TSX Stocks: Here’s the Top Long-Term Industry

Canadian investors looking to take advantage of the market crash and buy top TSX stocks should consider investing in this industry.

| More on:
Clean energy

Image source: Getty Images

Over the last few months, there have been a lot of opportunities for investors to find some great TSX stocks. Even still today, some discounts aren’t as high, but there are plenty of opportunities to find solid long-term investments.

The general pullback in stocks is an excellent opportunity for long-term investors. A lot of high-quality stocks were still considered buys just four months ago, so to get them at a discount now is a great opportunity.

When looking for a new investment, I’d first advise investors to consider what they may be missing from your portfolio. If you need some more stability in your portfolio, then I’d consider buying a defensive stock first.

And conversely, if you have a lot of defence and want to expose your portfolio to more upside potential, you may want to consider buying a growth stock.

If your portfolio is already well diversified, and you are just looking for a new, top long-term TSX stock to add, I would consider the renewable energy space.

Two of the top stocks on the TSX that are alternative energy producers are Northland Power (TSX:NPI) and TransAlta Renewables (TSX:RNW).

Green energy growth stock

Northland is one of the fastest-growing renewable energy stocks on the TSX. The stock has wind, solar, and biomass assets, which make up its renewable generation.

The majority of Northland’s renewable production, however, comes from onshore and offshore wind farms.

The company’s offshore wind farms are located in Europe, with the rest of its generating assets situated across Canada. In total, Northland has over 2,000 megawatts of generating capacity.

There are several reasons why Northland is so attractive, but the main reason is its growth potential.

Currently, the company has more than 1,000 megawatts of assets in development. When these assets come online, Northland will see a 50% jump in generating capacity, giving it a significant runway for growth.

The stock is also extremely stable. Roughly 95% of its production is contracted through 2020. Plus, Northland’s power-purchase agreements have a weighted average duration of more than 10 years.

Lastly, the company pays a stable dividend that currently yields more than 4.1%.

Northland is a top TSX stock to buy today. It’s one you can count on in the short term through market volatility. It’s also a stock you can count on to grow significantly over the long term.

High-yield TSX stock

TransAlta Renewables is an attractive TSX stock not for its growth potential, but for its stability and dividend yield.

The company has wind, hydro, and solar renewable assets with operations in Canada, Australia, and the United States.

In total, the company has roughly 2,500 megawatts of generating capacity. However, the company currently doesn’t have any projects in development.

This could change over the short term, but at present, if you are buying TransAlta Renewables, it’s for its stable dividend.

At current share prices, the dividend yields roughly 6.6% and has just an 80% estimated payout ratio for this year.

Also, similar to Northland, it has roughly 95% of its production capacity contracted for 2020 and over 10 years average weighted length of its contracts.

Lastly, RNW also has the lowest debt load of all its renewable peers, putting it in a robust financial position.

Bottom line

Renewable energy is the top industry to invest in today for its stability and long-term growth potential.

Both Northland and TransAlta Renewables are not just top green energy stocks; they are also among the most attractive stocks on the TSX.

These attractive share prices may not last, though, so if you’re looking or a top long-term investment, I’d act 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 Daniel Da Costa owns shares of NORTHLAND POWER INC.

More on Dividend Stocks

money cash dividends
Dividend Stocks

TFSA: 3 of the Best Canadian Dividend Stocks to Buy This Year

Are you looking for some of the best Canadian Dividend stocks to buy this year? Here are three great options…

Read more »

Man data analyze
Dividend Stocks

2 Recession-Tough Stocks to Buy in February 2023

TSX stocks, such as Jamieson Wellness, are trading at compelling valuations and might deliver stellar gains to investors.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Defensive Investors: 3 Stocks to Shore Up Your Portfolio

Fortis is a defensive stock with an impressive track record.

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

Passive Income: 2 Cheap Stocks to Buy and Never Sell

Buying dividend stocks cheap and discounted is a strategy many value investors pursue to maximize the return potential.

Read more »

Female friends enjoying their dessert together at a mall
Dividend Stocks

Dividend Stocks: Will Debt Load Put a Damper on This Top Stock in 2023?

This dividend stock has a very solid track record of revenue and cash flow growth, ,as well as dividend growth,…

Read more »

A plant grows from coins.
Dividend Stocks

How to Invest in One of the Most Important Commodities in the World (It’s Not Gold)

Many things we take for granted may offer economic value and a powerful investment opportunity beyond commodities like gold or…

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Need Passive Income? Turn $15,000 Into $1,016 Annually With These 2 Dividend Stocks

Canadian investors with limited capital can create passive-income streams from two high-yield dividend stocks.

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

Why Brookfield Infrastructure Partners Stock Rose 11.8% Last Month

Most, if not all, investors could do well by buying quality dividend stocks like Brookfield Infrastructure Partners (TSX:BIP.UN) on dips.

Read more »