3 Canadian Renewable Energy Stocks with Sustainable Dividend Growth

The Canadian renewable energy stocks we’ve uncovered have been stellar performers during the past few years

SmallCapPower | December 7, 2020: Renewable energy’s outlook remains strong on rising consumer demand as well as increasing political pressure to maintain long-term guaranteed contracts with renewable energy producers. And, U.S. President-elect Joe Biden has pledged to create a green U.S. energy grid by 2035 and spend US$2 trillion on renewable energy infrastructure and clean-energy research and development over four years. Today we have identified three Canadian renewable energy stocks with long-term records of positive earnings and cash flow that should lead to continued dividend growth.

*Returns are based on closing stock prices as of December 4, 2020

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Algonquin Power & Utilities Corp. (TSX:AQN) – $20.51

Algonquin Power owns a portfolio of long-term contracted wind, solar and hydroelectric generating facilities, representing over 2 GW of installed capacity and more than 1.4 GW of incremental renewable energy capacity under construction. Through its business groups, the Company provides rate-regulated natural gas, water, and electricity generation, transmission, and distribution utility services to over 805,000 customers.  It also owns regulated water and energy utilities in the United States through Liberty Power and Liberty Utilities. Liberty Power owns a direct or indirect equity interest in more than 35 clean energy facilities. Algonquin Power has approximately US$11 billion of total assets. During Q3 2020, the Company reported a 27% increase in its Adjusted Net Earnings to US$88.1 million. AQN has a current dividend yield of 4%.

  • Average Annual Return Over the Past Five Years: 33%

Brookfield Renewable Partners L.P. (TSX:BEP.UN) – $75.49

Brookfield Renewable Partners has a portfolio that consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia, and totals more than 19,000 megawatts of installed capacity as well as an 18,000 megawatt development pipeline. Hydroelectric power comprises approximately 64% of the Company’s portfolio. Brookfield Renewable’s investment objective is to deliver long-term annualized total returns of 12% to 15%, including annual distribution increases of 5% to 9% from organic cash flow growth and project development. Brookfield Renewable units are expected to split 3-for-2 on December 11, 2020. BEP.UN has a current dividend yield of 3%.

  • Average Annual Return Over the Past Five Years: 58%

Innergex Renewable Energy Inc. (TSX:INE) – $25.73

Innergex Renewable Energy conducts operations in Canada, the United States, France, and   Chile and manages a large portfolio of high-quality assets currently consisting of interests in 68 operating facilities with an aggregate net installed capacity of 2,588 MW (gross 3,488 MW), including 37 hydroelectric facilities, 26 wind farms and five solar farms. Innergex also holds interests in seven projects under development, two of which are under construction, with a net installed capacity of 296 MW (gross 378 MW), and prospective projects at different stages of development with an aggregate gross capacity totaling 7,115 MW. During Q3 2020, the Company announced that its revenue rose 14% year over year to $213.7 million while its Adjusted EBITDA increased 6% to $151.4 million. INE stock is currently yielding 2.8%.

  • Average Annual Return Over the Past Five Years: 43%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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