3 Top Renewables Picks to Buy Right Now

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

| More on:
Clean energy

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

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

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Buy for Monthly Dividends

Companies such as Pembina Pipeline and Killam Apartment REIT pay investors monthly dividends, making them top bets for income-seeking investors.

Read more »

Dots over the earth connecting the world
Dividend Stocks

3 of the Top-Growing Stocks on Earth

Market volatility remains high in Q3 2022, but it’s easy to identify the top-growing stocks on Earth.

Read more »

Profit dial turned up to maximum
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy for TFSA Passive Income and Total Returns

This cheap Canadian energy stock provides an attractive dividend yield for TFSA passive income and a shot at some big…

Read more »

money cash dividends
Dividend Stocks

Want Passive Income? 1 TSX Stock for $8/Day in Dividends

If you need cash right away, then this TSX stock can make you passive income from a stable dividend that…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

Canadian dividend stocks make for great long-term buy-and-hold investments.

Read more »

value for money
Dividend Stocks

3 Incredibly Cheap Dividend Stocks to Buy for Dependable Passive Income

Now is an excellent time to load up on Canadian dividend stocks. Here are top picks that are all trading…

Read more »

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

3 Simple TSX Stocks to Buy With $25 Right Now

Canadians with capital of as low as $25 can purchase three simple stocks right now and earn recurring passive income…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 No-Brainer U.S. Stocks for Investors in August

Here are two undervalued U.S. stocks to diversify your investment portfolio. They both pay safe and growing dividends!

Read more »