Renewable energy stocks seem to have attracted investors’ attention like never before, resulting in their high valuations. While technology-focused companies, such as fuel cells or solar components, continue to make headlines, several not-so-popular renewable energy infrastructure companies and utilities continue to grow at the top and bottom. Here are five such companies that not only offer attractive growth prospects but also appeal to dividends.
Brookfield Renewable Partners
Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) mainly generates power from hydro, wind and solar sources. Nearly two-thirds of the company’s production comes from hydropower. It recently made a big bet on distributed solar power generation by acquiring $ 810 million from Exelon’s solar assets.
The company has done a commendable job of increasing its revenue and funds from operations over the years, both organically and through acquisitions. In the last quarter, the company grew its generation by 10% and the funds from operations by 18%. Brookfield Renewable increased its dividend by 5% in the fourth quarter and expects it to grow by 5% to 9% annually. In addition to attractive growth prospects, the stock is currently offering a dividend yield of 2.7%.
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Atlantica’s sustainable infrastructure
Atlantica’s sustainable infrastructure (NASDAQ: AY) owns and manages primarily renewable energy assets with long-term income contracts. Almost 70% of the company’s cash flow comes from renewable energy generation. It is also involved in gas generation, electrical transmission and desalination of water. Nearly 45% of the company’s assets are in North America, while about 35% are in Europe.
In the first nine months of 2020, the company increased its cash available for distribution (CAFD) by 6.4%. Atlantica Sustainable showed decent growth after divorcing its difficult parent Abengoa at the end of 2015. The company is targeting growth investments of $ 200 million to $ 300 million per year. By 2020, it had invested about $ 322 million in growth projects, or reached agreements to invest. Overall, Atlantica Sustainable Infrastructure’s dividend yield of 3.7% appears to be on a sustainable basis.
Clearway Energy
Control by asset manager Global Infrastructure Partners, Clearway Energy (NYSE: CWEN) owns more than 7,000 MWs of wind, solar and gas generation assets. The company has grown its operating cash at a healthy pace, thanks to growth in investments.
BEP Cash from Operating Data (Quarterly YoY Growth) Data by YCharts
Clearway Energy increased its dividend by 1.8% in the third quarter. In the long run, this is the annual dividend growth from 5% to 8%. The company expects the cash to be available for distribution in 2021 by almost 5%. Clearway Energy has dedicated more than $ 450 million to growth projects by 2020. With a 3.2% dividend yield and a healthy project pipeline, Clearway Energy shares offer attractive growth prospects. with an appeal to dividend income.
NextEra Energy Partners
NextEra Energy Partners (NYSE: NEP), subsidiary of utility NextEra Energy (NYSE: NO), owns and operates wind, solar and natural gas infrastructure assets in the USA. The partnership increased its cash available for distribution by a significant 40% in 2020. This helped him increase his annual distributions by an impressive 15% in 2019. NextEra Energy Partners expects to grow its CAFD by approximately 12% by the end of 2021.
Furthermore, the company expects to grow its distribution by 2024 at an average annual rate of 12% to 15%. NextEra Energy Partners recently acquired a 40% stake in a renewable 1 gigawatt portfolio of NextEra Energy. The partnership is well positioned to grow through future acquisitions of NextEra Energy, which has one of the largest renewable energy portfolios in the US, due to a steady increase in NextEra Energy Partners’ share, it now offers a modest return of approx. 2.8%. With promising growth prospects, however, the stock offers an attractive offer for total returns.
BEP Dividend Yield Data by YCharts
Algonquin Power & Utilities
Algonquin Power & Utilities (NYSE: AQN) operates regulated water, electricity and gas supplies in the US and Canada. In addition, it owns and operates assets for renewable power generation, including wind, solar, hydroelectric and thermal assets. Regulated utilities account for approximately 70% of the company’s revenue, while the remaining 30% are for renewable generation.
Algonquin Power & Utilities boasts a compounded 10-year dividend growth rate of 10 years. What’s more, the company expects to spend $ 9.4 billion on growth projects over the next five years. It would also enable him to grow his payout. With an attractive return of almost 3.5%, it is one of the best stocks for renewable energy to increase your dividend portfolio.