Soon President elect Biden will be the new President and one of the 4 items on his agenda is the Green New Deal. The Green New Deal is about emitting less carbon and for many organizations it is about reducing energy costs – the alternatives are less expensive. Even though President Trump did not encourage solar and wind energy, they have developed as costs in the manufacturing decreased which means many utilities will benefit from the Green New Deal. In the era of President Trump, the President may have loved coal, but many utilities have changed to natural gas to save costs. Most utilities have a divisions which does solar and wind energy, but there are some purer plays.
In an recent article Scott Clayton of TSI Network examined the field to find strong dividends from renewable energy stocks poised to move higher. His criteria was:
US power generators and Canadian provers with significant US operations
TSI uses a point system to help eliminate companies there system is:
1 point for 5 years of continuous dividend payments – 2 points for more than 5 years
2 points if the company has raised the payment in the last 5 years
1 point for management’s commitment to dividends (President’s letter is often the source)
1 point for operating in non-cyclical industries
1 point for limited exposure to foreign currency rates and freedom from political interference
2 points for a long term record of positive earnings and cash flow sufficient to cover dividend payments
1 point for being an industry leader
Company Div Sustainability Points Div Mkt Cap 1 Yr Ttl Recent
Rating Yld % ($ bil) Rtn % Price $
Algonquin Power Above Average 9 3.9 12.6 19.1 21.39
NextEra Energy Above Average 9 1.8 148.9 39.3 77.54
Brookfield Renewable Partn Above Average 8 3.1 23.4 34.5 77.36
Xcel Energy Above Average 8 2.3 38.7 24.3 74.69
Clearway Energy Above Average 7 4.3 6.1 55.9 30.64
Innergex Renewable Energy Above Average 7 3.0 4.2 45.9 24.18
Linking to dividend paying stocks, sometimes if you your investments and government policy should dovetail into each other perfectly. If you own the above types of stocks and the Biden Green Deal is announced, then the emphasis for more to be done and easier permits should be the result. As long as manufacturing costs continue to fall, these types of stocks can be held on for years.
There are more questions than answers, till the next time – to raising questions.