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dydo

NRG Yield, Inc. (NYLD)

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dydo    1,391

The other part is that the company seem to ATM at $16.50. That is a bit ridiculous, this could have caused selling or maybe they were selling themselves. 

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heliostat    2

Thanks Robert, I look at parents and yieldcos as a pair these days after sune complex misadventures. My thinking currently is that if Dev 2.0 100m financed by equity and enables recycled growth to hit acquisition target the PEGI payout should as you pointed out drop to say 86% or similar. If a 6% yield at that point and current div steadyish that should be SP 27.50 approx (as you and others/company calculated ). (ie approx +25% from current) Whereas on NYLD at say $16.85 a 5.5% return (current 1.08 annualised) as you say (or more to to compensate for NRG issues) would be approx sp 19.60-$20.00 in 2018 (ie approx +16.3% from current SP taking lower end of range). [these are rough calculations and quote some of your work]. The difference as you say is in the number of steps , hence failure points for PEGI to get there.  However the potentially larger liquidity NYLD might have is a countervailing factor going forward. Will the little guys get squeezed as space matures?

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dydo    1,391

I took a quick look at the NYLD 2017-2018 dividend growth and lowered it to about 12% up to 2019 Q1. Moving a scale of price between 17 to 20, there is about 35% return potential if dividend bought shares and 20 was the price at the end of the range. Not too bad, generally speaking watching the money grow. Of course, the opportunity here is when price dwindle more shares can be bought.

Going back to PEGI, the first obstacle is to get $100M. 5M shares will blow the CAFD out of the water if no further acquisition is not made. This is why I think they will sell more shares. I doubt they will get to $27 even if they are simply considering. They use the revolver as their IR is lower on this than yield and it is deductible.

Second, the 6% is just an indicator. If the company chooses to finance at 7%, it will be selling shares right and left and you will see zero return on equity. To be honest, PEGI is spent on cafd. we are talking $143M against $165M high-end range.  Their liquidity is all money borrowed by Q2. I would be patient, I think there are more hiccups ahead of PEGI than NYLD. 

I can see that NYLD can take on another 250MW this year, and another 250MW of solar next year. This can bring the dividend to about $1.60 by the time 2022 arrives. Equity alone could give you 58% return without dividend.

 

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dydo    1,391

I did not realize but Barclay has $24 target on NYLD posted on April 21st.

I am waiting for any updates from analysts to see what drove the stock down.

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explo    669

If we ignore TERP, GLBL and CAFD I see NYLD, PEGI and ABY as a group of yieldcos lagging the appreciation seen in the Canada listed ones (RNW, NPI, INE) and the strongly sponsored US ones (NEP, BEP). So, odyd, should ABY also be reviewed at this time? I've not done any review myself yet. I might pick one oppotune yieldco while waiting for CSIQ instead of my double JKS exposure if there is some obvious pick. Right now without reviewing I would guess that NYLD is the best candidate. Especially since I'm quite IDR adverse/excited depending on whether I invest in yieldco or sponsor side, but maybe all 3 of these look good on that point..? I remember NYLD being completely IDR free..

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heliostat    2

Wondering about NYLD vs NYLD.A  which one is best? The spread between the two at closing was NYLD.A 40 cents cheaper. The beta on NYLD.A looks higher, (1.2 vs 0.98) which is telling although dividend stated to be the same.  Is NYLD.A just more thinly traded ?? Do the voting or security holder rights differ?

 

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dydo    1,391
2 hours ago, explo said:

If we ignore TERP, GLBL and CAFD I see NYLD, PEGI and ABY as a group of yieldcos lagging the appreciation seen in the Canada listed ones (RNW, NPI, INE) and the strongly sponsored US ones (NEP, BEP). So, odyd, should ABY also be reviewed at this time? I've not done any review myself yet. I might pick one oppotune yieldco while waiting for CSIQ instead of my double JKS exposure if there is some obvious pick. Right now without reviewing I would guess that NYLD is the best candidate. Especially since I'm quite IDR adverse/excited depending on whether I invest in yieldco or sponsor side, but maybe all 3 of these look good on that point..? I remember NYLD being completely IDR free..

I have not looked at ABY, as it has more conventional assets, but when I looked at at the surface I saw low yield in comparison when yield is not only a gauge of the amount of money you get from the dividend but a level of potential equity return if the yieldco is priced as stable.

NEP is well priced but I find ABY to be at the same level. Here the amount of dividend makes NEP a lot more interesting besides their growth is a lot more possible having a very powerful sponsor. IDR would be a concern, but I find them in this case, to be an adjustable stream. When money is made comfortably it can be paid, if not, it can be pulled out and reduced, as it is not an obligation is a privilege, securing further growth.

PEGI just seems risky to me, at this stage at least. NYLD has a risk as their sponsor is weaker, but I am holding it the most of as it has attractive yield the best at this point liquidity, and what it appears low cost of capital.

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dydo    1,391
41 minutes ago, heliostat said:

Wondering about NYLD vs NYLD.A  which one is best? The spread between the two at closing was NYLD.A 40 cents cheaper. The beta on NYLD.A looks higher, (1.2 vs 0.98) which is telling although dividend stated to be the same.  Is NYLD.A just more thinly traded ?? Do the voting or security holder rights differ?

 

I do not know the descriptive value, not sure where the arbitrage comes but there is a technical reason for it.

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heliostat    2

Thanks. I cant find the details but noted that the 12 month high is different and lower for the NYLD.A and share count lower and delta vs NYLD not constant so I will avoid. Nothing on NYLD site , might need to email lR .

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