Renewable energy stocks seem to have caught investors' attention like never before, resulting in their enormously high valuations. While companies focusing on technology, such as fuel cells or solar power components, keep on grabbing headlines, several not-so-popular renewable energy infrastructure companies and utilities continue to grow their top and bottom lines. Here are five such companies that not only provide alluring growth prospects, but appealing dividends too.
Brookfield Renewable Partners
Brookfield Renewable (BEP 1.40%) (BEPC 2.46%) primarily generates power from hydro, wind, and solar sources. Nearly two-thirds of the company's generation is from hydropower. It recently made a big bet on distributed solar generation by acquiring $810 million of Exelon's solar assets.
The company has done a commendable job of growing its revenues and funds from operations over the years, both organically and through acquisitions. In the latest quarter, the company grew its generation by 10% and funds from operations by 18%. Brookfield Renewable raised its dividend by 5% in the fourth quarter and expects to grow it by 5% to 9% annually. In addition to attractive growth prospects, the stock currently offers a dividend yield of 2.7%.
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Atlantica Sustainable Infrastructure
Atlantica Sustainable Infrastructure (AY 0.65%) primarily owns and manages renewable energy assets with long-term revenue contracts. Nearly 70% of the company's cash flows come from renewable energy generation. It is also involved in gas-fired generation, electric transmission, and water desalination. Nearly 45% of the company's assets are in North America, while roughly 35% are in Europe.
In the first nine months of 2020, the company grew its cash available for distribution (CAFD) by 6.4% year over year. Atlantica Sustainable has shown a decent growth after separating from its troubled parent Abengoa at the end of 2015. The company targets growth investments of $200 million to $300 million per year. In 2020, it invested, or reached agreements to invest, around $322 million in growth projects. All in all, Atlantica Sustainable Infrastructure's 3.7% dividend yield looks to be on a sustainable footing.
Clearway Energy
Controlled by asset manager Global Infrastructure Partners, Clearway Energy (CWEN 1.19%) owns over 7,000 MWs of wind, solar, and gas-fired power generation assets. The company has been growing its operational cash at a healthy pace, thanks to its growth investments.
BEP Cash from Operations (Quarterly YoY Growth) data by YCharts
Clearway Energy raised its third-quarter dividend by 1.8%. In the long term, it targets annual dividend growth of 5% to 8%. The company expects nearly 5% growth in its cash available for distribution in 2021. Clearway Energy committed more than $450 million to growth projects in 2020. With a 3.2% dividend yield, and a healthy project pipeline, Clearway Energy stock offers attractive growth prospects along with appealing dividend income.
NextEra Energy Partners
NextEra Energy Partners (NEP 1.18%), subsidiary of utility NextEra Energy (NEE 1.57%), owns and operates wind, solar, and natural gas infrastructure assets in the U.S. The partnership grew its cash available for distributions by a notable 40% in 2020. This helped it in increasing its annual distributions by an impressive 15% over 2019. NextEra Energy Partners expects to grow its CAFD by around 12% by the end of 2021.
Furthermore, the company expects to grow its distribution at an average annual rate of 12% to 15% through 2024. NextEra Energy Partners recently acquired a 40% interest in a 1-gigawatt renewables portfolio from NextEra Energy. The partnership is well-placed to grow through future dropdown acquisitions from parent NextEra Energy, which has one of the largest renewable energy portfolios in the U.S. Due to a steady rise in NextEra Energy Partners' stock, it now offers a modest yield of around 2.8%. However, with promising growth prospects, the stock offers an attractive total-return proposition.
BEP Dividend Yield data by YCharts
Algonquin Power & Utilities
Algonquin Power & Utilities (AQN 2.36%) operates regulated water, electric, and gas utilities in the U.S. and Canada. Additionally, it owns and operates renewable power generation assets, including wind, solar, hydroelectric, and thermal assets. Regulated utilities account for roughly 70% of the company's revenue, with renewables generation accounting for the remaining 30%.
Algonquin Power & Utilities boasts a 10-year compound annual dividend growth rate of 10%. What's more, over the next five years, the company expects to spend $9.4 billion on growth projects. That should allow it to continue growing its payout, too. With an attractive yield of nearly 3.5%, this is one of the best renewable energy stocks to add to your dividend portfolio.
