2 Green-Energy Stocks That Are Poised Soar Over the Next +20 Years

Investment in renewable energy is ramping up, which should propel stocks like TransAlta Renewables Inc. (TSX:RNW) for the long haul.

| More on:
wind generation facility

The Canadian government has been enthusiastic in its push to adopt renewable alternatives in spite of our country’s reliance on the lucrative oil and gas industry. In 2017, the United States pulled out of the Paris Climate Accord, but most of the remaining signatories have vowed to adhere to its framework.

Today, we are going to look at two green-energy stocks that are well positioned to post big gains over the next few decades. Should you be bullish on renewables? Let’s take a look at the potential market.

Two visions for the fossil fuel industry

Last fall, Suncor Energy Inc. (TSX:SU)(NYSE:SU) CEO Steve Williams projected that the oil sands would still be producing heavy oil in a century from now.

A new study in the Nature Climate Change journal predicts that clean energy technologies will wipe out trillions in investment in what it called the “carbon bubble.” In the scenario it paints, the paper suggests that “a substantial fraction of the global fossil fuel industry eventually becomes stranded.”

The paper continues: “Reducing fossil fuel demand generates an overall positive effect for the E.U. and China and a negative one for Canada and the United States.” The paper also predicts that the changes will produce an over 1% shift in global GDP. It expects this cycle to mature by 2035.

The models project that this shift will occur even without an active push from policymakers, renewable alternatives are emerging as the more cost-effective option. Critics have dismissed the paper as alarmist and have pointed to the still-heavy global demand for oil.

Huge investments in clean energy

Merrill Lynch released a research note in June that forecast over $70 trillion in investments for the “low-carbon transition” through 2040. This took into account the massive growth trajectory of the electric car industry, renewables, battery and storage, and other solutions.

Whatever your position is on the debate over the long-term viability of the fossil fuel industry, there is significant capital being poured into renewable alternatives. With that in mind, here are two stocks to consider scooping up this summer and holding for the long term.

Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP)

Brookfield Renewable Partners owns a portfolio of renewable power-generating facilities across the globe. Its stock was down 8.8% in 2018 as of close on June 14. Shares are up over 37% over a five-year period, and the stock offers an attractive dividend of $0.49 per share. This represents a 6.1% dividend yield.

TransAlta Renewables Inc. (TSX:RNW)

TransAlta Renewables is a Calgary-based company that owns and operates energy generation and transmission facilities. In the first quarter, adjusted funds from operations increased $14 million from the prior year, and cash available for distribution jumped 16%. On June 13, the company announced a $150 million bought-deal offering of common shares, which sent the stock tumbling.

Shares were down 7.2% in 2018 as of close on June 14. The stock also offers a dividend of $0.23 per share, representing an attractive 7.5% dividend yield. It is a solid buy-low candidate right now.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. Brookfield Renewable Partners is a recommendation of Dividend Investor Canada.

More on Energy Stocks

tsx today
Energy Stocks

TSX Today: Stocks to Watch on Monday, December 5

Canadian stocks may remain volatile ahead of the Bank of Canada’s upcoming interest rate decision due on Wednesday.

Read more »

Energy Stocks

Here’s My Top Stock to Buy Now, and it’s Not Even a Question

Tourmaline is a quality energy stock trading on the TSX. Here's why I remain bullish on TOU stock right now.

Read more »

oil and natural gas
Energy Stocks

2 TSX Energy Stocks That Could Break Through the Roof in December 2022

Did you miss the energy rally? Here are two TSX energy stocks that still offer handsome growth potential.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Nearing Retirement? The 2 Best Energy Dividend Stocks to Buy Now

Exxon Mobil Corp (NYSE: XOM) should be on your list if you're close to retirement.

Read more »

oil tank at night
Energy Stocks

The Best Oil Dividend Stock for a Decade of Passive Income

Enbridge Inc (TSX:ENB) has a high dividend it could keep paying for many years to come.

Read more »

The sun sets behind a high voltage telecom tower.
Energy Stocks

Fortis Stock Is a Buy Regardless of Where the Market Goes

Looking for a stable stock for your portfolio regardless of market circumstances? Here is why Fortis stock is the perfect…

Read more »

Increasing yield
Energy Stocks

1 Oversold Dividend Stock (With a 9.9% Yield) to Buy in December 2022

This dividend stock fell into oversold territory and may soon come out of it, offering a short time to get…

Read more »

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

3 Renewable Energy Stocks That Are Too Cheap to Ignore

Renewable energy stocks are going to have a crazy decade. Right now, they trade at cheap prices that are far…

Read more »