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Introduction
The last two decades have seen an increased awareness of the issue of climate change across the world.
With issues like global warming, consumers are being aware of the need to find replacements to fossil fuels.
People, companies, and governments are now investing heavily in renewable energy.
This has seen an increase in Canadian renewable energy companies on the Canadian stock market.
Not only are these companies making strides at solving renewable energy needs in Canada and North America but also presenting investors with an opportunity to make money while helping the world.
A win-win in any investor’s book.
Disclaimer
The equity investments are subject to market risks and may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. So please invest at your own risk.
What Is Renewable Energy?
Renewable energy is energy that’s sourced from renewable sources such as wind, solar, geothermal heat, Bío energy, and hydroelectric power.
It is worth noting that Canada is a world leader in renewable energy production.
Renewable energy sources constitute 18.9% of Canada’s energy supply.
Renewable energy companies tend to incur high upfront investment costs to build up the necessary infrastructure to harness said energy.
This causes volatility in the short term but long term, as they streamline operations and start monetizing their energy supply services, these companies become very attractive cash-flowing investments.
In today’s review, we will be looking at the top Canadian renewable energy stocks for investors interested in clean energy to look into.
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Best Canadian Renewable Energy Stocks
Northland Power(TSX: NPI)
Northland power is a power supply company that was founded in 1987 and went public in 1997.
Northland Power has infrastructure assets in Latin America, North America, Asia, and Europe and has interests in clean burning, solar, and wind energy.
The company currently has 3 gigawatts of generating capacity and intends to increase that to 14 gigawatts when underway projects come to completion.
The company has about 1,154 employees.
Northland Power has a market cap of $8.99 billion with assets worth $11.4 billion (as of 2020).
Northland power had a CAD$2.1 billion revenue year in 2020 and recorded a net income of $0.5 billion in the same year.
The company has a forward P/E ratio of 22.45%, a forward dividend yield of 3.05%, and a dividend payout ratio of 49%.
Northland Power’s common shareholders have received regular dividend payments since the company went public and this is a great renewable energy stock to look into.
Transalta Renewables (TSE: RNW)
Transalta renewables is a subsidiary of Transalta corporation, an electricity generation company headquartered in Calgary, Canada.
Transalta Corporation was founded in 1911 but its Transalta renewables subsidiary was founded in 2013 in which it owns a 60% stake.
The company has most of its infrastructure based in North America (U.S and Canada) with some in Australia.
The company operates several facilities that include 13 hydro,22 wind,1 solar,6 gas, and 1 battery storage facility.
Wind power and Natural gas account for most of Transalta’s renewables income.
Transalta renewables are the largest wind energy producer in Canada.
Transalta renewables pay a management fee to contract its parent company to manage its operations and its employees.
The company has about 1,476 employees
Transalta renewables have a market cap of CAD$5.56 billion with assets worth $9.7 billion (as of 2020).
Transalta renewables had a CAD$2.1 billion revenue year in 2020 and recorded a net income of $0.5 billion in the same year.
The company has a forward P/E ratio of about 18%, a forward dividend yield of 6.56%, and a dividend payout ratio of 218%.
The company’s high dividend ratio makes it a very attractive investment and what’s more interesting is that Transalta renewable pay out its dividends monthly.
This makes it a great income stock.
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Boralex Inc (TSE: BLX)
Boralex Inc is a renewable energy company that was founded in 1990 but started publicly trading in 1997 and is based in Kingsley Falls, Quebec, Canada.
The company was formed through a joint venture comprising of Laduboro, Exar, and Albany oil.
The company is involved in developing, building, and operating renewable energy facilities.
The company has operational interests in the United States, the United Kingdom, France, and Canada.
In France, Boralex inc is notably the largest independent producer of onshore wind power.
The company’s current energy supply capacity is 2.5 gigawatts with projected growth to 6.5 after the completion of its pending projects.
Boralex Inc is a pioneer in corporate social responsibility integration into its strategic planning processes.
To provide investors with more secure earnings and operational results over the long term Boralex contracts its assets in indexed fixed-priced energy contracts.
This currently secures 98 % of their capacity.
The company currently has about 500 plus employees.
Boralex Inc has a market capitalization of $3.92 billion.
The company has a forward P/E ratio of about 46%, a forward dividend yield of 1.71%, and a dividend payout ratio of 115.79%.
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Algonquin Power and Utilities Corporation (TSE: AQN)
Algonquin Power is a Canadian renewable energy company and utility conglomerate that was founded in September 1997 and started publicly trading in December 1997.
The company is based in Oakville, Ontario, Canada.
The company is involved in hydroelectric power, natural gas, and electrical utilities serving over 1 million customers in 1 Canadian province and 12 U.S states.
The company operates 41 energy facilities that include 1,217,660 solar panels, 1,541 wind turbines, and 55 hydroelectric power generators as per their latest annual report.
The company currently has 2.3 gigawatts of gross generating capacity rising to 4 gigawatts with current projects taken into account.
The company has about 3,400 employees.
Algonquin Power has a market cap of $8.99 billion with assets worth $11.7 billion (as of 2020).
Algonquin Power had a CAD$2.1 billion revenue year in 2020.
The company has a forward P/E ratio of 15.62%, a forward dividend yield of 6.66%, and a dividend payout ratio of 230.87%.
Algonquin Power’s high dividend yield makes it a very attractive investment and what’s more interesting is that Transalta renewable pay out its dividend, especially to income-oriented investors.
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Brookfield renewable partners (TSE: BEP)
Brookfield Renewable partner is a subsidiary of Brookfield asset management which owns a 60% stake in the company.
The company was founded in Brazil in the 1890s, started publicly trading in 1999, and is based in Toronto, Ontario, Canada.
Brookfield asset management is one of the world’s largest clean energy asset managers and Brookfield renewable partners are the largest renewable energy stock.
The company has operational interests in North America, South America, Europe, and Asia.
The company has interests in hydroelectric power, solar power, wind power, and energy storage.
The company currently has 21 gigawatts of generating capacity and intends to increase that to 69 gigawatts when underway projects come to completion.
The company’s credit rating is BBB+ with $4 billion worth of liquidity.
Brookfield renewable partners have a market cap of $11.08 billion with assets worth $30.9 billion (as of 2017).
The company has a forward P/E ratio of 366.36% and a forward dividend yield of 4.37%.
Brookfield Renewable partner is a great stock for investors looking for a good dividend in a stable and well-diversified company.
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Conclusion
As the world moves further away from fossil fuels in an attempt to lower greenhouse gas emissions, renewable and green energy stocks in Canada will see an increase not only in popularity, but also in investment return for investors.
