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Green Energy vs Oil Sands: Which Stock Has the Edge?

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Two areas of growth where you have an opportunity to build a fortune are in oil sands and green energy. The sound investment choices in those industries are Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) and Northland Power (TSX:NPI). Each complements the other if you have both stocks in your portfolio.

Long-term investment

CNQ is an organically homegrown oil company that Canadian investors should be choosing. This $39.4 billion company was founded in 1973 in Calgary but was never taken seriously during its first 20 years of operation.

The fortunes of Canadian Natural changed because of the accelerated development of the oil sands in Athabasca. A window of opportunity opened, and all the company had to do was to capitalize. Canadian Natural did and the rest is history.

Today, Canadian Natural is unrelenting in growing its operations outside of Western Canada. The company generates billions in revenue from various sources. Aside from the oil fields in the North Sea and Europe, there are more profits from the light crude blocks in Africa.

Even off the shores of Gabon, Ghana, and the Ivory Coast, Canadian Natural has deepwater interests. The company expects 14.2% growth this year and 11.13% annual growth in the next five years. Given the 4.5% dividend, you have the assurance of money growth and future wealth before retirement.

Long growth runway

Northland Power offers patient investors the opportunity to earn more in the long term. This $4.67 billion independent power producer in the utility sector pays a juicy dividend of 4.6%.

The company is a developer, builder, owner, and operator of sustainable energy facilities, including natural gas, solar, wind, and hydropower. To date, Northland Power has an operating generating capacity of 2,429 megawatts, with 269 megawatts coming soon.

Keep in mind that clean and green energy is a top growth industry. Northland Power is now one of the industry leaders. Most of its projects are high quality, with attendant contracts that guarantee stable and predictable cash flows that could last for generations.

In addition to assets in Canada, Germany, and the Netherlands, construction projects are ongoing in Mexico and Taiwan.

Performance-wise, Northland Power is doing well. The stock is up 23.8% year to date with a potential upside of 23.5% more if you go by analysts’ predictions. The company has shown incredible performance since going public in 1997. A total return of 1,300% is a mean feat.

In the next five years, the annual growth estimate for Northland Power is 10.4%, but the company is on track to achieve a growth of 22.6% in 2019.

Excellent combination

The bullish sentiments for both stocks are reasonable. Canadian Natural is no longer the obscure utility stock it was once. Northland Power is just starting to spring to life. The companies are riding on strong momentum. It wouldn’t be a surprise to see the stocks rising to prominence in the coming years.

Building a fortune takes time. You need to have an excellent combination of high-yield dividend stocks in your portfolio, plus the patience to wait for the rewards. In due time you’ll get your money’s worth.

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 Christopher Liew has no position in any of the stocks mentioned.

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