Saeta is a 800m€ Spanish Yieldco, with 900MW in solar and wind farms with a very conservative approach focused on growth despite its 7.8% dividend. It’s targeting 10% growth and considering its small size and its pipeline is very likely to achieve in the next 10 years.
During the first 6 months 2017, Saeta has added 100MW (+12% YoY) and increased EBITDA +23%, reaching 110m€ and it’s in the process to acquire 144MW by the end of year. Saeta estimates an EBIDTA of 230M€.
In the pipeline, Saeta has a RoFO (right of first offer) of additional 800MW and ACS (its holding partner) has won a tender for 1.5GW. Altogether, Saeta could have 3GW capacity in the next 7 years (4 times bigger than today).
To this end, the company is focusing on decreasing debt and on saving precious resources for new acquisitions.
Of course, part of this growth has been financed with Debt (1,317M€ Net Debt),
It is still a manageable position, considering that:
- 5,7x EBITDA
- 4,3% interest cost (total of 75M€)
- Moreover, Saeta dedicates 90-100M€ of its CAFD to Debt Reduction, allowing more growth in the coming years.
Saeta has a nice dividend of 7.8%, dedicating only 40% of its Operating Cash Flow, because it has an ambitious plan for growth. However, I am expecting dividend to grow at a slower pace (3-4% yearly) than EBIDTA allowing to reduce debt faster and purchase more assets.
Saeta is interesting for multiple reasons:
- High dividend (7.8%),
- opportunity to double in the next 5-7 years
- conservative policy that allows reduce Debt by 90-120M€ and add new plants every year.
Saeta Yield is not available in USA, but you can find in the spanish market with the ticker: SAY.MC