One very commonly overlooked detail about the renewable energy industry is the role financing and owning renewable energy assets has on the industry.
Energy couldn’t possibly compete with fossil fuels without the implication of low-cost financing, as projects must be financed over decades to justify the upfront cost.
That led to the multibillion-dollar industry for finance companies and utilities that are getting involved with energy projects across the globe.
Looking at how things are going in the industry now, many people agree that Hannon Armstrong (NYSE:HASI), NextEra Energy (NYSE:NEE), and Dominion Energy (NYSE:D) are among the most lucrative energy dividend stocks in the present.
Energy Dividends – Diversity And More
There are numerous ways to generate yield in the renewable energy business, such as owning electricity-producing assets, owning land under projects, or financing efficiency upgrades.
Hannon Armstrong, for example, likes to join any renewable energy markets where there’s a chance of making a predictable rate of return, allowing for projects with high return rates relative to risk to be possible.
Some specialists expect that the distributable earnings per share will increase from $1.55 in 2020 to $1.90 – $2.06 by 2023, with a compound annual growth rate of 7-10 %.
Also, the dividend is predicted to grow to between $1.49 to $1.57 over the same time period.
Many people are afraid of the possible market downturns, as the “on-paper” gains gan quickly vanish.
However, in reality, stepping into the game during stock declines can be very efficient for setting up an investor’s portfolio for outsize gains upon a recovery.
For that to happen, wannabe investors must have lots of money ready for disposal at an adequate time.
That being said, the energy market is slowly becoming more attractive for numerous investors, as the demand keeps rising due to factors like the increase of big power consumers such as electric vehicles.