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 stocks — 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. At the end of 2020, 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.
The company posted mixed quarterly results for Q1. While NextEra’s adjusted earnings per share grew 14% year-over-year (YoY), revenues of $3.73 billion fell from the $4.61 billion it reported in the same period last year.
NextEra Energy has also recently unveiled its plans for a $65 million green hydrogen facility plant which it hopes to start by 2023. Management explained that it is taking a “toe in the water” approach but also stated that the firm has developed a pipeline of around 50 potential green hydrogen projects.
The company pays out a dividend of $0.385 annually, yielding 2.1%. On average the company’s dividend growth is 11% 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 21% YoY to $257 million.
This company primarily generates around two-thirds of its energy from hydropower. It also generates wind and solar power, although not nearly as large quantities. 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.
Brookfield expects to grow its dividend by 5%–9% annually, currently, its annual payout is $0.58 and yields around 1.56%.
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 growth of 11.8% YoY to $235.2 million. However, in its South American segment, revenue grew by 7% YoY, whilst Europe, the Middle East, and Africa jumped 18%. With operations thriving in South America, Atlantica has a foothold in an exciting market for energy development over the next decade.
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 4.75% paying out $1.72 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.
Contributing Writer at MyWallSt
Poppy’s favorite stock is Nvidia as she loves innovation and this stock has bags of it. Nvidia invented the GPU in 1999 and even today its immersive graphics give life to the gaming world. Poppy is also inspired by Nvidia’s ability to imagine and create positive change for the world, with its AI technology fuelling new developments in the automotive industry, the medical industry, as well as powering data centers around the world.