Who says it’s impossible to generate maximum profits by investing in high yield renewable energy stocks? It is very possible. You just need to look at the right places. The solar and wind power energy businesses are growing very fast although they need heavy initial capital investment. The two contribute to high yielding investments in the energy industry.
The high yield energy renewable stocks include the following:
1. 8point3 Energy Partners (NASDAQ: CAFD)
Matt DiLallo and Tyler Crowe have a share ownership in 8point3 Energy Partners. The solar-focused yieldco pays its investors well at 7.3% return investment. The payout is expected to increase by 12% this year because of the previously completed acquisitions. Its current payout is stable since 8point3 generates constant cash by selling power on long-term contracts and to high net worth clients. The solar sites produce the power sold.
8point3’s sponsors, First Solar and SunPower, provide the company with endless acquisition opportunities that drive growth. The sponsors are currently in a discussion to determine what’s next with their stock in yieldco. This situation has created uncertainty in the distribution growth beyond 2017. The decision will result to a 100% buyout that would take the company private and bring a new sponsor with a new set of opportunities or merge it into another entity.
Despite the current uncertainty in 8point3, the company still has the potential to deliver high yields that will initiate fast growth in the future if it gets right sponsors.
2. Brookfield Renewable Partners
Matthew DiLallo has a share investment in Brookfield Renewable Energy Partners. Majority of the company’s investment opportunities are limited to the U.S. market since electricity market in the U.S. is mature, but programs are underway to take it to more dynamic markets where there’s high electricity demand.
Currently, a third of the company’s asset portfolio is outside North America. The company recently acquired TerraForm Global. That gives Brookfield a chance to break into the Indian and Chinese markets where there’s high electricity demand compared to North America.
Brookfield has been able to maintain a high investment rating through its strong financial position, management team and a tendency of being opportunistic about of buying power assets which have proven to generate 16% annual returns for more than ten years. The asset purchases are on long term contracts, and with an excellent debt rating.
3. Pattern Energy
Nothing excites investors than finding a renewable energy stock that has secure dividends. Pattern Energy gives its investors a 6.8% dividend. The company owns a portfolio of 20 wind power facilities which produce 2, 736 MW of electricity. The wind power facilities are situated across the United States, Canada, and Chile. The electricity generated is sold locally on long-term contracts with the current average portfolio being 14 years. The company generates constant and long-term cash flow.
A Final Thought:
The three high yield renewable stocks generate stable and long-term healthy cash flow to the investors, and this is set to increase in the future. Governments across the globe are working around the clock to improve the usage of renewable energy, wind power included. The above stocks are a must-consider for investors looking for high yield renewable energy stocks.