Long-term growth has long been touted as the strongest way of reaching wealth. It’s also the easiest. You simply purchase companies that you believe will do well long term after researching the stocks and perhaps reinvest in them over the years.
Yet if there’s one sector that’s due for strong long-term growth in the next few decades, it has to be green energy stocks. The energy transition is here, and we are slowly but surely moving away from oil and gas. If you want just as much growth as our forefathers saw with oil, then this is where I’d park cash.
Brookfield Renewable
Brookfield Renewable Partners (TSX:BEP.UN) is likely the best option if you’re seeing long-term wealth, but also diversification. Brookfield stock invests in every type of clean energy from uranium to wind power. This allows investors to get their hands into everything with just one stock!
But among green energy stocks, it’s also been around a long time. Its parent company even started out with green energy back in the late 1800s. So, even though it’s been around for two decades or more, you can look back on even more history to know this is a safe long-term choice.
Finally, Brookfield stock is a great deal right. It trades down 20% in the last year, as of writing. This comes from the effect of interest rates and inflation hurting its bottom line. But once that’s under control, you’ll see it’s one of the green energy stocks that will keep on climbing.
For now, you can bring on Brookfield stock with a dividend yield at 5.15%! It also enjoys a compound annual growth rate (CAGR) of 14.24% in the last two decades alone. And history very well could repeat itself.
Hydro One
Now for a newer stock that is still a green energy stock I would hold long-term: Hydro One (TSX:H) continues to power most of Ontario through hydro electricity. It’s a utility stock that will remain strong no matter what the market is doing, which is what we’ve seen during this downturn.
In fact, shares are up 15% in the last year alone, though they’ve come down slightly since the new year. Even so, this makes it a great time to jump in on the downturn before there is a climb once more. The facts remain the same. Hydro One stock continues to have stable revenue coming in, which will continue as it services the most populated province in the country.
Meanwhile, you can also pick up Hydro One stock with a dividend yield at 3.16% and see that shares have more than doubled at 111% since coming on the market in 2016. As Hydro One stock continue to also beat earnings estimates, it’s certainly one I would consider as a long-term hold.
Bottom line
There are quite a few green energy stocks out there. That’s not going to change in the near future as we make the transition. However, there are few that provide as much solid long-term wealth as these two stocks.
Whether you want to get hyper-local with Hydro One stock or diverse with Brookfield Renewable stock, both are winners. What’s more, you’ll be rewarded with dividends for decades.
