The global economy is taking action to protect the planet by moving toward a net-zero world. Canada is one of the world’s largest oil and natural gas producers but is advancing climate action. The federal government aims for a 40% to 45% reduction in emissions by 2030 and to reach net zero by 2050.
Publicly listed companies in the clean technology or renewable energy space also appear on responsible investors’ radars. Three stocks powering the green economy include Cenovus Energy (TSX: CVE), 5N Plus (TSX: VNP), and Exro Technologies (TSX: EXRO).
Carbon capture and storage
Cenovus Energy has a three-phased plan to invest in and implement emissions-reducing technologies like carbon capture and storage (CCS). The $48.9 billion integrated energy company is also a founding member of Pathways Alliance, composed of oil sands producers.
Management aims to reduce absolute greenhouse gas (GHG) emissions by 35% by year-end 2035. Cenovus is currently operating two carbon capture projects. The Lloydminster Ethanol Plant, a fuel-grade ethanol producer, can capture approximately 80,000 tonnes of CO2e annually on average.
The Pikes Peak South project, a partnership with Svante, tests new carbon capture technology. It can capture nearly 9,000 tonnes of CO2e per year. Cenovus has three other carbon capture technology projects underway. In Q2 2023, net earnings and free funds flow rose 36% and 205% year over year to $866 million and $897 million, respectively.
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Cenovus targets returning 50% of excess free funds flow to shareholders for quarters in which the ending net debt is between $9 billion and $4 billion. At $25.80 per share, the energy stock pays a 2.19% dividend.
Renewable energy equipment
5N Plus is one of the steady performers in the basic materials sector thus far in 2023. At $3.58 per share, the year-to-date gain is 23%. The TMX Group lists the stock in the renewable energy equipment manufacturing and technology sub-sector.
The $316.7 million company uses proprietary and proven technologies to develop and manufacture specialty semiconductors and performance materials. Vital industries like aerospace, health and pharmaceutical, industrial materials, and renewable energy use the products.
5N Plus operates R&D, manufacturing, and commercial centres on three continents (North America, Europe, and Asia). Its wholly owned subsidiary, AZUR SPACE Solar Power, boasts solar cell technology that powers all aspects of the travel, landing, and exploration in space missions.
Low-impact material and products
Exro Technologies develops new generation power control electronics that expand the capabilities of electric motors and batteries. The $323.8 million clean technology company’s two innovative technologies are helping to accelerate the adoption of a circular, electrified economy.
Coil Driver bridges the performance-cost gap in e-mobility, while Cell Driver is for stationary energy storage. Its CEO, Sue Ozdemir, said, “Exro delivers real-world solutions that change how the world consumes energy. Our patented technology will provide commercial and industrial applications with high-quality, safe, and reliable energy while alleviating stress on existing grid infrastructure.”
Exro trades at $1.92 per share, and market analysts forecast a return potential of 62.5% ($3.12) in 12 months.
Breakout soon
The global transition to a zero-emission economy is progressing. With many investors going green, expect stocks of companies that commit to net zero, like Cenovus Energy, to break out soon.
