2 Renewable Energy Stocks to Own Today

Investing in the renewable energy industry offers significant long-term upside for investors, and here are two assets you could consider for this purpose.

| More on:
Solar panels and windmills

Image source: Getty Images

Would you consider your investment portfolio adequately diversified? Owning assets from various segments of the economy could be an ideal approach to building a balanced portfolio. If you are just starting investing, you should know that a balanced portfolio gives you long-term growth opportunities while mitigating capital risk.

Every once in a while, one of the sectors of the economy boasts excellent long-term growth opportunities that you could leverage. The tech sector has been a high-growth sector for the last few years. Investors looking for longer-term growth might want to consider taking a closer look at the renewable energy industry.

Today, I will discuss two renewable energy stocks that you should consider adding to your portfolio if you are looking for long-term growth.

TransAlta Renewables

TransAlta Renewables (TSX:RNW) is a Calgary-based $4.94 billion market capitalization company operating in the renewable energy sector. The company owns and operates a growing portfolio of renewable power-generating facilities diversified across Canada, the U.S., and Australia. The company’s assets boast a combined capacity of 2.8 GW of electricity.

TransAlta’s portfolio includes over 40 facilities that include hydroelectric, wind power, and solar power-generating facilities. Most of these facilities have long-term contracts that bolster the company’s revenue streams. With virtually guaranteed cash flows through its long-term contracts of at least a decade, TransAlta stock could be well positioned to provide you with significant long-term wealth growth.

At writing, TransAlta stock is trading for $18.52 per share, and it boasts a juicy 5.08% dividend yield.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is another Canadian utility company. The $11.87 billion market capitalization company is a regulated utility conglomerate and renewable energy business with assets in North America and the Caribbean. The company has grown rapidly over the last decade through strategic acquisitions and organic growth.

Algonquin Power boasts a portfolio of renewable power-generating facilities that collectively produce around four GW of electricity. It has earmarked several projects that could increase its capacity by 1.6 GW in the next four years. It means that investors can expect its revenues to increase considerably in the coming years.

At writing, Algonquin stock is trading for $17.56 per share, and it boasts a juicy 4.86% dividend yield.

Foolish takeaway

Tackling the climate change crisis is becoming increasingly crucial worldwide, and that presents a growing number of opportunities in the green energy industry. Utility businesses tend to be an excellent long-term investment due to the defensive business model these companies follow and the essential nature of their services.

Utility companies generate stable and recurring income that the businesses can use to comfortably fund growing shareholder dividends, regardless of how the broader economy is performing at any given time. Renewable energy companies are rapidly taking over this space, presenting the prospect of greater long-term profit margins and greater growth.

Investing in TransAlta Renewables stock and Algonquin Power & Utilities stock could be a good way to capitalize on this trend.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Energy Stocks

Canadian small-cap energy companies are performing well.
Energy Stocks

Surge Energy Stock Has Doubled in 2022 and There’s Still Steam Left

Canadian small-cap oil and gas stocks seem unstoppable this year!

Read more »

Oil pumps against sunset
Energy Stocks

Top 3 Energy Stocks for 2022

Energy stocks like Enbridge (TSX:ENB)(NYSE:ENB) should be on the top of your list.

Read more »

oil and natural gas
Energy Stocks

3 Reasons Oil Stocks Are Outperforming Tech This Year

Oil stocks like Baytex should be on your watch list.

Read more »

oil and gas pipeline
Energy Stocks

3 High-Yielding Energy Stocks to Buy Amid Rising Volatility

These three energy stocks can boost your passive income.

Read more »

energy industry
Energy Stocks

3 Cheap Energy Stocks to Buy Right Now to Earn Superior Returns

Given the favourable environment and their cheaper valuations, these three energy stocks can outperform this year.

Read more »

Oil pumps against sunset
Dividend Stocks

1 Energy ETF With an Unbelievable 55% Gain

An energy ETF with proven resiliency continues to outperform and has gained more than 50% thus far in 2022.

Read more »

oil tank at night
Energy Stocks

1 Severely Undervalued TSX Stock in the Red-Hot Energy Patch

Suncor Energy (TSX:SU)(NYSE:SU) stock has been a relative underperformer that could have most room to run as oil stays above…

Read more »

Oil pipes in an oil field
Energy Stocks

Canadian Natural Resources (TSX:CNQ) Stock: A Perfect Pick for Income and Value

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) stock may have doubled up in a year, but shares are still cheap with room to…

Read more »