2 Renewable Energy Stocks for Your Portfolio

Innergex Renewable Energy Inc. (TSX:INE) and TransAlta Renewables Inc. (TSX:RNW) are two renewable energy companies that have great growth and dividend prospects for investors.

| More on:
The Motley Fool

Renewable energy is growing at an extremely fast pace. By some accounts, over 50% of new global power generation facilities were renewable in 2015.

This one statistic proves that the long-standing view that renewable energy is cost-prohibitive is false as more and more countries opt for renewable energy sources to power homes over fossil fuels.

Costs for solar and wind units in particular have fallen considerably in recent years. This has become a catalyst for consumers and investors to jump on board with renewable energy sources as viable alternatives to fossil fuels.

Another factor that has fueled the growth of renewable energy producers is the reduction in price of fossil fuels they intend to replace. Here’s a look at some of the main players in the Canadian renewable energy market and what investors can expect from them.

Innergex Renewable Energy Inc.

Innergex Renewable Energy Inc. (TSX:INE) is not a new entrant to the renewable energy power-generator space. The company has been providing renewable energy for over 25 years.

Innergex’s breakdown of power production is 70% hydro, 20% wind, and 10% solar. In terms of total output, the company produces 707 MW of power with a total of 34 facilities located in Canada and a further four sites and 186 MW under construction.

The company has ramped up production in recent years. Power generation has doubled in the past six years and additional increases in production are planned as new acquisitions and projects come online.

In terms of expansion, Innergex has four projects currently under construction that should be operational within the next two years. An additional 25% boost in capacity will be realized through those new projects. Innergex announced this week the completion of the acquisition of seven wind power projects in France with a total capacity of 87 MW.

Innergex currently trades at $13.80, up nearly 22% year to date. Innergex has a quarterly dividend of $0.16, giving the company a yield of 4.64%, making the company a great option for both dividend and growth seekers.

TransAlta Renewables Inc.

TransAlta Renewables Inc. (TSX:RNW) is a spin-off from TransAlta Corporation, which has a 64% stake in the Calgary-based renewable energy company.

TransAlta Renewables has 32 facilities scattered across Canada that produce 2,500 MW of power. The breakdown of production is 51% wind, 44% gas, and 5% wind. Despite only having 5% wind power, TransAlta Renewables is the largest wind power generator in the country and one of the largest producers of hydroelectricity in the U.S., Canada, and Australia.

TransAlta Renewables currently trades at $12.29 and is up over 18% year to date. As impressive as the growth prospects are for the company, TransAlta Renewables also pays out a monthly dividend of $0.07 resulting in a yield of 7.16%. The company has a history of raising the dividend for three consecutive years, and if current trends are to continue, the company will likely increase the dividend again.

Given TransAlta Renewables’s current growth and dividend payouts, the company represents a great investment opportunity for those investors seeking long-term growth and dividend income.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

More on Energy Stocks

grow dividends
Energy Stocks

TSX Energy Index Down 6.6%: How to Take Advantage of the Sell-Off

Investors can focus on generating passive income from three high-yield energy stocks while waiting for oil demand and prices to…

Read more »

Man data analyze
Dividend Stocks

Got $5,000? Buy These 2 Stocks and Hold Until Retirement

If you have $5,000 to invest, here are two TSX stocks you can buy and hold as part of your…

Read more »

Oil pumps against sunset
Energy Stocks

Better Buy: Suncor Stock or Enbridge?

Energy stocks are under pressure. Is Suncor or Enbridge now oversold?

Read more »

Increasing yield
Energy Stocks

Buy the Dip: 1 Blue-Chip Energy Stock With a Rising Dividend Yield

Suncor Energy (TSX:SU) stock is approaching deep-value territory, making it a top pick for Canadian value and income investors.

Read more »

oil and natural gas
Energy Stocks

Could Cenovus Energy Stock Hit $30 This Year?

Should you buy Cenovus Energy stock now?

Read more »

Oil pipes in an oil field
Energy Stocks

3 High-Yield Energy Stocks to Earn Passive Income for Years

High-dividend-paying TSX stocks such as Enbridge and two others offer investors the opportunity to generate passive income in 2023.

Read more »

Dollar symbol and Canadian flag on keyboard
Energy Stocks

2 Undervalued Canadian Stocks to Buy in March 2023

With the market on the cusp of a potential rebound, here are two undervalued stocks that should be on any…

Read more »

Gas pipelines
Energy Stocks

Better Energy Stock to Buy: Suncor or Canadian Natural Resources?

Suncor and Canadian Natural Resources are off their recent highs. Are these stocks now good to buy?

Read more »