Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » These two FTSE 250 shares yield 8.9% and 9.3%. Can that last?
    News

    These two FTSE 250 shares yield 8.9% and 9.3%. Can that last?

    userBy userJuly 4, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    A couple of FTSE 250 investment funds in a similar business both have juicy yields at the moment. One offers just below 9%, while the other is even higher.

    Could those yields last – and ought I to buy the shares in question for my portfolio?

    Making money from the sun

    The 8.9% yielder is Bluefield Solar Income Fund (LSE: BSIF), while 9.3% is on offer at Foresight Solar Fund (LSE: FSFL).

    Over the past five years, however, those two shares’ prices have fallen 25% and 21%, respectively.

    That partly explains the high yields. Another part of the explanation has been annual increases in the dividend per share during that timeframe.

    Those annual increases have continued at Foresight Solar Fund. This year, however, has seen Bluefield Solar Income Fund hold its dividends per share steady for the payments declared so far.

    So, given the high yield and also sizeable discounts to net asset value implied by the current share prices (Foresight’s discount is 22% and Bluefield Solar’s is 20%), what is going on here? What might it signal about future dividend streams?

    Variable financial performance

    Bluefield has seen revenues grow steadily over the past five years. But income has moved around significantly. Last year, the fund actually made a loss of £10m.

    While the fund has locked in the price of some of its power sales, the majority of its output is not sold at a pre-agreed rate. This means that there is a risk weaker energy prices could hurt earnings.

    The flip side of that is also true, though: higher energy selling prices could boost profits.

    Meanwhile, Foresight swung back to a profit last year after making a loss the year before. Its revenues have also moved around in recent years.

    Challenges face the sector

    Something I think these two FTSE 250 funds have in common is that they are in a sector with fairly unpredictable economics.

    In March, Foresight pointed to “poor weather and persistent macroeconomic headwinds in the UK” as helping to explain why listed renewables companies may be trading at a discount to net asset value. It continued that “meaningful returns of capital will inevitably lead to a reduction in the listed renewables asset class, and we are likely to see examples of successful consolidation”.

    In other words, there may be mergers or takeovers in the sector. Given that some solar companies are trading at a deep discount to net asset value, such consolidation would not necessarily be value-creating for long-term shareholders.

    The economics of the sector have proven challenging so far. A shift in policy in recent years means that solar energy may not have as large a role in long-term UK power generation as some operators once hoped. That raises the question of how sustainable the current dividend yields will be in years to come. If energy prices weaken substantially, I see a risk that the dividends will be cut.

    So, I see the high yields of both of these shares as a warning sign suggesting that the City is concerned about the risks involved in investing in the sector. Even a high yield can be unattractive if a share price falls enough.

    Given that context, I do not plan to add either share to my portfolio.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleRay Dalio warns of economic pain after Congress passes Trump spending bill
    Next Article Why is the Secretary of Transportation Begging Americans to Take More Road Trips? — Streetsblog USA
    user
    • Website

    Related Posts

    This old-school tech stock is beating all Magnificent 7 shares in 2025, including Nvidia

    July 4, 2025

    £10,000 invested in Santander shares 1 year ago is now worth…

    July 4, 2025

    US labor market adds 147,000 jobs in June while unemployment falls to 4.1%

    July 4, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d