Renewables are the future powerhouse of our planet, with the green energy market heating up, we have 3 great investments that also pay out a dividend!
Renewable energy is the future and missing the boat on any investment in this growing market would be a mistake. Whilst companies that focus on fuel cells, solar power components, and electric vehicles are very popular, this popularity is driving their valuations sky-high. However, renewable energy infrastructure companies have not yet generated as much hype and thus could present a great opportunity for a savvy investor.
Here we have three growing companies with plenty of potential and the added benefit of being dividend stock — what’s not to love?
1. NextEra Energy
NextEra Energy (NYSE: NEE) is a clean energy company headquartered in Florida. It operates through two main segments, Florida Power & Light (FPL) and NextEra Energy Resources (NEER). In 2020, NextEra Energy was ranked on Fortune’s 2020 list of “World’s Most Admired Companies”.
But NextEra is starting to expand out of standard energy production and is looking to include mobility into its business. In December, the company got its foot in the door of the vehicle conversion market through its acquisition of eIQ Mobility, a software company that provides mobility planning solutions.
As for its financials, NextEra’s 2020 annual earnings per share saw a 10.5 % growth YoY. For the full year 2020, FPL reported net income on a GAAP basis of $2.65 billion, up 13% YoY, whilst NEER saw a 70% slump YoY due to pandemic-related restrictions, this segment is expected to grow again once we return to post-pandemic normality.
The company pays out a dividend of $1.54 annually, yielding 2.04%. On average the company’s dividend growth is 11.5% each year. NextEra Energy is a perfect company for an investor looking for an admired company in the renewable sector but also looking to earn money from their investment at the same time.
2. Brookfield Renewable Partners
Brookfield (NYSE: BEP) has been going strong for the past few years, with noticeable growth in revenue, funds from operations (FFO), and of course its dividend. In its most recent quarter, Brookfield’s FFO grew 18% YoY, whilst it raised its Dividend by 5% for the fourth quarter. Brookfield expects to grow the dividend by 5 – 9% annually, currently, it yields around 2.7%.
This company primarily generates around two-thirds of its energy from hydropower. It also generates wind and solar power, although not nearly in as large quantities. Recently, however, it made a large bet on distributed solar generation through its acquisition of $810 million of Exelon’s solar assets. This will help further increase the amount of solar power it can distribute to customers in the future.
Brookfield is currently pushing forward with its agenda of helping to decarbonize the world. That vision starts at home as the company continues to operate as the largest distributed generation business in the country, with over 2,000 megawatts of solar power for operation and distribution. Thus, Brookfield is a great option for investors looking to invest in a growing energy infrastructure company that offers a dividend.
3. Atlantica Sustainable Infrastructure
Atlantica Sustainable Infrastructure (NASDAQ: AY) is a company that owns and manages renewable energy assets with long-term revenue contracts. It is also a company that whilst predominantly working in the U.S, roughly 35% of its assets are in Europe with 45% in North America. The company also works in multiple areas including electric transmission and water desalination.
Atlantica’s revenue mainly comes from renewable energy generation, totaling around 70% of the company’s cash flow. For the fiscal year, it saw overall revenue hold steady with only a 0.2% growth YoY. However, in its South American segment, revenue grew by 7% YoY, whilst Europe and North America each only grew by 1%. With operations thriving in South America, Atlantica has a foothold in an exciting market for energy development over the next decade.
2020 also saw Atlantica grow its cash available for distribution by 5.5% YoY. By the end of the year, it had invested or agreed to invest around $322 million in growth projects. Furthermore, whilst it continues to promote the switching of energy generation to sustainable resources, it also pays out a nice dividend to its investors. Its current yield sits at 4.48% paying out $1.68 per share.
Overall, this is an understated company with plenty of potential, as well as a healthy dividend payout for any income-seeking investor.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.