It’s been an interesting week for stocks hitting their 52-week highs. Earlier in the week, only 10 stocks on the TSX were beating their year-long records, though this number had risen to 26 high-flying companies heading into the weekend. That initially low number of popping stocks spoke to a flat TSX weighed down by weak sectors such as telecoms and energy. However, two clean energy players were notably present in the list.
A muscle-building energy player getting back on its feet
AltaGas (TSX:ALA) has been utilizing a smart strategy of late, streamlining its business by divesting itself of assets and converting fat into muscle in its balance sheet. A key stock for investors watching businesses actively stripping out risk, AltaGas has been getting lean and biting down on its debt load.
Popping the $20 threshold this week, AltaGas will find that pumping iron attracts fresh investment going forwards, with debt servicing and key asset sales helping to re-position the stock for post-DRIP growth and a renewed dividend payment scheme. However, dividend-reinvestment programs are not necessarily a bad thing for investors, since accumulating shares accrue more dividends, which in turn accumulate more shares.
AltaGas is a strong play not only for value but also for ready diversification in the energy space. Its infrastructural operations include a midstream segment comprising liquefied natural gas processing and the sale of non-essential pipeline assets, while its utilities segment operates in the gas distribution space. AltaGas is also active in power generation through gas, wind, hydro, and biomass sources.
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A clean energy stock with room to run
Weighing in at 12th place on the inaugural TSX 30, Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP) is another key ticker scaling new 52-week heights as it entered the $8 range heading into the weekend. A true international player that is sometimes an event-driven play for momentum, such as last year’s fleet of Chinese trucks packing Ballard tech — a partnership that came with a cool 11% share price boost.
Active in fuel cell development, Ballard is a strong play for investors of an environmental mindset. Building cost-effective fuel cell products for ad hoc business requirements, Ballard is a maneuverable company that can play to the strengths in the engineering market delivering bespoke power production solutions. The stock has been wildly popular with investors who have driven its share price up 232% in three years.
Ballard is an especially strong play in the growing green-economy space, with a focus on power-optimized fuel cell design and production. A full-business operation, Ballard imagines and engineers its products as well as retails them. By drawing on hydrogen fuel in combination with oxygen, Ballard is able to create clean energy cells that generate revenue from a number of international markets such as Asia and Europe.
The bottom line
While it remains to be seen whether AltaGas or Ballard can keep up the positive momentum, both stocks represent quality businesses worthy of investment that can grow over time in their respective fields. Both stocks boast lean balance sheets, sound fundamentals exhibiting good value for money, and strong green energy credentials.
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 Victoria Hetherington has no position in any of the stocks mentioned. AltaGas is a recommendation of Stock Advisor Canada.