Ethical investing comes in many forms. Investors may want to tap into the growth potential of green power. Or they may wish to invest in companies scoring highly on environmental, social, and governance (ESG) criteria. Either way, investors seeking a morally switched-on play have a range of sources of ethical upside on the TSX.
Let’s explore two major themes.
The green power play
Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP) is not one of the most stable stocks on the TSX for green power upside. Its dividend yield of 4.5% is largely unprotected. Investors may even expect it to be cut or suspended.
But this name brings world-beating management savvy from the Brookfield stable. It is highly diversified across energy types and global regions. It’s also looking at a projected 140% in total returns by 2025.
Value investors certainly have a tough choice to make when it comes to Brookfield Renewable Partners. Its current share price of $67 exceeds its average analyst target price. Analyst consensus projects two key price points, with a high target of $73 and a low of $49. Price entry points therefore depend on how bullish an investor is on growth in the green economy.
Don’t try to time the bottom on this one, though. A significant dip is not likely to be forthcoming given the global trend toward green power. And yes, Brookfield Renewable Partners could look better on the fundamentals. But this name shines in areas other than its data. What an investor gets with this stock is hard to find elsewhere.
The alt-meat stock
Restaurant Brands International (TSX: QSR)(NYSE: QSR) may not be the first name one thinks of when it comes to the green economy. But this name is a powerful play for meat-free upside. Restaurant Brands has worked with both Beyond Meat and Impossible Foods, making it a rare play for both names.
Impossible Foods is not yet publicly traded, so a de facto stock like Restaurant Brands is the only way to gain access to its growth potential. However, just as Loblaw is a play for Beyond Meat (the grocery chain stocks its products).
Kroger is now a play for Impossible Foods for the same reason. However, for an arguably purer play on alternative meat, Restaurant Brands may be a better all-rounder.
Meat-free foods offers a rare play for steep upside in an ethically sound industry. However, even the thesis for growth is enough to get invested. Meat shortages could become the supply chain disappoint of the summer.
Prices for meat could skyrocket as a result. If alternative meat makers such as Beyond Meat and Impossible Foods can fill this void, the vegan option could go mainstream.
The bottom line
Brookfield Renewable Partners could be better value for money. But investors have a clear buy here that matches management expertise with strong, diversified global growth.
This is a stock to go long on access to the clean energy boom in emerging markets around the world. Match this with upside from the alt-meat boom and investors have a solid tag team for ethical growth.
