thoughts</h2>



<p>Both Energean and Foresight Solar Fund have attractive business models and operate in essential sectors. Yet the combination of high yields, fragile coverage and sector-specific challenges makes me cautious.</p>



<p>Those dividends might not be sustainable under current conditions. If cuts come, the share prices could tumble further. For now, I’ll keep both on my watchlist – but until their earnings and cash flow improve, I think there are safer FTSE shares to consider for reliable passive income.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/21/2-high-yielding-ftse-shares-that-look-tempting-but-im-not-buying-yet/">2 high-yielding FTSE shares that look tempting – but I’m not buying yet</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>A 9.5% dividend yield! 2 dividend stocks to consider for long-term passive income</title>
                <link>https://www.fool.co.uk/2025/10/12/a-9-5-dividend-yield-2-dividend-stocks-to-consider-for-long-term-passive-income/</link>
                                <pubDate>Sun, 12 Oct 2025 05:37:00 +0000</pubDate>
                <dc:creator><![CDATA[Royston Wild]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1587909</guid>
                                    <description><![CDATA[<p>A lump sum or regular investment in these UK dividend stocks could yield substantial passive income over time, predicts Royston Wild.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/12/a-9-5-dividend-yield-2-dividend-stocks-to-consider-for-long-term-passive-income/">A 9.5% dividend yield! 2 dividend stocks to consider for long-term passive income</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>These dividend stocks offer enormous yields and long records of payout growth. Here&#8217;s why they demand serious attention right now.</p>



<h2 class="wp-block-heading" id="h-a-top-reit">A top REIT</h2>



<p><a href="https://www.fool.co.uk/investing-basics/getting-started-in-investing/investing-in-reits-in-the-uk/" target="_blank" rel="noreferrer noopener">Real estate investment trusts (REITs)</a> can be great shares to target long-term passive income. Sector rules state at least 90% of annual rental earnings must be paid out in dividends. This can make the cash rewards they deliver less volatile than those from other dividend shares.</p>



<p><strong>Unite </strong>(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-utg/">LSE:UTG</a>) is one trust I feel demands close attention. It operates in the highly defensive student accommodation market, which gives profits protection from changing economic conditions. Following its acquisition of sector rival <strong>Empiric Student Property</strong>, it will be the UK&#8217;s largest operator with 75,000 beds, chiefly centred on the country&#8217;s strongest universities.</p>



<p>Unite has proven one of the UK&#8217;s most reliable dividend growth stocks, with payouts rising almost every year since 2011. The only exception came in 2019 when Covid-19 uncertainty forced a reduction.</p>



<p>For this year, the REIT&#8217;s <a href="https://www.fool.co.uk/investing-basics/how-to-value-shares/dividend-yield/" target="_blank" rel="noreferrer noopener">dividend yield</a> is a large 6.2%, which is almost double the <strong>FTSE 100</strong> average of 3.2%. This figure has been boosted by a sharp fall in Unite&#8217;s shares on Wednesday (8 October) &#8212; then, the company said sales to date had delivered rental growth of 4%, down from 8.2% in the same 2024 period.</p>


<div class="tmf-chart-singleseries" data-title="Unite Group Plc Price" data-ticker="LSE:UTG" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>I think this represents an attractive dip-buying opportunity to consider.</p>



<p>Competition is tough, and Unite&#8217;s problems are being compounded by extra stress on students&#8217; budgets right now. But the long-term sector outlook remains robust, and the company&#8217;s increased scale gives it a significant advantage. I expect dividends to continue rising over the next decade and beyond.</p>



<p><em>Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.</em></p>



<h2 class="wp-block-heading" id="h-going-green">Going green</h2>



<p><strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>) is another top dividend stock worth serious attention after recent price weakness.</p>



<p>It&#8217;s fallen in value as optimism over sustained interest rate cuts over the next year have declined. As with Unite, asset values come under pressure when rates are higher, and cost of borrowing pressures increase.</p>



<p>While this issue can be significant, the impact it&#8217;s had on Foresight&#8217;s dividend yield merits serious consideration. Its forward yield is now an enormous 10.7%.</p>


<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Like any renewable energy stock, the company has significant long-term investment potential as the move from fossil fuels continues apace. </p>



<p>Foresight has ambitious plans to capitalise on the green transition &#8212; the business has 1 GW of capacity across its assets, and plans to treble its development pipeline to 3 GW from current levels, with growth focused on the UK and Europe where clean energy policy is especially favourable.</p>



<p>Investing in energy producers has another significant advantage for investors. Electricity demand is largely unchanged across the economic cycle, giving companies the financial strength and the confidence to steadily raise dividends.</p>



<p>In the case of Foresight, annual dividends have risen each year since it listed on the London stock market in 2013. It&#8217;s a theme I expect to continue long into the future.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/12/a-9-5-dividend-yield-2-dividend-stocks-to-consider-for-long-term-passive-income/">A 9.5% dividend yield! 2 dividend stocks to consider for long-term passive income</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Dividend yields above 9%! Here are 3 top UK shares to consider</title>
                <link>https://www.fool.co.uk/2025/10/05/dividend-yields-above-9-here-are-3-top-uk-shares-to-consider/</link>
                                <pubDate>Sun, 05 Oct 2025 04:27:00 +0000</pubDate>
                <dc:creator><![CDATA[Royston Wild]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1581182</guid>
                                    <description><![CDATA[<p>I'm expecting these high-yield UK dividend shares to deliver a market-beating passive income for years to come. Here's why.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/05/dividend-yields-above-9-here-are-3-top-uk-shares-to-consider/">Dividend yields above 9%! Here are 3 top UK shares to consider</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
]]></description>
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<p>I&#8217;m on the hunt for the best dividend shares to buy. Here are a few I think all savvy investors should consider.</p>



<h2 class="wp-block-heading" id="h-foresight-solar-fund">Foresight Solar Fund</h2>



<p>Renewable energy stocks like <strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE: FSFL</a>) can be excellent picks for long-term income. On the downside, earnings can suffer during unfavourable weather conditions when energy production drops. But these companies enjoy plenty of other qualities that can make them reliable dividend payers.</p>



<p>Electricity demand is famously stable over time, so earnings and cash flow pressures don&#8217;t (unlike with many other dividend stocks) materialise during economic downturns. What&#8217;s more, the majority of Foresight&#8217;s energy is sold at pre-agreed rates under power purchase agreements, or backed by government subsidies.</p>



<p>These qualities have allowed the fund to raise annual <a href="https://www.fool.co.uk/investing-basics/how-shares-are-taxed-2/how-dividends-are-taxed/" target="_blank" rel="noreferrer noopener">dividends</a> each year since it listed in 2013. And it&#8217;s set to raise the payout again to 8.1p per share in 2025, according to City analysts.</p>



<p>This leaves the business with a 10.8% dividend yield. And encouragingly, the targeted dividend is covered 1.3 times by expected cash, which is reasonably strong relative to the broader sector.</p>



<h2 class="wp-block-heading" id="h-ishares-us-equity-high-income-etf"><strong>iShares US Equity High Income ETF</strong></h2>



<p>Pooled instruments like the <strong>iShares US Equity High Income ETF</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-incu/">LSE:INCU</a>) can also provide a reliable second income over time. Spreading investors&#8217; capital means many different dividend-paying shares contribute to the overall payout, protecting returns if one or two run into difficulties.</p>



<p>This particular one holds shares in 223 different Wall Street companies, spread across sectors such as information technology, financial services, telecoms and consumer goods. With a large number of multinational businesses in its basket too, it safeguards dividends from trouble in particular regions.</p>



<p>It&#8217;s true that a focus on equities leaves the <a href="https://www.fool.co.uk/investing-basics/isas-and-investment-funds/exchange-traded-funds/" target="_blank" rel="noreferrer noopener">exchange-traded fund (ETF)</a> vulnerable to stock market downturns. But a selection of fixed income securities helps reduce this threat to the fund&#8217;s value. </p>



<p>In addition, its portfolio allocation is designed to &#8220;<em>to generate income and capital growth with lower volatility than the broader US equity market</em>”. The forward dividend yield here is 9.6%.</p>



<h2 class="wp-block-heading" id="h-phoenix-group">Phoenix Group</h2>



<p>Financial services ace <strong>Phoenix Group</strong>&#8216;s (LSE:PHNX) also proved a dependable dividend raiser in recent years. With another yearly hike tipped for 2025, its forward yield is an excellent 9%.</p>



<p>As with any share, the <strong>FTSE 100</strong> company isn&#8217;t risk free. In this case, a economic downturn could pull its share price lower. But from a dividend perspective things look largely secure in my book. Its Solvency II capital ratio was a robust 175% as of June.</p>



<p>Phoenix&#8217;s operations are highly cash generative, which underpin its solid dividend record. It primarily manages old pension and insurance policies, which provide predictable cash flows over time from premiums and investment returns. With limited scope to grow earnings too, Phoenix is happy to return excess cash to its shareholders than to invest in the business.</p>



<p>Having said that, I&#8217;m confident steady structural growth in the retirement products market should underpin impressive dividend income over the long term.</p>
<p>The post <a href="https://www.fool.co.uk/2025/10/05/dividend-yields-above-9-here-are-3-top-uk-shares-to-consider/">Dividend yields above 9%! Here are 3 top UK shares to consider</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>FTSE 250 shares like these offer 10%+ yields. Am I missing out?</title>
                <link>https://www.fool.co.uk/2025/09/16/ftse-250-shares-like-these-offer-10-yields-am-i-missing-out/</link>
                                <pubDate>Tue, 16 Sep 2025 15:41:00 +0000</pubDate>
                <dc:creator><![CDATA[Christopher Ruane]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1577074</guid>
                                    <description><![CDATA[<p>A yield north of 10% can seem attractive -- and several shares in the FTSE 250 offer them. Our writer looks at the pros and cons of one of them.</p>
<p>The post <a href="https://www.fool.co.uk/2025/09/16/ftse-250-shares-like-these-offer-10-yields-am-i-missing-out/">FTSE 250 shares like these offer 10%+ yields. Am I missing out?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>A double-digit dividend yield is a rare thing. It can also be a red flag for investors, although in some cases <a href="https://www.fool.co.uk/investing-basics/the-high-yield-portfolio/">high-yield shares</a> go on pumping out dividends for the long term. A few <strong>FTSE 250</strong> shares offer yields north of 10% right now.</p>



<p>For example, <strong>Bluefield Solar Income Fund </strong>(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-bsif/">LSE: BSIF</a>) yields 10.2%. Meanwhile, <strong>Foresight Solar Fund </strong>(<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE: FSFL</a>) is yielding 10.1%.</p>



<p>Am I missing out by not owning any solar fund shares?</p>



<h2 class="wp-block-heading" id="h-taking-the-long-term-approach">Taking the long-term approach</h2>



<p>The short-term answer is: yes, I am.</p>



<p>Owning a 10%+ yielding share helps boost my <a href="https://www.fool.co.uk/investing-basics/getting-started-in-investing/passive-income-ideas/">passive income streams</a>. I do own at least one, but not Foresight Solar Fund.</p>



<p>Over the past few years, Foresight has grown its dividend per share annually. It pays dividends quarterly. From a passive income perspective, that can be attractive compared to less frequent payouts.</p>



<p>But while I am missing out on dividends, what about capital growth?</p>


<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>



<p>Here the picture is less appealing. Over the past five years, the Foresight Solar Fund share price has fallen <span style="text-decoration: underline">25%</span>.</p>



<p>Coincidentally, the share currently sells for 25% less than its net asset value.</p>



<h2 class="wp-block-heading" id="h-some-red-flags">Some red flags</h2>



<p>Hang on, though. </p>



<p>Why would a share sell for a quarter less than its net asset value? </p>



<p>After all, the shareholders could simply vote to wind the company up, sell the assets, and recoup substantially more money than their shares are currently worth.</p>



<p>In theory, they could. In practice, though, things tend to be more complicated than that.</p>



<p>Trying to realise a company’s asset value is notoriously difficult. Who is to say that if Foresight Solar Fund tried to realise cash by selling its assets it would be able to obtain the valuation at which they are carried on its <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-balance-sheet/">balance sheet</a>?</p>



<p>That 25% discount is something of a red flag for me, along with the long-term decline in the share price despite steady dividend growth. Clearly, some investors are looking beyond the juicy dividend yield to the long-term prospects for the fund.</p>



<h2 class="wp-block-heading" id="h-a-sector-ripe-for-change">A sector ripe for change</h2>



<p>Foresight Solar Income Fund management is well aware of this. </p>



<p>It has also been wrestling with possible explanations for why solar funds like itself trade below their net asset value. It has also raised the prospect of mergers and acquisitions in the sector.</p>



<p>That could potentially help unlock some value in the sector. </p>



<p>Then again, it could be bad news. After all, lowball takeover bids can potentially destroy value for many shareholders – something I am currently experiencing with my investment in <strong>Treatt</strong>.</p>



<h2 class="wp-block-heading" id="h-i-don-t-like-the-uncertainty">I don&#8217;t like the uncertainty</h2>



<p>Foresight Solar Income Fund has been steadily buying back its own shares lately. Doing that well below net asset value ought to help create value for shareholders.</p>



<p>The bigger question is whether solar income funds like those run by Bluefield and Foresight have a viable long-term business model. Volatile energy prices and changing weather patterns are risks for both.</p>



<p>With Foresight Solar Income Fund set to report its interim results this Thursday (18 September), we should hear management&#8217;s current thinking about the prospects for the sector.</p>



<p>But I do not like the question marks over the business model implied by the large discounts to net asset value of both these FTSE 250 shares (Bluefield Solar Income trades on a 26% discount). I will not be investing in either.</p>
<p>The post <a href="https://www.fool.co.uk/2025/09/16/ftse-250-shares-like-these-offer-10-yields-am-i-missing-out/">FTSE 250 shares like these offer 10%+ yields. Am I missing out?</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>Investors with £5,000 in these UK dividend shares are earning a yield of&#8230;</title>
                <link>https://www.fool.co.uk/2025/09/01/investors-with-5000-in-these-uk-dividend-shares-are-earning-a-yield-of/</link>
                                <pubDate>Mon, 01 Sep 2025 06:41:00 +0000</pubDate>
                <dc:creator><![CDATA[Zaven Boyrazian, CFA]]></dc:creator>
                		<category><![CDATA[Dividend Shares]]></category>
		<category><![CDATA[Investing Articles]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1567986</guid>
                                    <description><![CDATA[<p>These UK dividend shares are incredibly unpopular with investors right now, even as cash flows continue to comfortably fund enormous yields. </p>
<p>The post <a href="https://www.fool.co.uk/2025/09/01/investors-with-5000-in-these-uk-dividend-shares-are-earning-a-yield-of/">Investors with £5,000 in these UK dividend shares are earning a yield of&#8230;</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
]]></description>
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<p>Despite being mainly known for growth opportunities, there are plenty of lucrative dividend shares in the <strong>FTSE 250</strong>. And right now, two of the highest-yielding income opportunities are <strong>NextEnergy Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-nesf/">LSE:NESF</a>) and <strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>).</p>



<p>In fact, equally splitting £5,000 across these two stocks unlocks a combined yield of 10.9% &#8211; enough to start earning £545 passively overnight. But is this actually a good idea?</p>


<div class="tmf-chart-multipleseries" data-title="NextEnergy Solar Fund + Foresight Solar Fund Price" data-tickers="LSE:NESF LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value="percent"></div>



<h2 class="wp-block-heading" id="h-the-bull-case">The bull case</h2>



<p>With both businesses focused on investing in renewable energy assets and using the cash flow to pay an inflation-linked dividend, the appeal for investors is clear. Electricity demand is rising exponentially, resulting in a continuous stream of energy income to cover both debt interest and dividend payments. In fact, the dividend coverage ratios for both these stocks currently sit comfortably above the all-important level of 1.0.</p>



<p>NextEnergy Solar and Foresight Solar both have diversified portfolios of renewable energy assets spanning Britain, with the latter also investing internationally in markets including Spain. And with government policy pushing the energy sector towards Net Zero, the bountiful subsidies are providing strong support to fuel long-term growth.</p>



<p>Pairing all this, with both dividend shares trading at double-digit discounts to their net asset value, a seemingly lucrative buying opportunity has emerged for value as well as income investors. This valuation discount, paired with continuous dividend payments, is why the yield&#8217;s so high today. But why aren’t more investors taking advantage?</p>



<h2 class="wp-block-heading" id="h-risk-versus-reward">Risk versus reward</h2>



<p>No investment is ever risk-free. And while renewables may sound like a safe and reliable bet for passive income, there are looming headwinds that could create problems for the sector in the future. The most prominent of these is the expected decline in long-term power prices.</p>



<p>With energy grids being modernised, the supply of energy is on track to rise, putting downward pressure on electricity prices. While that’s good news for consumers, it creates challenges for energy generators like NextEnergy and Foresight.</p>



<p>After all, unless these lower prices are offset by higher energy production volumes, the cash flow for both businesses will eventually decline, hurting the dividend coverage ratio. Even if the companies boost their solar capacity, there remains the continued risk of unfavourable weather, potentially causing energy generation to come in under budget.</p>



<p>Needless to say, there’s a lot of external uncertainty surrounding these dividend shares and the wider renewables sector in general. That’s why many green energy stocks currently offer such impressive yields.</p>



<h2 class="wp-block-heading" id="h-the-bottom-line">The bottom line</h2>



<p>While the risks are significant, their management teams aren&#8217;t blind to them. Strategic divestments and reallocation of capital to reduce <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/gearing/">debt burdens</a> are already under way to alleviate existing pressure on shareholder payouts. In the short term, this introduces execution risk. But in the long run, if successful, these moves should ultimately help support sustainable passive income.  </p>



<p>There’s no denying, investing in these shares comes with a high level of risk in 2025. In fact, that’s why the yields are so high. But with the double-digit yields still being covered by <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-cash-flow-statement/">existing cash flows</a>, these investments may be worth deeper investigation.</p>



<p>Don’t forget, the most unpopular investments can sometimes be the most lucrative in the long run.</p>
<p>The post <a href="https://www.fool.co.uk/2025/09/01/investors-with-5000-in-these-uk-dividend-shares-are-earning-a-yield-of/">Investors with £5,000 in these UK dividend shares are earning a yield of&#8230;</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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                                <title>10 years of payout hikes! This dividend stock now pays a 9.2% yield to long-term investors</title>
                <link>https://www.fool.co.uk/2025/08/18/10-years-of-payout-hikes-this-dividend-stock-now-pays-a-9-2-yield-to-long-term-investors/</link>
                                <pubDate>Mon, 18 Aug 2025 06:31:00 +0000</pubDate>
                <dc:creator><![CDATA[Zaven Boyrazian, CFA]]></dc:creator>
                		<category><![CDATA[Investing Articles]]></category>
		<category><![CDATA[Investing For Beginners]]></category>

                <guid isPermaLink="false">https://www.fool.co.uk/?p=1561409</guid>
                                    <description><![CDATA[<p>This renewable energy dividend stock's massively unpopular with investors right now, yet it offers one of the highest yields in the FTSE 250!</p>
<p>The post <a href="https://www.fool.co.uk/2025/08/18/10-years-of-payout-hikes-this-dividend-stock-now-pays-a-9-2-yield-to-long-term-investors/">10 years of payout hikes! This dividend stock now pays a 9.2% yield to long-term investors</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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<p>While unpopular right now, renewable energy dividend stocks are offering some pretty chunky payouts to income investors. Higher interest rates have tested the resilience of many of these businesses. But with energy demand still rising and the UK government pushing towards Net Zero, the better-capitalised firms are still generating ample cash flow.</p>



<p>That certainly seems to be the case for <strong>Foresight Solar Fund</strong> (<a class="tickerized-link" href="https://www.fool.co.uk/tickers/lse-fsfl/">LSE:FSFL</a>), which has been busy hiking shareholder dividends each year for a decade. And when combining higher payouts with a lower share price, the dividend yield now stands at a jaw-dropping 9.2%!</p>



<p>So should investors consider going against the crowd and start earning passive income from solar farms? Or is there a justified reason to steer clear?</p>



<div class="tmf-chart-singleseries" data-title="Foresight Solar Fund Price" data-ticker="LSE:FSFL" data-range="5y" data-start-date="" data-end-date="" data-comparison-value=""></div>




<h2 class="wp-block-heading" id="h-the-bull-case">The bull case</h2>



<p>A big problem for wind farm energy giants such as <strong>Greencoat UK Wind</strong> has been weather issues. Calmer wind speeds have caused electricity generation to come in significantly under budget. Yet that hasn’t been a problem for Foresight Solar.</p>



<p>With warmer weather and more sunny days, Foresight’s solar panels have been working overtime, with electricity generation coming in ahead of the expected budget. And that comes with an impressive power-pricing hedging portfolio. So the group&#8217;s been immune to most of the recent energy price drops, so far.</p>



<p>That opens the door to both predictable and <a href="https://www.fool.co.uk/investing-basics/understanding-company-accounts/the-cash-flow-statement/">consistent cash flow</a>, enabling management to maintain shareholder payouts both in the form of a 9.2% dividend yield as well as a £50m <a href="https://www.fool.co.uk/investing-basics/understanding-the-market/share-buybacks/">share buyback programme</a>.</p>



<h2 class="wp-block-heading" id="h-operational-challenges">Operational challenges</h2>



<p>At the generation stage of the pipeline, Foresight seems to be outperforming the wider renewable energy sector. However, moving further downstream to distribution is where things start to wobble. Network operator outages have prevented Foresight from fully capitalising on the strong solar environment.</p>



<p>This perfectly highlights one of the many external risk factors that the company has to contend with. But management seems to be taking action. With the bulk of outages concentrated in Australia, the firm&#8217;s begun divesting its assets to focus more on the UK market, which is currently outperforming.</p>



<p>Executing divestments can result in a leaner and more efficient operation. However, with renewable energy assets valued significantly lower compared to a few years ago, the firm runs the risk of destroying shareholder value if it sells its solar farms at a lower price than it acquired them.</p>



<h2 class="wp-block-heading" id="h-the-bottom-line">The bottom line</h2>



<p>Strategic uncertainty&#8217;s never pleasant to see. However, so far, management seems to be navigating the higher interest rate environment admirably. Dividend cover for 2025&#8217;s on track to land at around 1.3. That’s a bit tight compared to historical levels, but it still provides some wiggle room for error before dividends are potentially compromised.</p>



<p>Therefore, while this dividend stock undoubtedly carries risk, the high yield seems too good to ignore. That’s why I think investors may want to look at this income opportunity more closely.</p>
<p>The post <a href="https://www.fool.co.uk/2025/08/18/10-years-of-payout-hikes-this-dividend-stock-now-pays-a-9-2-yield-to-long-term-investors/">10 years of payout hikes! This dividend stock now pays a 9.2% yield to long-term investors</a> appeared first on <a href="https://www.fool.co.uk">The Motley Fool UK</a>.</p>
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