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NRG Yield Pledges to Hit Dividend Targets Through 2018

NRG Yield is an offshoot of NRG Energy Inc., NRG -6.21 % the largest independent electricity generator in the U.S., and operates assets formerly owned directly by NRG Energy. Listed in 2013, NRG Yield pays out most of its profit to shareholders as part of a corporate structure that offers tax benefits.

Known as yieldcos, NRG Yield and other recently listed power companies were pitched as a relatively safe bet because they have long-term contracts to provide electricity to utilities. Investors rushed into the offerings, lured by the companies’ projections of dividend growth when interest rates and bond yields were historically low. Yieldcos are similar to master limited partnerships, which have traditionally focused on oil and natural-gas industries.

NRG Yield disappointed investors in August, when it cut by 18% the size of its total annual payout for 2015 owing to the absence of strong winds...


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