The motivation to invest in the renewable energy space is the torrid pace of growth and long-term earnings potential. Canadian investors should pay particular attention to three companies operating renewable power-generating facilities in different jurisdictions, regions or continents.
Brookfield Renewable Partners (TSX: BEP.UN), Boralex (TSX: BLX), and Polaris Renewable Energy (TSX: PIF) could outperform the broad market, protect your capital from volatility, and deliver outsized gains plus rock-steady dividends.
Global
Brookfield Renewable is the pre-eminent choice because of its global reach. The $17.66 billion company owns an extensive, diversified portfolio and operates in North & South America, Europe, Australia, and Asia. At $38.81 per share, the renewable energy stock is up 15.92% year to date and pays an attractive 4.67% dividend.
According to management, the balance sheet is in excellent shape, and the available liquidity of nearly $4 billion provides flexibility to fund growth. Also, Brookfield’s increasing diversification is starting to bear fruits. In the first quarter (Q1) of 2023, net income ballooned 436% year over year to $177 million.
This year alone, Brookfield will invest around $8 billion across multiple transactions in regions, where it has development expertise. A portion of the capital investment will go to power technologies.
Latin America
Polaris acquires and develops, renewable energy projects in Latin America. The assets of this $297.5 million company are in Ecuador, Nicaragua, Panama, Peru, and the Dominican Republic. It operates a geothermal plant, four run-of-the-river hydroelectric plants, and three photovoltaic solar projects.
In Q1 2023, total revenue climbed 25% to US$20.1 million versus Q1 2022. The net earnings nearly doubled (+86%) year over year to US$4.7 million.
Polaris’s chief executive officer (CEO) Marc Murnaghan credits the successful completion of projects and integration of acquired projects for the stellar business performance during the quarter. He added the latest acquisitions in new geographies should provide further growth opportunities.
Polaris aspires to be a high-performing renewable energy company and be the renewable energy champion in the Americas. If you invest today, the share price is $14.15 (+7.32% year to date), while the dividend yield is a lucrative 5.74% dividend.
France and Canada
Boralex’s energy sources (wind, solar, and hydroelectric) produce zero waste and have no polluting emissions. The $3.77 billion company from Kingsley Falls firm is a market leader in the home country and France’s largest independent onshore wind producer. It also has facilities in the U.S. and development projects in the U.K.
Besides its active participation in the fight against global warming, Boralex expects to achieve profitable and sustainable long-term growth. The current installed capacity is a little above three gigawatts (GW), although it should have an additional six GW when the development projects in the pipeline are complete.
Management is preparing to make the U.S. Boralex’s primary market for development and diversify its geographic presence in Europe. By 2030, the U.S. market will comprise 45% of the total installed capacity (10 to 12 GW). At $36.66 per share (-7.56% year to date), the dividend yield is a modest 1.8%.
Wise decision
Some market analysts say investing in renewable energy stocks is wise, because renewable energy sources are less affected by or less reliant on economic downturns.
