Canadian investors should not take their eyes off the green revolution as public and private entities continue to push forward to meet lofty carbon emission goals. Grand View Research recently valued the global renewable energy market at US$1.1 trillion in 2022. The same report projected that this market could deliver a compound annual growth rate (CAGR) of 16% from 2022 through to 2030.
In this piece, I want to look at three Canadian renewable energy stocks that are worth snatching up in the final days of June 2023.
Here’s an undervalued renewable energy stock I’d snatch up today
Northland Power (TSX: NPI) is a Toronto-based independent power producer that develops, builds, owns, and operates clean and green power projects in North America, Europe, Latin America, and Asia. Shares of this renewable energy stock have dropped 9.2% month over month as of early afternoon trading on June 29. The stock has now plunged 27% so far in 2023. Investors can see more of its recent performance with the interactive price chart below.
This company released its first-quarter (Q1) fiscal 2023 earnings on May 9. It reported total sales of $622 million — down from $695 million in the first quarter of 2022. Meanwhile, gross profit fell to $569 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Northland Power posted adjusted EBITDA of $352 million, which was also down from $420 million in the previous year.
Shares of this renewable energy stock possess a favourable price-to-earnings (P/E) ratio of 9.9. The stock offers a quarterly dividend of $0.10 per share. That represents a solid 4.4% yield.
This renewable energy stock offers a strong yield
Algonquin Power & Utilities (TSX: AQN) is an Oakville-based renewable energy and utility company that provides energy and water solutions and services in North America and around the world. Its shares have dropped 2.3% over the past month. The stock is still up 19% in the year-to-date period.
In Q1 2023, revenue increased 6% to $778 million. Moreover, Algonquin achieved adjusted EBITDA growth of 3% to $341 million. However, adjusted net earnings were reported at $119 million, or $0.17 per share — down 15% and 19%, respectively, compared to the prior year.
This renewable energy stock is still trading in more attractive value territory compared to its industry peers. It offers a quarterly dividend of $0.108 per share, which represents a strong 5.3% yield.
One more stock in the green energy space I’d buy right now
TransAlta Renewables (TSX: RNW) is the third renewable energy stock I’d look to snatch up in late June. This Calgary-based company owns, develops, and operates renewable and natural gas power-generation facilities and other infrastructure assets in Canada, the United States, and Australia. Shares of TransAlta Renewables have dropped 15% over the past month, driving the stock into negative territory for 2023.
In Q1 fiscal 2023, the company saw revenues dip to $119 million compared to $143 million in Q1 2022. Adjusted EBITDA also fell to $128 million compared to $139 million in the previous year. Regardless, this stock is trading in favourable value territory compared to its industry peers. TransAlta is also on track to deliver strong earnings going forward. It offers a monthly dividend of $0.078 per share, representing a monster 8.4% yield.
