Podcast: Best Clean Energy Stocks and Funds

Best Clean Energy Stocks and Funds articles include: “4 ETFs targeting clean water, wind energy, the smart grid — and one that has them all”; “Best renewable energy to watch out for in 2022”; “3 Alternative Energy Stocks to Watch As Wind Power Expands”; and “2 Renewables Stocks That Could Have You Seeing Green”. Seven more!

Podcast: Best Clean Energy Stocks and Funds

Transcript & Links, Episode 82, May 6, 2022

Hello, Ron Robins here. Welcome to my podcast episode 82 published on May 6, 2022, titled “Best Clean Energy Stocks and Funds” — and presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing mentoring, news, commentary, information, and resources.

Remember that you can find a full transcript, and links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.

Now if any terms are unfamiliar to you, simply Google them.

Also, just a reminder. I do not evaluate any of the stocks or funds mentioned in these podcasts, nor do I receive any compensation from anyone covered in these podcasts. Furthermore, I will reveal to you any personal investments I have in the investments mentioned herein.

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1. Best Clean Energy Stocks and Funds

So let’s begin with this article titled 4 ETFs targeting clean water, wind energy, the smart grid — and one that has them all by Rachel Koning Beals. It appeared on marketwatch.com. Here are some quotes from Ms. Koning Beals on each of her four recommendations.

“For some investment advisers and stock-pickers, so-called green investing is far from just a feel-good move… One such investment adviser is Daniel Milan of Cornerstone Financial Services in Southfield, Michigan…

1) Is First Trust Water ETF (FIW)

The fund holds 36 of the largest U.S.-listed water companies, ranked by market cap and weighted equally within five tiers. Milan says… ‘Our water thesis is short-term, intermediate-term and long-term…’

In the U.S. alone, fixing the water infrastructure — including ridding groundwater of what are usually known as ‘forever chemicals’ — featured only behind transportation as the largest recipients of funding in last year’s $1.2 trillion infrastructure law…

Milan said. ‘I’m from Michigan. Flint lived its water crisis and we all lived it to some extent… I don’t think that crisis water scenario is unique.’

2) First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID)

…  is a concentrated fund targeting global equities determined to be in the smart grid and electrical energy infrastructure sector, Milan says…

The sector may include business in electric grid, electric meters and devices, networks, energy storage and management, and enabling software.

3) First Trust Global Wind Energy ETF (FAN)

Most wind ETFs are too small to pass Milan’s sniff test… The best, meaning larger, option may be First Trust Global Wind Energy ETF. It saves roughly 60% of its weighting for pure plays in the wind industry, including turbine manufacturers and operators, and allocates the remaining 40% to diversified sector, says Milan.

This mix might frustrate some investors who envision a pure play. In fact, they may find more desirable wind opportunities in a broader clean-energy ETF.

4) First Trust NASDAQ Clean Energy Sector ETF (QCLN)

… holds a broad portfolio of U.S.-listed firms in the clean energy industry. Eligible companies must be manufacturers, developers, distributors or installers of one of the following sub-sectors: advanced materials (that enable clean-energy or reduce the need for petroleum products), energy intelligence (smart grid), energy storage and conversion (hybrid batteries) or renewable electricity generation (solar, wind, geothermal, etc.)…

Milan acknowledges recent volatility in this ETF and other macro-level sector funds as broader market consensus has favored names with high cash flow and strong balance sheets over high-growth companies.” End quotes.

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2. Best Clean Energy Stocks and Funds

It seems that the media is again filled with analysts reviewing renewable energy-related stocks and funds. So, most of the following articles refer to that space.

This next article is titled Best renewable energy to watch out for in 2022 by Alex Artenie. It’s on medium.datadriveninvestor.com site. Here are some quotes from Mr. Artenie on each of his picks.

“1) NextEra Energy (NEE)

While not a household name, this company is the world’s largest wind and solar energy producer. It has production facilities in Florida and sells power through purchasing power agreements (PPAs) to other utility companies and also directly to consumers.

You should watch NextEra Energy closely as it has yielded about 700 percent in returns in the last decade. The company has enjoyed above-average growth, increasing its dividend yearly for more than a quarter of a century.

2) Brookfield Renewable (BEP)

Brookfield is one of the global leaders in hydroelectric power production. Hydropower makes up more than 62 percent of its energy portfolio in 2021. However, the company is also into wind energy, solar energy, and energy storage businesses.

Steady cash flow comes from long-term energy contracts with PPAs, which buy most of its energy.

Brookfield stock has generated an annual return of 20 percent for its investors since it began operating. Dividend payments have grown at a 6 percent compound annual growth rate starting from 2012.

The company is projecting more growth based on its extensive renewable energy projects billed to come online soon.

3) Clearway Energy (CWEN)

Clearway is a big-time player in the American renewable energy market. In addition to extensive wind and solar energy portfolios, the company operates highly efficient power plants running on natural gas. It also sells its energy to PPAs, ensuring a constant revenue stream.

Since its inception, investors in Clearway stocks have reaped annual returns that total almost 10 percent. The firm is controlled by Global Infrastructure Partners, a private equity company. Clearway is gunning for between 5 and 8 percent annual dividend growth in the nearest future.” End quotes.

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3. Best Clean Energy Stocks and Funds

My next renewable/alternative energy article is titled 3 Alternative Energy Stocks to Watch As Wind Power Expands by Aparajita Dutta. Found on zacks.com. Here are some of Ms. Dutta’s comments on her stock picks.

“1) TotalEnergies (TTE - Free Report)

Based in France, TotalEnergies is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization. Earlier this month, TotalEnergies and ENEOS Corporation announced a collaboration to jointly conduct a feasibility study to assess the production of Sustainable Aviation Fuel (SAF) in ENEOS Negishi Refinery in Yokohama City, Japan. The proposed unit, with a capacity of 300,000 tons per year of SAF, once operational will allow TotalEnergies to offer a sustainable supply chain of SAF in Japan around 2025.

The Zacks Consensus Estimate for TotalEnergies’ 2022 earnings has improved 31.8% in the past 60 days and implies an improvement of 58.7% from 2021’s reported earnings figure. The company delivered an average earnings surprise of 18.88% in the last four quarters…  TotalEnergies currently sports a Zacks Rank #1 (Strong Buy).

2) Evergy (EVRG - Free Report)

Based in Kansas City, MO, this company provides clean, safe and reliable energy to 1.6 million customers in Kansas and Missouri… Its 2021 adjusted earnings per share were $3.54, reflecting a 14% year-over-year increase and a 7% increase over the $3.30 mid-point of the company’s original 2021 adjusted EPS guidance range. This indicates the company’s operational strength.

The Zacks Consensus Estimate for Evergy’s 2022 earnings has improved 0.6% in the past 60 days. The company delivered an average earnings surprise of 87.44% in the last four quarters. It boasts a long-term earnings growth rate of 6.1%. Evergy currently carries a Zacks Rank #2 (Buy).

3) Brookfield Renewables (BEP - Free Report). (Yes again!)

Based in New York, Brookfield Renewables operates renewable power assets in the United States, Brazil and Colombia. In April 2022, Brookfield formed a strategic partnership with SSE Renewables for participation in the 1.4GW Hollandse Kust (west) offshore wind farm zone tenders, which are currently underway in the Netherlands…

The Zacks Consensus Estimate for Brookfield Renewables’ 2022 earnings has improved in the past 60 days while that for sales implies an improvement of 11.6% over 2021’s reported sales figure. Brookfield Renewables currently has a Zacks Rank #3 (Hold).” End quotes.

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4. Best Clean Energy Stocks and Funds

The last article I’m reviewing today is titled 2 Renewables Stocks That Could Have You Seeing Green. It’s by someone I feature in almost every podcast, Matthew DiLallo, on fool.com. Here’s s some of what Mr. DiLallo has to say about these two stocks.

“1) Atlantica Sustainable Infrastructure (AY)

… focuses on owning environmentally sustainable infrastructure assets like renewable energy generating facilities, water desalination plants, electric transmission lines, and cleaner-burning natural gas power plants. These assets generate relatively predictable cash flow backed by long-term contracts and government-regulated rate structures. That gives Atlantica the funds to pay an attractive 5.7%-yielding dividend…

Atlantica is targeting to invest at least $300 million per year in renewable energy and other sustainable infrastructure projects. This investment rate should grow its cash available for distribution by 5% to 8% per year. That will enable the company to continue growing its high-yielding dividend… investors should also benefit from a steadily rising stock price, adding to their returns.

2) Clearway Energy (CWEN)(CWEN.A) (Yes, again!)

Clearway Energy focuses on producing cleaner electricity from wind, solar, and natural gas power plants. It sells this energy under long-term contracts to end users like utilities. That enables it to generate relatively stable cash flow to support its 4.3%-yielding dividend.

The company has also steadily increased its payout by expanding its portfolio, primarily through acquisitions. It invested $820 million across a range of transactions last year, including purchasing projects developed by its sponsor Clearway Energy Group (CEG). These deals help support Clearway's target to grow its dividend by 5% to 8% per year. 

The company believes it can deliver dividend growth toward the high end of that target range through at least 2026. One key power source is the upcoming sale of its thermal business. It will receive $1.35 billion in net proceeds, giving it the cash to reinvest in higher-returning opportunities. It already has $600 million in deals lined up. That leaves it with $750 million to allocate toward future acquisitions.

Given (the company’s) vast development project pipeline, Clearway should have plenty of options. (It) has 19 gigawatts (GW) of renewable energy projects in its backlog, including 2 GW that it plans to start building this year. That's a sizable opportunity set for Clearway, considering its current portfolio size of 9 GWs…

Clearway Energy offers investors a high-powered dividend that should generate a lot of green in the coming years. Add in the potential appreciation in its stock price, and Clearway could be a big-time green investment.” End quotes.

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Other Honorable Mentions—not in any order and a reminder that for links to these articles go to investingforthesoul.com/podcasts and scroll down to this podcast page.

1) Title Bank of New York Mellon a Top Socially Responsible Dividend Stock With 2.9% Yield on Nasdaq. By BNK Invest.

2) Title What are the most responsible (Canadian) funds? On the Corporate Knights site. By Tim Nash.

3) Title LGBTQ+ Friendly Investments: What They Are & How to Find Them on investorjunkie.com. By Christopher Murray.

4) Title Green Bonds Become ESG Fixed Income Cornerstone on ETF Trends. By Tom Lydon.

Articles for UK, Australian, and International Investors—again links on this podcast’s webpage

1) Title How to invest in sustainable food: Six best fund ideas on This is Money. By Tara Clee.

2) Title Here are 2 top ETFs for ASX investors to buy next week on fool.com.au. By James Mickleboro.

3) Title Top 10 most-popular investment trusts: April 2022 on ii.co.uk by Kyle Caldwell.

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Ending Comment

Well, these are my top news stories with their stock and fund tips -- for this podcast: “Best Clean Energy Stocks and Funds.”

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Talk to you next on May 20. Bye for now.

© 2022 Ron Robins, Investing for the Soul