A 12.65% yield? Here is the dividend forecast for this FTSE revenue share

We may have just entered 2025, but looking ahead to 2026 and 2027 provides an opportunity for investors to gauge dividend forecasts for potential stocks worth buying.

One high-yielding company looks set to grow significantly over the next few years. Here are the details to consider.

Benefits of renewable energy

The focus company is Foresight Solar Fund (LSE:FSFL), a member of FTSE 250. Its management team focuses on generating income for investors by owning and managing a portfolio of solar energy assets. Specifically, it makes money from the sale of electricity generated by solar farms, mainly through power purchase agreements (PPA) with suppliers.

Last year, the share price fell by 30%, and the dividend yield was 11.2%. The current yield makes it one of the highest income options in the entire index.

It usually pays dividends quarterly, and increases the price per share once a year. For example, in 2022 it was 1.74p, in 2023 it rose to 1.78p, and in the last few quarters it was 2.0p.

This route is attractive to income investors, as there is a history of rising payouts, which in turn helps increase the yield (assuming there is no insignificant movement in the share price). The dividend cover is currently about 1.0. This means that the income fully covers the dividend payment. This is a good sign.

I’m looking forward

According to analyst expectations, the announced June dividend could rise to 2.1p per share. In June 2026, this is expected to rise to 2.19p, in June 2027 to 2.27p.

So assuming the price stays at 70.5p, this could mean the yield for the calendar year 2026 will rise to 12.17%. By 2027, this could rise to 12.65%.

Yes, I need to be careful when looking at the next two years. It is unlikely that the price of the shee will remain at the same level. If the stock falls, the yield will increase further. But if the price jumps, the yield may be lower than my predictions. So investors need to take things with a grain of salt!

Noting down the concern

There are risks associated with this stock that you should be aware of. For example, the decline in stock prices over the past year has been attributed to lower energy prices. This reduces the company’s revenue potential. In addition, these large solar projects are financed with debt. The fact that interest rates have remained high for a long time in the UK means that borrowing in the future will be more expensive than previously planned.

Even with these risks, the yield is very attractive. If investors are aware of the potential concerns, I think it could be a good income stock to consider over the next few years.