Bluefield Solar Income Fund (LSE:BSIF) published its first-quarter net asset value update, which provided more evidence for broker Stifel that the shares "offer some value and a decent yield" with the fund offering more protection from falling power prices than other funds.
The latest NAV was 133.9p, down 1.5% from the end of December, primarily due to the latest dividend payment, with little impact from power prices due to the high level of forward sales.
The Bluefield board reaffirmed its guidance of a full-year dividend of not less than 8.8p for the financial year to 30 June, which is expected to be covered by earnings.
The only negative for NAV was related to seasonality, with the deduction of the interim dividend of 2.2p in a period of low revenue receipts due to modest generation over the winter period, Stifel analyst Iain Scouller said.
"Whilst power curves were down for the near term, this only reduced NAV by -0.3p, with a high level of forward sales limiting the negative impact, compared with other funds which have greater exposure to the power price."
Bluefield has over 92% of power sales hedged for the current year and 81% through 2025.
Taking into account this latest NAV, the shares at 107p are on a 20% discount, the analyst noted, which when combined with the dividend yield of 8.2% "looks relatively attractive".
Scouller said he was slightly wary of two things: leverage of 74% of NAV, which is 42% of gross asset value, and that he thinks that as the old power purchase agreements expire, "new PPAs are likely to see lower prices achieved, which are likely to mean some decline in revenues in the next year or two".
Overall, he said, the shares offer value and a decent yield, with Stifel retaining a positive recommendation with a fair valuation of 114p, a 15% discount to NAV but above the last closing price of 106.8p.