Bluefield Solar Income Fund (LSE:BSIF) has a decent dividend yield of 8.9% and the dividend cover is still high, with the managers forecasting two times cover in the year ending next June, according to broker Stifel.
However, the broker believes dividend covers may decline across the sector in the next year or two as power agreement price fixes decline and higher long-term interest costs become reflected in the funds' returns.
“Having taken on board these potential negative scenarios for the sector, we do think on a trading basis Bluefield offers a trading opportunity and decent 'value' on a 25% discount to this latest NAV.
“We upgraded our recommendation to Positive from Neutral when the results were pre-announced with a fair value of 116p, a 15% discount to this latest NAV.”
Shares in Bluefield rose 2.7% to 105.2p on Wednesday.