Investing With A Climate Change Focus - Part 2

This is my second part of my Investing With A Climate Change Focus.  You can read the first part, by clicking here.

In recent years, we have seen more and more extreme weather events occurring around the globe.  

In fact, in recent months we have seen some extreme weather events such as the atmospheric rivers that occurred in the province of British Columbia and the north western United States.  The Nooksack River in Washington State breached its banks.  When this happens, the overflow flows North into British Columbia. This flooded the area known as the Sumas Prairie which is located in the Abbotsford area of British Columbia

The atmospheric rivers caused large amount of rain to fall in a very short time.  British Columbia dealt with large amounts of wildfires and a heat dome even during this past summer.  The former event caused the latter event to be more destructive according to scientists.  The atmospheric rivers caused damage to several major highways including the main highway that connects the Vancouver area with the rest of Canada.  The main highway is the Coquihalla highway, which is still closed until at least January 2022.

As of the time of this writing, highway 3 has been fixed and his open to commercial traffic only.  This highway is mostly single lane in either direction with a lots of twists and turns and hills.

The port of Vancouver was effected from these atmospheric weather events due damage to the rail lines servicing the port.  The rails have  resumed operation.

I could mention more extreme weather events, but we constantly hear about them on a monthly basis in the news.

Investment #1   New Flyer Group

(Source: nfigroup.com)

Public transportation will play a more important role going forward.  As governments around the world implement a carbon tax, the cost of things will increase.  This will include driving a vehicle, heating your home, and the food you eat.   A way to reduce the amount of carbon tax you pay is to use public transportation which includes buses, light rail trains or subways.

New Flyer Group is mostly known as a manufacture of buses.  New Flyer Group consists of 13 subsidiaries.  NFI's CEO and President said, "NFI has successfully transitioned from a vehicle manufacturer to an electric mobility solutions provider, with an offering that includes zero-emission buses and coaches, charging infrastructure, telematics, and parts and service."

New Flyer buses are currently used in 13 countries.  Within these 13 countries,  the buses are currently used in 80+ countries or on order.  New Flyer Group have delivered 1701 zero-emission buses since 2015.  

New Flyer Group trades on the Toronto Stock Exchange under the ticker symbol NFI. The stock has fallen from its 52 week high due supply chain issues that are affecting global shipping.  

Ticker Symbol :    NFI.TO

Dividend:             $0.2125 quarterly

Closing Price:       $19.09  (as of December 16)

Yield:                   4.45%   

The stock is currently yielding 4.45%, which is 41 bps above the stocks own 5 year average yield.  

(Source: nfigroup.com)

Investment # 2   Algonquin Power and Utilities

Algonquin Power and Utilities consists of 2 divisions.  The two divisions are Regulated Services Group and Renewable Energy Group.  

Click To Enlarge

Regulated Services Group provided rate regulated water, electric, and gas utilities to over one million connected customers in communities across Canada and the United States.  These utility services consist of electricity distribution, natural gas distribution, water distribution, and wastewater treatment.

The Renewable Energy Group generates and markets electrical energy produced by its large portfolio of renewable power facilities.  The facilities are located in both Canada and the United States.  The renewable energy is generated via solar, thermal, hydroelectrical and wind.

As of September 30, 2021, Algonquin Power and Utilities gas over 4 GW of Renewables in operations or under construction.

As per the 2020 annual report, renewable power generation made up 55% of their power generation.  The company's goal is to have 75%  of renewable power generation by 2023.

Ticker Symbol:          AQN.TO

Dividend:                  $0.1706 USD quarterly

Closing Price:             $17.68 (December 16, 2021)

Yield:                        4.82% 

The stock is currently 4.82% (with the CAD equivalent of dividend), which is 53 bps higher than the stocks own 5-year average yield. 

 

Investment # 3   Transalta Renewables

TransAlta Renewables Inc. develops, owns, and operates renewable power generation facilities. As of March 3, 2021, it owned and operated 23 wind facilities, 13 hydroelectric facilities, 7 natural gas generation facilities, 1 solar facility, 1 natural gas pipeline, and 1 battery storage comprising an ownership interest of 2,537 megawatts of generating capacity located in the provinces of British Columbia, Alberta, Ontario, Quebec, and New Brunswick; and the States of Wyoming, Massachusetts, and Minnesota, as well as the State of Western Australia. The company was incorporated in 2013 and is headquartered in Calgary, Canada. TransAlta Renewables Inc. is a subsidiary of TransAlta Corporation. (Source: Yahoo Finance)

Transalta Renewables is often referred to as a yield co.  This company is 60% owned by TransAlta, which means Transalta has a large interest in the success of the company.

At a future date,  TransAlta could acquire 100% of TransAlta  Renewables.

The dividend has remained the same for years and the stock has run up in the last couple of years.  The run up in price is likely due to investors looking to be in the renewable energy space.  Renewable energy is the future. 

Ticker Symbol:       RNW.TO

Dividend:              $0.07833 per share monthly

Closing Price:        $18.23 (December 16)

Yield:                    5.16%

The stock is currently yielding 5.16%, which is 117 bps below the stocks own 5 year average yield of 6.33%.   

To find out some the current facilities in operation or development, click here. 

Summary 

These 3 companies play a vital role in the transportation and utility sector.  

New Flyer Group will play an even more important role in the future as the demand for cleaner public transit vehicles will grow to help reduce global emissions.

Algonquin Power and Utilities and TransAlta Renewables provide utilities that people need.  Renewable energy will be even more important in the years to come as more countries phase out or reduce their dependency on fossil fuels.

Disclosure:  Long NFI.TO, AQN.TO

Disclosure:  Long RNW.TO (in a "savings" account)

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.