Renewable Energy Is The Future – 61 More Shares

renewable energy

Renewable Energy Is The Future – 61 More Shares

 

hey everyone

Thought I would do a quick post about our most recent purchase. The market continues to be on a tear and things seem to be changing with the way we go about our daily lives.. Obviously covid related, but moving forward one thing is clear. The world wants and needs more renewable energy.

I have said it before oil and gas will be here for awhile still, but politically the writing is one the wall. All the talk is climate change and a move towards more and more renewable energy. Companies are now getting their esg ratings and a simple way to improve them is moving towards green energy.

If I think about one sector that will really be booming in the next 10 years, renewable’s is probably at the top of the list. Of course tech, ev’s and automation is there as well, but I can see governments really pushing towards greener energy moving forward. I’m sure we will see new grants and tax savings towards, electric vehicles and more solar panels etc etc.

Solar Panels

As most of you already know, we have solar panels on our roof. It feels great being green and collecting those pay cheques from hydro one. Personally I think all new builds should be forced to install panels on them. Now I know people will argue the added costs, but the cash flow is great and really pays for itself and helps with the mortgage payments. We keep clear cutting forests and building as many houses as possible in these subdivisions, why not try to go green.. A couple trees on each property doesn’t really do much compared to the dense forest that used to be there.




I really do believe we need to change our behaviour moving forward, and I think we have been doing that with more and more green roofs and alternative energy sources. With more and more people installing panels, the costs will drop and there will be more advancements in this space.

If you want to start to go green but don’t have the capital to install a system, an easy option would be to start investing in renewable energy companies. Personally we own Brookfield Renewable and Algonquin Power in this space. Enbridge and Tc energy both have renewable’s in the portfolio too and are growing their portfolio in them, but their main business is the pipelines.

Growth/ Income / Rising Dividend

You got a guy on 2nd base, guy on first, and a big slugger on the plate. 0 outs. A fastball comes right down the plate and the batter grounds the ball right to the 3rd baseman, he tags 3rd, throws to 2nd, throws to first. A triple play.. Very nice!

That’s what you get with these renewable energy companies. A triple play.. Brookfield renewable and Algonquin power have been some of our best performing stocks. (up 240% on bep and 60% on aqn) They both pay a great dividend and every year those dividends increase. That’s what it’s all about. I see some people saying utilitys are boring and are just for income, but that hasn’t been the case. You get some real stock price appreciation as well..

Of course things can change in a rising interest environment. But with demand so high for green energy moving forward I wouldn’t bet against them. I will say though certain renewable energy companies like brookfield renewable have ran up a little fast, I don’t think they are a steal at the moment (although they have pulled back a bit lately)

Algonquin Power

Algonquin power stands out though, it hasn’t had the same kind of run and at under 20 bucks a share (Canadian), I think its a great buy. Yahoo finance says its p/e ratio is only 11.68. You also get a 3.93% starting dividend yield, that will most likely increase this month. They got a 5 year dividend growth rate of 10.01% and I could see them coming in with a 7-10% increase in May.They have raised their dividend the past 11 years straight.

They also offer a 5% drip discount, which is absolutely fantastic!

renewable energy

Source – Algonquin Corporate Information

I think this picture from their investor relations page speaks volumes.. Lots of growth in the pipeline, that will continue to grow that stock price and dividend!

The Purchase

Last week we added 61 more shares at $19.83 per share, maybe a little early as its cheaper today. But its a long term game, so in 10 years I don’t think I will mind.. This buy adds $39.70 usd to our forward dividend income and hopefully gets that quarterly dividend up enough to drip another share. That’s what it’s all about in the accumulation stage!

The utility sector has become one of our highest sectors in the portfolio and I am always hesitant to add to the higher sectors but if the stock price continues to decline, we will definitely be continuing to buy more Algonquin and Brookfield if the price is right. The demand for renewable’s will only continue to grow moving forward in my opinion.

Conclusion

Well there it is, our most recent purchase. With this one, we now have bought all 3 companies I said we would be buying more of in 2021. Lmt has had a great run since our purchase, but right now my scope is set towards it being our next buy as well, but anything can change.

What have you been buying or watching?

Cheers everyone!

21 Responses

  1. I bought AQN.TO this week as well. It was going back and forth deciding between Telus and AQN. I went with AQN as it dropped to my price range.

    New position for me.

    Looking forward to receiving dividends for years to come.

    • Rob says:

      Nice pursuit. Telus is at a nice price as well.

      I dont think you will regret algonquin, get a big enough position and enjoy the 5% drip discount.

  2. Matthew says:

    Nice buy Rob, as you know I’m a big fan of Algonquin 🙂

  3. Bought 82 shares. Unfortunately, not enough to DRIP. I am with Questrade, so there is no DRIP discount.

    Recently, I turned on DRIP for all stocks in TFSA. Only BPF.UN is big enough to DRIP in the account at this time.

  4. May says:

    I also added 400 shares more recently. Was buying since under $21. Today announced 10% dividend increase, very nice. I am holding this for very long term.

  5. Norm says:

    I’m liking that purchase Rob! While AQN isn’t my favourite dividend stock, as you’ve stated it’s obvious the world is slowly shifting to different energy sources. And because of that shift I picked up a few more shares today (another red day for AQN) enough to allow me to drip 25 shares per quarter. Feels like enough for now. 😉

    Even better is after reading the comments here, May alerted me to the 10% dividend raise, love that… 27 drips per quarter now!

    I’m planning a few more moves over the next week. Need to sell some stocks purchased on the dip in March 2020, and convert them to better quality dividend companies with higher yielding.

    • Rob says:

      dripping 25 shares a quarter? that’s awesome Norm!

      Loving the raise. Great company.
      Sounds like a food move converting to better dgi companies!
      keep it up your doing great
      cheers

  6. JF says:

    Hi

    AQN isn’t canadian ? Why do you say dividend is in US ?

    How does it work to have the synthetic drip and 5% discount ? Can you do that if you are with Questrade even if you have to go through their conpany to purchase with the discount ?

    Thanks !

    • Rob says:

      hey jf

      Algonquin pays their dividend in usd.

      From what I understand the drip discount doesnt get passed through questtrade. rbc does pass the discount though.

      cheers Rob

  7. German says:

    Nice buy, Rob. Can’t go wrong with AQN. I’m loading on this stock as well and will continue to dollar cost average to build a big position. I think they raised the dividend as well.

    • Rob says:

      hey German

      thx, Its a great one to back the truck up on but interest rates will most likely start increasing and this would be bad for them. Ill slowly continue building our position. They raised it 10% very nice!

  8. Thanks for the write up on AQN, Rob! I added it to my watchlist. I haven’t really looked at this stock much yet. I’ve been looking for new stocks to buy because it’s getting harder to find value. Hope you’re doing well man.

    • Rob says:

      hey graham

      Thanks man, this is a great stock at a nice price at the moment. Life is great, hope lifes good for you as well
      cheers

  9. SavyFox says:

    Hi Rob
    Fully agree, renewable energy is the future! I’ve not yet a position in this area, so AQN is definitively worth a closer look.
    Thanks for sharing and all the best.
    Cheers
    SavyFox

  10. Gus says:

    Hello Rob,
    regarding AQN I know it’s a great stock but they keep issuing more shares every year in millions so is that something to be concerned about ?
    Thanks

    • Rob says:

      hey Gus

      Welcome. Of course that is something to be a little concerned about, but they have been very good stewarts with their cash. Funding new projects and increasing that cashflow all while boosting that dividend considerably. What I have learnt over the years is when ever they issue new shares and the stock price drops, thats a great time to buy.

      Hope that helps, cheers Gus!

  11. Gus says:

    Thanks Rob ,
    I do have one more question for you its regarding Enbridge , i know you have a position in the company and with all the legal battles for line 3 and 5 do you still consider it as a safe dividend stock ? Thanks

    • Rob says:

      hey Gus

      everything always has a risk. I think the legal battles show how wide of a moat these existing pipeline companies do have.
      There is also a canadian us treaty that says you cant just shut down existing pipelines, so I dunno why these lawsuits in Michigan are even a thing.

      That being said they are also making a big push into green energy.

      Dividend Sensei did a fantastic article on enbridge yesterday. It’s probably a great idea to read that if your interested in enbridge

      4 Reasons Global Aristocrat Enbridge Is A Rich Retirement Dream Stock https://seekingalpha.com/article/4433559-enbridge-four-reasons-it-is-a-rich-retirement-dream-stock

      I have been a happy enb shareholder for awhile now.

      cheers gus

  12. Gus says:

    Thank you so much for your reply and thanks for the link I will take a look at it for sure.

Id love to Hear What You Think

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