LEV:CC - 3 Revolutionary Canadian Clean Energy Stocks to Power Your Portfolio
2023-07-17 12:00:00 ET
Are fossil fuels nearing extinction as the world transitions to cleaner energy sources? As deaths from fossil fuel pollution rise to staggering numbers, it is becoming imperative for governments to act swiftly in ending reliance on coal, gas, and oil.
Inexhaustible energy sources from nature
Natural energy sources like solar, wind, and hydro are inexhaustible and create lower emissions than fossil fuels. In Canada, the climate plan targets zero emissions by 2050. The federal government has a $20-billion budget over five years, mostly incentives encouraging the construction of alternative energy projects.
Investors can fight against climate change, too, by going green. You can invest in revolutionary Canadian clean energy stocks to power your portfolio.
Large-cap clean energy stock
Brookfield Renewable Partners ( TSX:BEP.UN ) is a top-tier renewable energy vehicle for its diversified portfolio (hydroelectric, wind, and solar), distributed energy, and sustainable solutions. The $26.2-billion company is present in 30 power markets across 20 countries.
Management is confident about delivering 12% to 15% total returns and a 5% to 9% annual distribution through a proven and repeatable growth strategy. Thus far, the distribution from 2000 to 2022 has grown by a compound annual growth rate (CAGR) of 6%.
Brookfield expects to generate consistent and rising cash flows because of stable and growing demand for low-cost energy and decarbonization. Besides the low-cost infrastructure, renewable assets are hardly affected by economic conditions. More importantly, the business performs well in an inflationary environment.
Around 90% of Brookfield’s revenues are highly contracted and covered by long-term power purchase agreements (PPAs). Also, 70% of revenues are inflation-linked. The total operating and development capacity as of year-end 2022 is over 120,000 MW. If you invest today, the share price is $39.50 (+17.99 year to date) and pays a 4.52% dividend.
100% renewable energy
Innergex Renewable Energy ( TSX:INE ) trades at a discount (-16.67% year to date), but the share price ($13.14) is a good entry point given the company’s growth potential and prosperous future. The $2.7-billion, 100% renewable energy firm has 87 operating facilities (hydroelectric, wind and solar farms), 13 development projects, and is pursuing prospective projects.
The business model is sustainable due to the long-lasting assets or installations that will drive growth. Apart from Canada, Innergex operates in Chile, France, and the United States. Expect profits to rise in the coming years as the installed capacity doubles. Meanwhile, the 5.48% dividend yield should compensate for the stock’s temporary weakness.
EV boom is coming
The Lion Electric Company ( TSX:LEV ) should benefit immensely from the electric vehicle (EV) boom as the Canadian government accelerates the transition to EVs. The proposed regulation mandates that at least 60% of new vehicle sales are zero-emission vehicles (ZEVs) by 2030.
The $621.9 million company manufactures ZEVs, including school buses, mid or mini buses, and urban trucks. While Lion Electric is still wanting in profits, the net income of US$17.8 million in 2022 indicates a trend towards profitability. At $2.78 per share (-8.55% year to date), you’re buying before the big bounce.
Avert a climate crisis
Fossil fuels generate enormous amounts of electricity and are widely used in industries. However, continuous burning increases the greenhouse effect and global warming. Replacing them with renewable energies is the solution to avert a climate crisis. Brookfield Renewable, in particular, is a no-brainer buy.
The post 3 Revolutionary Canadian Clean Energy Stocks to Power Your Portfolio appeared first on The Motley Fool Canada .
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy .
2023