3 Top Renewables Picks to Buy Right Now

Here are three top ESG picks I’d invite investors to consider today.

Clean energy

Image source: Getty Images

There has been a massive shift in how investors are selecting their portfolio holdings.

Investors today seem less concerned with total return (capital appreciation and dividends). Rather, a holistic investing approach is taking hold. Today, investors are more focused than ever on the environmental, social, and governance impacts of their investments. In effect, fund managers have been forced to include stocks that embrace sustainable investing criteria.

In my opinion, this trend is still in its infancy and is still in its early stages. Thus, investors have an opportunity to ride this train early and pick up these stocks before the market catches on.  In this context, here are three top ESG picks for long-term investors.

Boralex

At a market cap of $4.47 billion, Boralex (TSX:BLX) is among the smaller ESG picks on the TSX. That said, this stock has massive upside potential. Operating in four countries, this company’s core business is dedicated to developing and serving its portfolio of 88 wind farms, 2 thermal stations, 16 hydroelectric power stations, and 10 solar energy stations.

In the last five years, Boralex has rewarded its investors with impressive capital appreciation of 140%. It has also consistently increased its free cash flow, which it invests back into expanding its operations. While its dividend payout of 1.6% is meager, it speaks volumes about its stock price appreciation.

Ballard Power

Since its U.S. listing almost 25 years ago, Ballard Power (TSX:BLDP)(NASDAQ:BLDP) has been a top growth stock in the renewables space. While this stock and sector have primarily remained out of favor, Ballard’s stock price saw a parabolic surge of almost 45% in 2021. In fact, Ballard has tripled since pandemic lows, providing a nice boost for ESG investors.

Ballard’s core business revolves around manufacturing hydrogen-powered fuel cells, most used in the automobiles sector. While hydrogen fuel cells fell out of favor following the EV surge, there is a renewed interest in these products as a renewable option. Combine that with Ballard’s foreign expansion plans (especially China), and investors are enthusiastic about its growth prospects.

Algonquin Power

Over the last 3 years, Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) has consistently made the list of my top picks on the TSX. The primary differentiating factor between Algonquin and other ESG players is that it operates mainly in the utilities sector. That said, the company does hold a strong renewables portfolio, and is a high-dividend yielding stock. Accordingly, investors are taking note.

Moreover, this firm recently underwent a correction, dropping by almost 15% before picking up slowly. Despite weak short-term results, this firm’s long term fundamentals remain stronger now than ever.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends BORALEX INC.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »