Dublin and London-listed Greencoat given outperform rating

Davy has begun its coverage of Irish energy company Greencoat Renewables with an outperform rating for the newly listed firm.

Such a rating suggests the stock will likely perform better than the overall market.

Greencoat, which acquired part of the original Bord Gáis wind portfolio earlier this year, raised €270 million last month when it listed in an initial public offering (IPO).

It is the first renewable energy infrastructure company to list on the Dublin exchange, and the first euro-denominated renewable energy infrastructure company to list on the London Stock Exchange.

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Investors in the company include the State's Ireland Strategic Investment Fund and AIB, which helped finance the initial portfolio, comprising 137 megawatts of wind farm assets in Munster that the firm acquired this year from Canada's Brookfield Renewable Partners.

In a note to investors Davy said Greencoat “offers unique equity access to operating Irish wind assets which, buoyed by strong wind capacity factors, aim to pay a growing regular dividend over time.”

“Given the fund’s reinvestment policy, the structure of the REFIT scheme and the abundance of new assets coming on-stream in the next three years, we expect to see steady net asset value (NAV) growth,” said Davy analyst Joseph McGinley.

Greencoat Renewables, which was set up by UK renewable energy investment group Greencoat Capital, aims to use the proceeds from its IPO to acquire more assets, initially focusing on wind in Ireland before extending to other euro-zone countries where solar assets will also be on its shopping list.