Energy security has become the buzzword in countries’ policy around the world.
The phrase has two connotations: Enough energy to meet growing needs and renewable energy that avoids the use of fossil fuels and reduces greenhouse gas emissions.
The stock market has plenty of renewable energy corporations. Today the Bizworld column briefly examines two of Canada’s top operators — Northland Power and Innergex Renewables.
The 34-year-old Northland is the largest with a market value of $6.78 billion and owning 2.6 gigawatts of energy producing capacity and recently energy storage.
Northland has offshore wind, onshore wind, solar and energy storage. Operations are 30 per cent in North America, 40 per cent in Europe, 25 per cent in southern Asia and five per cent in South America.
The company has grown revenues at an average 13 per cent a year with plans to double capacity to 6 gigawatts by the end of 2027.
Debt amounts to 67 per cent of total assets. The dividend yields a nice 4.5 per cent. The stock at $26.83 is just above the year low and down from the $47.23 high.
Innergex has a market value of $2.67 billion with dividends yielding 5.45 per cent on the current price of $12.94.
On Yahoo Finance, 12 analysts have an average target of $40.10, with variation from $36 to $45.
The price is near the low and below the $20.65 high of the year.
The company produces hydro electricity, wind and solar energy and has energy storage. Operations are in Canada, United States, France and Chile.
Generating capacity is 4.24 gigawatts with 1GW in development and another 3.3 gigawatts in mid stages of development.
Debt is 65 per cent of assets. Yahoo Finance has 11 analysts averaging $17.81 target for the stock with a variation from $14 to $22.
Both stocks are benefiting from the transition to renewable energy production and tax credit programs offered by many countries for this energy.
Not everything goes smoothly with renewable energy.
Supply chain shortages, labour shortages and high interest rates are headwinds to watch for.
Wind power projects can develop issues from major storms. A competitor Transalta Renewables had a wind turbine project severely damaged by a hurricane in the Atlantic provinces two years ago and has never fully recovered
Geographically, Innergex locations are in more politically stable countries like Canada, U.S. and France.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
