Renewable energy stocks seem to have attracted investors’ attention like never before, resulting in their extremely high ratings. While technology-focused companies, such as fuel cells or solar energy components, continue to make headlines, several less-popular utilities and renewable energy infrastructure companies continue to increase their profits and results. Here are five of those companies that not only provide attractive growth prospects, but also attractive dividends.
Brookfield Renewable Partners
Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) generates energy mainly from water, wind and solar sources. Almost two-thirds of the company’s generation is hydroelectric. It recently made a big bet on distributed solar generation by acquiring $ 810 million in solar assets from Exelon.
The company has done a commendable job of increasing its operating funds and revenues over the years, both organically and through acquisitions. In the last quarter, the company grew its generation by 10% and operating resources by 18%. Brookfield Renewable increased its dividends by 5% in the fourth quarter and expects to increase them by 5% to 9% per year. In addition to attractive growth prospects, the stock currently offers a dividend yield of 2.7%.
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Atlantic Sustainable Infrastructure
Atlantic Sustainable Infrastructure (NASDAQ: AY) mainly owns and manages renewable energy assets with long-term revenue contracts. Almost 70% of the company’s cash flow comes from renewable energy generation. It is also involved in gas generation, electrical transmission and water desalination. Almost 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% year on year. Atlantica Sustainable showed decent growth after separating from its troubled parent company Abengoa in late 2015. The company targets growth investments of $ 200 million to $ 300 million per year. In 2020, it invested, or closed deals to invest, about $ 322 million in growth projects. Altogether, Atlantica Sustainable Infrastructure’s 3.7% dividend yield appears to be on a sustainable basis.
Clearway Energy
Controlled by the asset manager Global Infrastructure Partners, Clearway Energy (NYSE: CWEN) it has more than 7,000 MWs of wind, solar and gas generation assets. The company has been growing its operating cash at a healthy pace, thanks to its investments in growth.
Cash data from BEP operations (quarterly growth YoY) by YCharts
Clearway Energy increased its third quarter dividend by 1.8%. In the long run, it aims at an annual dividend growth of 5% to 8%. The company expects growth of almost 5% in its cash available for distribution in 2021. Clearway Energy committed more than $ 450 million in growth projects in 2020. With a dividend yield of 3.2% and a healthy project portfolio , Clearway Energy’s shares offer attractive growth prospects over attractive dividend revenue.
NextEra Energy Partners
NextEra Energy Partners (NYSE: NEP), subsidiary of the utility NextEra Energy (NYSE: SEN), owns and operates wind, solar and natural gas infrastructure assets in the United States. The partnership increased its cash available for distribution by a notable 40% in 2020. This helped to increase its annual distributions by an impressive 15% in 2019. NextEra Energy Partners expects to increase its CAFD by about 12% by the end of 2021.
In addition, the company expects to increase its distribution at an average annual rate of 12% to 15% by 2024. NextEra Energy Partners recently acquired a 40% stake in NextEra Energy’s 1 gigawatt renewable energy portfolio. The partnership is well positioned to grow through future suspended acquisitions of the NextEra Energy matrix, which has one of the largest renewable energy portfolios in the USA. Due to a steady increase in NextEra Energy Partners’ shares, it now offers a modest return of around 2.8%. However, with promising growth prospects, the stock offers an attractive proposal for total return.
BEP Dividend Yield data by YCharts
Algonquin Power & Utilities
Algonquin Power & Utilities (NYSE: AQN) operates regulated water, electricity and gas utilities in the US and Canada. In addition, it owns and operates renewable energy generation assets, including wind, solar, hydroelectric and thermal assets. Regulated concessionaires account for about 70% of the company’s revenue, with the generation of renewables accounting for the remaining 30%.
Algonquin Power & Utilities boasts an annual compound dividend growth rate of 10% over 10 years. In addition, in the next five years, the company expects to spend $ 9.4 billion on growth projects. This should allow him to continue to increase his pay as well. With an attractive yield of almost 3.5%, this is one of the best renewable energy stocks to add to your dividend portfolio.