Millennials: How to Build a Green Energy Portfolio

Renewables are on the rise, which should spur millennials to scoop up green energy stocks like Polaris Infrastructure Inc. (TSX:PIF) right now.

| More on:
Man pointing at a recycling symbol

Image source: Getty Images

Ahead of the 2019 Canadian federal election, I’d suggested that investors should continue to have faith in green energy stocks. The Liberals have stated that they are aiming for net zero emissions by 2050. Millennials have proven to be very socially conscious investors as they have entered the market. Today, I want to discuss why investment in green energy stocks can fulfill that psychological itch while also providing strong growth and income for the long term.

Why millennials should run to green energy stocks

Renewable energy made significant strides over the past decade. A recent report from the Frankfurt School-United Nations Environment Program Center and BloombergNEF expanded on this growth. Over $2.7 trillion had been invested in this space over the past decade. Renewables managed to increase their share of the global power mix from 5.9% in 2009 to 13.4% in 2019.

Public and private sector leaders are touting the need for increased investment in green energy, as we come out of the COVID-19 pandemic. This is a great space for millennials to invest in right now.

Two renewable energy stocks with nice income

Polaris Infrastructure (TSX:PIF) is a Toronto-based renewable energy company. It operates geothermal and hydroelectric projects in Latin America. Shares of this green energy stock have climbed 16.9% in 2020 as of close on July 9. The company released its first-quarter 2020 results on May 21.

Adjusted EBITDA climbed to $17 million in Q1 2020 compared to $15.9 million in the prior year. Total revenue increased to $20.2 million over $18.6 million in Q1 2019. Meanwhile, Production MWh rose to 182,408 — up from 147,602 last year.

Shares of Polaris last had a price-to-earnings ratio of 10 and a price-to-book value of 0.7. This is attractive value territory in the middle of July. Millennials may also be interested in gobbling up income. The stock last paid out a quarterly dividend of $0.15 per share. This represents a strong 5.9% yield.

In early 2019, I’d suggested that investors should pile into TransAlta Renewables. Shares of TransAlta have dropped 6.7% in 2020 so far. Like its peers, its facilities have remained operational as essential services during the pandemic. TransAlta stock last paid out a monthly dividend of $0.07833 per share, representing a tasty 6.7% yield.

One more green energy stock to stash this summer

Millennials looking for green energy stocks should also target Innergex Renewable. This Quebec-based company operates as a renewable power producer in Canada, the United States, France, and Chile. Shares of Innergex have increased 16% in 2020 as of close on July 9. The stock is up 39% year over year.

On May 14, Innergex announced the acquisition of the 68 MW solar farm in Salvador. Innergex stock has been flat over the last three months. In Q1 2020, the company posted revenue growth of 5%. Millennials should consider Innergex for its earnings growth potential on the back of its aggressive acquisition strategy. It also offers a quarterly dividend of $0.18 per share, which represents a 3.7% yield.

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. The Motley Fool owns shares of and recommends Polaris Infrastructure Inc.

More on Dividend Stocks

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 Oversold Dividend Stocks to Buy Now for Passive Income

Top Canadian dividend stocks are on sale!

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Value Investors: 2 Canadian Stocks That Are Getting Way Too Cheap

Brookfield Corp. and Algonquin Power & Utilities are great contrarian candidates for value investors seeking a stock rebound.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

These Canadian REITs Could Help You Generate Passive Income

These REITs are some of the best to consider if you want passive income on top of solid growth over…

Read more »

stock data
Dividend Stocks

How to Make a $108K Portfolio in 10 Years With $0 in Savings

Dig into your budget and you're sure to come up with cash. Couple that with income streams and investment returns,…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Dividend Stocks to Create $90 in Passive Income Each Month

These valuable dividend stocks are the perfect option for those wanting high dividend yields that won't last forever, locking in…

Read more »

Dividend Stocks

Passive Income: How to Make $480 Per Month Tax-Free

Here's how Canadian REITs could pay you more than $480 per month in TFSA passive income

Read more »

edit Sale sign, value, discount
Dividend Stocks

3 Great Canadian Dividend Stocks Now on Sale

Top TSX dividend stocks are now on sale.

Read more »

Dividend Stocks

2 REITs You Can Safely Buy Even When the Housing Market Does Whatever

REITs are great investments to generate a passive income stream. Here are two options you can safely buy today and…

Read more »