Canadian Solar

With technological advances made over the last decade, the cost of generating electricity using solar power is now around half the cost of using fossil fuels. Canadian Solar (NASDAQ:CSIQ) is on the move with acquisitions and new projects in Asia and South America. With projects currently underway to increase Canadian Solar’s generating capacity by almost 10%, the company is a world leader in solar power generation. Its increased business dealing in South-East Asia has it well positioned to expand into China, the world’s largest economy, as that country continues to move to green energy sources.

Net income for 2018 was up 130% when compared to 2017, and reports from 2019 indicate continued growth in sales. Shares are currently priced at US$21.80, and 12-month forecasts predict a price range of US$20-$32. This could potentially provide a 49% increase over today’s closing price. With a P/E ratio of just over six this is a company well worth investigating.

Transalta Renewables

Not to be outdone by anyone, Calgary-based Transalta Renewables (TSX:RNW) brings over 100 years of experience to the renewable energy market. As a division of Transalta, it is still able to call on the resources of the parent company while devoting attention to its own projects. Reasonably priced at close to $18 per share, this price represents a 50% increase from 12 months ago. The P/E ratio is high at roughly 21; however, the dividend yield this year was just over 5%, which provides a good return on investment. As energy demands continue to increase, Transalta Renewables is investing in new wind power-generating projects including the Big Level project in Pennsylvania, which started commercial generation on Christmas Eve 2019.

With the government of Canada imposing carbon pricing in 2019, Transalta Renewables can expect consumers to push for more renewable energy production. This increase in demand can only mean good things for the company’s bottom line.

Xebec Adsorption

Xebec Adsorption (TSXV:XBC) designs, purifies, and transforms gases into clean sources of energy. It works not only with clean-burning natural gas but also with the purification of biogas. Biogas is primarily composed of methane obtained by allowing bacteria to digest food and animal waste, garbage, and sewage. As this technology becomes easier to install and operate, the relatively untapped market potential is enormous. Biogas production helps eliminate waste and reduces the quantity of climate-changing greenhouse gases by burning them and producing clean energy.

Value-priced shares of Xebec Adsorption are expected to rise to between $4.50 and $7 over the next year, which represents an increase of between 20% and 100% over today’s price. With operations primarily in Canada, the United States, and China, this is a company poised to take advantage of expanding energy markets.

Going green

With more individuals, companies, and even countries looking for alternative sources of energy, there can be no doubt that the future is in green energy. Taking advantage of the still relatively new green economy in its early stages could provide you with huge growth in the near future. An investor looking for the potential of big returns on their equity investments should definitely take a closer look at these three companies.

The post Go Green With Your Investments: How These Top Green Companies Can Improve Your Bottom Line and Your Conscience appeared first on The Motley Fool Canada.

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When combined with a 6% increase in share value over the past 12 months, RBC also makes a good equity investment for the investor who seeks stability with some growth in their portfolio. The combined return of equity and dividends is expected to provide a return on investment of between 6% and 10%. Over the past three- and five-year periods, RBC’s rate of growth has averaged 8% and 12%, respectively, beating their peer group performance by 2% for both time periods.

Steady growth

Earnings per share of $2.44 for the quarter ending January 31 means RBC also beat analyst predictions by 6%. Better-than-expected earnings were helped by a healthy Canadian housing market where bank revenues were up 7% over the same quarter last year, and there were increases in Canadian deposits of 9%. Over the last five years, RBC has averaged a profit margin of 28.33%. Revenue from Investor and Treasury Services decreased 11% from a year ago, bringing down overall performance; however, this represented an increase of $98 million to $143 million over the previous quarter.

Not one to rest on past performance, RBC recently announced its intention to start a direct-to-consumer bank in the United States. Its goal is to increase deposits from wealthy consumers, expanding from its current ultra-wealthy clientele. Already the 10th-largest investment bank in the U.S. with a strong presence in commercial lending, RBC hopes the new digital bank will increase its client base.

Future potential

With operations in 36 countries, RBC currently has over 17 million customers. Almost two-thirds of RBC’s revenue comes from within Canada. RBC is not only the leader in the retail banking market; it’s also the largest retail fund company in Canada. With this in mind, RBC has plenty of room to expand in international markets that currently only provide 15% of its revenue.

Consumers are continuing to adopt RBC’s digital banking platforms with 90-day active mobile users increasing 15% from the same time last year. RBC also announced that over 52% of customers are accessing digital banking. This bodes well for RBC’s digital expansion into the U.S. market by indicating users find their banking platform convenient and easy to use.

RBC continues to expand into green and environmentally friendly markets. This past year, the bank pledged $100 billion to finance companies and projects with environmental and social benefits. RBC also announced its inaugural €500 million green bond this past year. The proceeds from the five-year bond are intended to fund the creation of renewable power and green buildings.

With strong dividends and steady growth, RBC makes an attractive acquisition for any investor. While other, smaller firms may provide the potential for a faster increase in investor equity, few other companies have the long-term stability of RBC. The stock price remains somewhat high, but the combination of dividends and equity growth can provide stability in a portfolio designed for growth. Investments in RBC will also provide steady income for the more mature investor. This is especially true, as dividends are taxed at a lower rate than interest on investments outside of registered holdings.

Whether you hold RBC in a registered portfolio or not, the tax advantages afforded by dividend income and increases in equity are difficult to ignore. Because of favourable tax laws, the predicted 6-10% return will provide you with a greater after-tax benefit than an interest-based investment.

The post Is RBC (TSX:RY) the Best Blue-Chip Stock for Your Investing Portfolio? appeared first on The Motley Fool Canada.

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Moving to diversify

Shares in Shopify have risen over the last 12 months due in part to its expansion outside the traditional retail market. With the launch of Shopify Studios last year, Shopify made the move to start producing its own multimedia content, which includes original short- to mid-form content and weekly video series.

With sales this past year exceeding $1 billion, based in part on Shopify’s partnership with Snap’s Snapchat app, which allows merchants to buy and deliver Snapchat story ads directly on the Snapchat platform. When you combine this with the Government of Ontario’s decision to have Shopify handle both online and in-person cannabis sales, Shopify is showing itself to be a major player in the e-commerce industry.

With the acquisition in May 2019 of Handshake, a business-to-business Shopify has made the move to expand its dealings outside the retail market and into the wholesale commerce market between businesses.

The Shopify Exchange Marketplace is another way in which Shopify is differentiating itself from its competitors. Through the Exchange Marketplace, potential business owners are able to purchase an already existing store after agreeing with the seller on a price. The money is placed in escrow using a secure third party until both parties are satisfied with the terms of the sale. Shopify has partnered with Escrow.com to ensure that both the buyer and seller are protected during the transaction.

Purchasing an existing online store can save a buyer the hassle of doing the legwork of getting their retail site up and running, and while there is a price attached to the acquisition, this could end up saving a savvy entrepreneur all the time they could be devoting to other aspects of their business.

Increasing market

Shopify’s Q4 earnings report on February 12 revealed Q4 earning of $505.2 million, an increase of 47% over the same quarter from a year ago and well ahead of the expected 40% increase that had been predicted. This is due largely to the ease of merchants to adopt Shopify Payments, Shopify Capital, and Shopify Shipping.

This ease led to Shopify merchants achieving $2.9 billion in sales over the Thanksgiving long weekend, up 61% over the previous year.

It should be clear that Shopify’s expansion into new markets, and the continuing trend of merchants to adopt new technologies such as Shopify Payments, a platform that allows you to manage your online payment gateways, will allow the company to continue its growth well into 2020 and beyond.

As younger consumers continue to move their spending to online platforms, Shopify seems poised to not only offer extensive opportunities for purchasers but also the retailers who want to take advantage of e-commerce opportunities. Younger consumers have come to expect the same immediacy offered by store-based retail in their online experiences, and Shopify is a tool that allows retailers to capitalize on this.

Opportunity

With the rapid increase in share price over the last year, Shopify’s shares (trading at $654.53 as of Monday) are currently very highly valued, especially considering a negative net earnings report from 2018. Undoubtedly, we can expect big things from this company in the future, but the present market valuation of $73.8 billion on expected earnings of $1.5 billion makes this stock a buy only for the aggressive investor.

The post Is Shopify (TSX:SHOP) Stock the Right Investment for You? appeared first on The Motley Fool Canada.

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