Renewable plays are red hot these days. Indeed, the ESG revolution is only just beginning. And investors are looking for ways to get in on the action.
Accordingly, I think these top two renewables plays are among the best to consider right now. Let’s dive into why.
Northland Power (TSX:NPI) is an exceptional investment pick for the long term. The company’s prospects of expanding global offshore renewable power generation in combination with a brilliantly diverse portfolio gives this stock significant momentum in the market.
Recently, the company managed to acquire $1.6 billion of renewable projects in Spain and raised equity worth nearly $990 million. Indeed, many investors expect this deal will serve as the perfect launchpad for Northland in the European market. In fact, I think the acquisition is likely to prove fruitful for Northland in more than one way. In particular, the long-term revenue and cash flow growth from this project should be especially enticing.
Northland is one of the earlier players in renewable energy. Thus, this company’s stock chart has shown the sentiment shifts over time among long-term investors in this space. Today, the momentum is red hot. I don’t see that changing.
For those who think like I do, Northland Power remains a top pick right now.
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Brookfield Renewable Partners
Another large renewables player on the TSX is Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP). This company has shown up on retail investors’ radar of late as a top way to play this space.
Like Northland, Brookfield has been a net buyer of renewable assets over the years. However, the company did recently sell $1.4 billion worth of wind power assets to Orsted and NextEra Energy Partners LP. Brookfield is all set to receive $677 million and $733 million from the companies, respectively.
The company hopes to use the proceeds from these deals to pursue larger projects on the horizon. Thus, these divestitures are part of a larger strategic vision I like. For long-term investors looking for size and scale, Brookfield appears to be winding up to make a big splash in the market. That’s a good thing for investors right now.
Indeed, Brookfield’s M&A team is one of the best in the business. The company’s shown it can execute large deals at the right price. This is an acquirer I’ll be keeping my eye on right now in this environment.
Selling off high-priced assets to pursue assets trading at a discount is what every company should be doing. Until buying low, selling high isn’t a thing anymore, Brookfield will be a great pick.
Both renewable plays have a strong core businesses and smart management team backing them. No doubt, both Northland and Brookfield provide investors with the high-quality exposure to renewables they seek today.
Like these top renewables picks? Here are some other high-growth picks to consider right now:
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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.