The renewables sector is one of the best areas you can invest in on the Toronto Stock Exchange to earn higher returns. It is an incredible buying opportunity for long-term investors to invest in this sector. Here are two Canadian renewable energy stocks you can invest in over the long term in November 2024.
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Brookfield Renewable Partners
Brookfield Renewable Partners (TSX:BEP.UN) is a diversified, multi-technology operator and owner of clean energy assets. The company’s portfolio comprises wind, hydroelectric, solar, and storage facilities across America, Europe, and Asia, having invested directly in 21 gigawatts of installed capacity in the region at present.
Brookfield Renewable Partners has two dividend flavours, a limited partnership with a 5.3% yield and a corporate share class with a 4.5% yield. Moreover, it is a leading global producer of renewable energy and has raised its payout by 6% on a compound annual growth rate over the past two decades.
Brookfield has averaged an annual total return of 10.8% over the last decade. Moreover, it is well-equipped with enough power to keep its dividend growing in the future. It forecasts more than a 10% compound annual growth rate in its funds from operations through 2028.
The company has a global footprint and is operational in 20 countries. It is generating a strong risk-adjusted return through a portfolio of clean energy and transition assets diversified both globally and technologically. Brookfield targets a 12% to 15% internal rate of return with 10% growth in funds from operations per unit.
Northland Power
In order to provide electricity through a regulated utility, Northland Power (TSX:NPI) designs, builds, and manages maintainable infrastructure assets using a variety of clean and green technologies, such as solar and offshore and onshore wind. Its prospects for expansion are worldwide, encompassing Asia, Europe, Latin America, and North America.
The stock of Northland Power appears to be doing well based on the most recent earnings releases. The global power producer generated $2.4 billion in sales, a 12.2% increase over the previous year. The company’s operating margin came in at 28.3%, indicating profitability after making significant investments in future expansion.
In addition, its trailing 12 months’ net income was $66.1 million, implying that the company is becoming more profitable, yet it is doing so while expanding its business. It is positive news for the dividend investor because it highlights the possibility of the company’s ability to sustain and, in the future, increase dividend payouts.
Northland Power stock stands out as one of the best Canadian renewable stocks to add to your investment portfolio. While NPI stock’s payout ratio is high at 500%, its cash flow remains strong. Ongoing projects suggest that earnings growth will help maintain its dividend sustainability.
