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What are we looking for?

Strong dividends from renewable energy stocks poised to move higher.

The screen

The outlook for renewable energy companies remains strong on rising consumer demand. As well, voter pressure should encourage governments to maintain long-term guaranteed contracts with renewable energy producers. That supports favourable rates for end users.

U.S. president-elect Joe Biden’s support for solar, wind, biomass or hydroelectric power is another plus for the industry.

Our search for sustainable dividends zeroed in on U.S. power generators, along with Canadian producers with significant U.S. operations. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:

  • One point for five years of continuous dividend payments – two points for more than five;
  • Two points if it has raised the payment in the past five years;
  • One point for management’s commitment to dividends;
  • One point for operating in non-cyclical industries;
  • One point for limited exposure to foreign currency rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments;
  • One point for an industry leader.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Our TSI Dividend Sustainability Rating System generated six stocks. Canada’s Algonquin Power & Utilities Corp., Innergex Renewable Energy Inc. and Brookfield Renewable Partners LP all generate substantial amounts of renewable power in the United States. NextEra Energy Inc. is a major supplier of wind and solar power in Florida. Minnesota-based Xcel Energy Inc. – now at 30 per cent renewable energy and rising – has set its sights on achieving 100 per cent renewable by 2050. And finally, New Jersey-based Clearway Energy Inc. owns wind and solar plants across the United States.

We advise investors to do additional research on any investments we identify here.

Renewable energy stocks poised to move higher

Ranking*CompanyTickerDiv. Sustainability RatingPointsDiv. Yld. (%)Mkt. Cap. ($ Bil.)**1Y Ttl. Rtn. (%) Recent price ($)**
1Algonquin Power & UtilitiesAQN-TAbove Average93.912.619.121.39
2NextEra Energy Inc.NEE-NAbove Average91.8148.939.377.54
3Brookfield Renewable PartnersBEP-UN-TAbove Average83.123.434.577.36
4Xcel Energy Inc.XEL-QAbove Average82.338.724.374.69
5Clearway Energy Inc. CWEN-NAbove Average74.36.155.930.64
6Innergex Renewable EnergyINE-TAbove Average73.04.245.924.18

Dividend Advisor

*Ranking is determined by TSI Dividend Sustainability Score; where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements. **Share price and market cap are in native currency.

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/05/24 4:00pm EDT.

SymbolName% changeLast
Algonquin Power and Utilities Corp
Nextera Energy
Brookfield Renewable Partners LP
XCEL Energy Inc
Clearway Energy Inc Cl C
Innergex Renewable Energy Inc

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