Ready for Canada’s renewable energy push?
As the economy moves to reopen and stock markets indicate a return to pre-pandemic activity, traders are likely to hedge on the future, it is undeniable that this future will look different than the market landscape we were used to.
Stockhouse Editorial recently looked at a segment of the Exchange Traded Fund (ETF) marketplace in all things
“ESG”, as a growing number of investors track the performance of indexes oriented toward positive environmental, social and governance characteristics.
Is the stock market ready for a major financial shift where investments into sustainable companies is commonplace among retail investors and even major hedge funds?
This chart from
Livemoney’s “$30-Trillon-Plus Mega Trend” shows gains clocking in at more than twice the peaks seen in the decade leading up to 2018, also notice how the upward jolt predates the COVID-19 outbreak by just a few months.
For investors looking for a few more opportunities in ESG investing, here are a couple of ground-level stocks that qualify from a variety of backgrounds.
Electric utility company
Boralex Inc. (TSX: BLX) produces its main renewable energies through wind, hydroelectric, thermal
and solar sources to help power homes across Canada, the US, the UK and France. It was in large part due to 38% increase in wind power production in France that BLX was able to report a combined EBITDA of
$169 million, up $15 million, (10%) in Q1 2020, than in Q1 2019. Discretionary cash flows also came in at $68 million, up 59% over the $44 million recorded in Q1 2019.
Renewable energy provider
Westport Fuel Systems (TSX: WPRT) focuses on the transport industry with its high-performance, low-emission engine and fuel system technologies that utilize gaseous fuels. It also has a strong footprint in Europe, as well as Asia and North America. In March, Westport reported its Q4 2019 revenue had increased
$13.8 million (23%) over the prior year quarter in 2018. Transportation revenue for 2019 had jumped by 13% to $305.3 million from $270.3 million in 2018. WPRT will disclose its
Q1 2020 financial results on Thursday, June 4th, 2020 after market close.
In Canada’s telecom industry,
BCE Inc. (TSX: BCE) is another name worth looking into. One of the top three national
wireless and internet service providers, BCE has taken significant steps to minimize its carbon footprint, touting its environmental management system (EMS) has been certified to be ISO 14001-compliant since 2009.
See also: Telecom Stocks Feel the Weight of COVID, but will it Pay Off?
In the face of the COVID-19 coronavirus pandemic, the company still delivered impressive results. It had recently reported
in its Q1 2020 results an adjusted EBITDA up 1.4% on year-over-year growth of 4% at Bell Wireless and 0.5% at Bell Wireline, driving $1,451 million of cash flows from operating activities and free cash flow of $627 million.
This could be free-market sentiment in its purest form dictating the next steps under a brave new world.
Did it take a major global pandemic to initiate a shift toward sustainable companies, or was this change always looming and has since ballooned since the onset of this crisis? Let us know what you think in the comments below.