8Point3 Energy reported a second-quarter profit of $0.50 versus consensus expectations of a loss of $0.01. For the second quarter of fiscal 2016, 8point3 Energy Partners reported revenue of $13.5 million, adjusted EBITDA of $17.4 million and cash available for distribution of $10.3 million. As of the end of May, the partnership's portfolio consisted of interests in 525 megawatts (MW) of solar generating assets.
"We now view CAFD as a relative safe haven for investors looking for exposure to the alternative energy space given expected weak 2017E U.S. utility-scale demand," analyst Jon Windham wrote in a note.
"Compared with the module manufacturers, CAFD's ROFO pipeline visibility gives us more confidence in the near-term growth prospects and fairly predictable nature of CAFD's dividend payout," Windham continued.
The partnership declared second quarter 2016 distribution of $0.2325 per share, an increase of 3.5 percent over the first quarter and in line with guidance of 12–15 percent annual growth. It forecasts third-quarter distribution of $0.2406 per share, an increase of 3.5 percent versus second quarter.
Windham expects CAFD to be able to sustain this growth through 2017 and likely into 2018 given management's relatively more consistent and conservative approach to managing the payout ratio.
The analyst raised his full-year EPS estimates on the partnership to $0.49 from $0.32.
"We prefer CAFD's strong sponsor support and relatively more conservative approach given access to equity financing remains a challenge," the analyst added.
At time of writing, units of 8Point3 Energy had risen 0.95 percent to $15.96 on the day.
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