Why Shares of This Renewable Stock Are Powering Higher

This renewable energy stock could be the future of investing, with plenty of cash on hand and a secure future ahead.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 24, 2024 4:00 pm EDT

| More on: ARR

When you see a company’s stock surging over a month, it often indicates something exciting is happening behind the scenes. This momentum can signal that the company is gaining traction in its industry, attracting more attention and investment. For savvy investors, this growth spurt can be a good buy signal, suggesting that the company might be on the verge of a bigger breakout. And there’s one I’d watch right away.

Utility, wind power — Image source: Getty Images

What to watch

Understanding the “why” behind the surge can help you gauge whether the growth is sustainable or just a flash in the pan. Look at factors like revenue growth, market share expansion, and customer feedback. If the underlying fundamentals are strong, you might be on to a winner!

Plus, keep an eye on the valuation. Just because a company is soaring doesn’t mean its stock is a bargain. Consider metrics like the price-to-earnings (P/E) ratio or compare it with industry peers to ensure you’re not getting swept away by hype alone. Furthermore, it’s wise to check out the overall market conditions and sector performance. Remember, even the most promising company can falter in a turbulent market.

A sector on the rise

Renewable energy stocks are on fire lately, and it’s not just because of the latest growth spurt! With increasing awareness about climate change and a collective push towards sustainability, governments and consumers alike are prioritizing renewable energy sources. This means companies involved in solar, wind, and other green technologies are not just seeing a momentary spike but long-term growth.

Moreover, many renewable energy companies are backed by strong governmental support and favourable policies. Incentives and subsidies for green energy projects are on the rise, thus making it easier for these companies to innovate and expand. As more businesses and households shift to renewable energy solutions, the demand for these stocks will likely grow, leading to even more opportunities for investors.

Altius

Altius Renewable Royalties (TSX:ARR) is a perfect example. And it’s not just a fleeting moment of success. The company’s second-quarter financial results show a promising uptick in revenue, hitting $2.4 million in proportionate revenue compared to $1.6 million a year earlier. This growth is primarily driven by its joint venture, Great Bay Renewables. This is making waves with its strategic investments in renewable energy projects.

Notably, Chief Executive Officer (CEO) Frank Getman of Great Bay Renewables highlighted the busy quarter, stating, “The GBR team had a busy quarter with the closing of the Nokomis investment as well as the second interconnection loan agreement signed with Red Stone.” With a portfolio that includes exciting projects like the recently operational 195-megawatt (MW) Angelo Solar project, ARR is clearly gearing up for future cash flow!

Investors are also buzzing about Altius due to its innovative approach to financing renewable energy development. The company has secured multiple investments, such as a $30 million royalty investment with Nokomis Energy. Thus allowing it to gain future royalties from a range of solar projects. With cash reserves of $65.9 million and a commitment to growing its royalty portfolio, Altius is positioned for substantial growth.

As Brian Dalton, CEO of Altius, noted, “GBR continues to innovate and find opportunity in finding solutions to industry challenges while steadily scaling and diversifying its royalty portfolio.” This forward-thinking strategy, combined with the global shift toward sustainable energy, makes Altius Renewable a compelling option, especially for investors looking to capitalize on the booming green market!

Foolish takeaway

Altius is riding the renewable energy wave with impressive financials, including reporting a boost in proportionate revenue to $2.4 million for the second quarter of 2024, with thanks to its joint venture with Great Bay Renewables. Now, with exciting developments, ARR is clearly focused on expanding its footprint in the green energy sector, especially with the successful launch of the 195 MW Angelo Solar project and strategic investments and a $30 million royalty deal with Nokomis Energy. With strong cash reserves of $65.9 million and a commitment to innovation, Altius is positioning itself as a savvy choice for investors, all while contributing to a more sustainable future!