Green energy stocks attracting investors

/ Editor’s Letter / Tuesday, 25 February 2020 09:21

Over the years, the stocks of renewable energy companies have attracted investors’ interest whether for solar or wind farms.

Last year has been an excellent one for investors who were looking to capitalize on renewable or green energy especially if you’re able to make 22% returns out of a wind farm.

According to the S&P 500, some companies make 30% and others up to 60% for a fund holding 22 companies of the sector. For example, Clearway Energy battled through a challenging year in 2019. The company initially expected that it would be able to increase its dividend by another 5% to 8% in 2019, powered by its growing portfolio of cash-flowing renewable energy assets. However, the company had to modify its expectations when one of its key customers – California-based utility Pacific Gas & Electric (NYSE: PCG) – filed for bankruptcy. Those moves initially weighed on Clearway's stock. However, it went on to bounce back thanks to its solid operating results and the progress of PG&E's bankruptcy proceedings. Because of that, the company's shares rose by 16% in 2019. Add in its high-yielding dividend, and the wind and solar power producer's total return approached 22%.

Clearway Energy appears well-positioned to generate strong total returns once again in 2020. Thanks to its growth-focused initiatives, it's back on track.

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