this revolving fund offers sunny prospects to investors interested in clean energies
Indeed, the growing popularity of ESG funds has helped the company’s shares trade at a premium of more than 20% to their net asset value (Nav) last year. Although they now trade at a premium of around half that amount, their price may still be viewed as prohibitive by some investors.
Investors may also be concerned about the prospect of rapid change in the renewable energy sector. Although the UK and countries around the world have ambitious carbon emissions targets, the path to net zero status remains somewhat blurred. New technology supported by increasing levels of investment could ultimately replace today’s renewable energy assets.
At the same time, the reliability offered by assets such as nuclear power could limit growth opportunities for the wind, solar and other forms of renewable energy assets in which Bluefield Solar is invested. This may be particularly relevant after a bad year for wind power production which contributed to the rise in gas prices.
However, in Questor’s view, Bluefield Solar offers relatively attractive long-term income prospects within a diversified portfolio. Its prospects for high yield and relatively stable dividends could prove to be useful allies if inflation rises and interest rates remain low.
Its plans to diversify into other forms of renewable energy assets could reduce risk and improve long-term returns. Additionally, the growing popularity of ESG-related investments may support, if not extend, its current premium at Nav.
Quaestor says: buy
Closing price: 122.4p
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