Investors typically see renewable energy companies as fast-growing but risky businesses. But not all renewable energy stocks are risky. Let's look at five such companies that have exhibited consistent performance for years. Moreover, these companies pay growing dividends.
Growing dividends
The five companies are Brookfield Renewable Partners (BEP +0.03%), NextEra Energy Partners (NEP 1.17%), Atlantica Sustainable Infrastructure (AY +0.00%), Algonquin Power and Utilities (AQN +0.33%), and Clearway Energy (CWEN 0.54%).
NextEra Energy Partners has nearly doubled its quarterly dividend in five years; it raised its distribution by almost 15% in the first quarter. The utility has a portfolio of around 8 gigawatts (GW) of renewable energy projects in the U.S.
BEP dividend per share (quarterly). Data by YCharts.
Similarly, Atlantica Sustainable Infrastructure and Algonquin Power and Utilities have grown their payout consistently over the years. Notably, Algonquin Power owns a 43.5% stake in Atlantica. So investors will gain exposure to Atlantica's growth if they buy Algonquin Power stock.
The drop in Brookfield Renewable Partners' dividend seen in the chart above is attributable to the creation of Brookfield Renewable Corporation (BEPC +0.00%) in 2020, whereby unitholders received a share of BEPC for every four BEP units they held. This change did not cut the dividend that shareholders received. Adjusting for the impact, Brookfield Renewable Partners' distribution has grown at a 6% compound annual rate over 10 years.
NYSE: BEP
Key Data Points
Lastly, Clearway Energy, which had to cut its dividend in 2018 following the PG&E (PCG +1.80%) bankruptcy, has raised it again to more than what it was prior to the cut. Clearway owns over 5 GW of wind and solar projects and more than 2.5 GW of natural gas generation facilities.
Overall, these renewable energy companies are all paying healthy and growing dividends.
Attractive dividend yields
Their yields are also appealing. Atlantica Sustainable Infrastructure has a yield of 5.8% as of this writing. By comparison, Brookfield Renewable Partners offers a yield of 3.5%.
BEP dividend yield. Data by YCharts.
Stocks of Clearway Energy, Algonquin Power and Utilities, and NextEra Energy Partners all offer yields above 4%. What's more, all the five stocks have declined so far in 2022, offering attractive entry points for long-term investors. Notably, the year-to-date fall in the prices of these stocks is either less or in-line with the broader market. There are no glaring fundamental issues specific to the companies that's impacting their stocks.
Overall, solid yields, strong dividend growth histories, and a positive long-term outlook for renewable energy make these five stocks appealing for dividend investors.
