Global warming could have a significant impact on our economy if left unchecked. This is why governments and other institutions are investing heavily in cleaner alternative energy sources to reduce the carbon dioxide emissions that cause climate change.
Several companies have joined this fight. We asked some of our contributors who stand out as leaders. This is why they believe TotalEnergies (NYSE: TTE), Brookfield Renewable Power (NYSE: BEP)(NYSE: BEPC), and NextEra Energy (NYSE: NEE) are great stocks to consider owning as the fight against global warming intensifies.
Slowly but surely, we succeed
Brewer Ruben Gregg (Total energies): Formerly known as Total, the French integrated energy giant changed its name to TotalEnergies in 2020 to mark a major business transition. Indeed, management has seen the writing on the wall and is moving to increase its exposure to clean energy. However, its activity remains linked to carbonaceous fuels and will be so for years to come. Fear not, this is actually a good thing.
Due to concerns about global warming, the world is moving away from coal and oil. TotalEnergies does not produce coal and is actively working to reduce its dependence on oil by focusing on its best assets. Meanwhile, the company’s exposure to natural gas is expected to increase. Even though it is a carbonaceous fuel, its combustion is cleaner than coal or oil and should facilitate the transition to cleaner alternatives. At the same time, TotalEnergies plans to triple the size of its “electron” business by 2030.
If dealing with global warming were as easy as flipping a light switch, it would be a terrible plan. Fortunately for TotalEnergies, energy transitions take time (think decades). And, as a result, it can still bleed the oil and gas sector from the cash cow to fund its transition to a cleaner future. This is a particular victory for dividend investors, as the company believes it can maintain, and possibly even increase, the dividend as it moves with the world around it. This means that the big 6.2% dividend yield looks very solid despite the negative opinion many investors have of oil. Indeed, this energy giant is tackling global warming and paying investors exceptionally well to stick around.
The decarbonisation partner of choice
Matt DiLallo (Brookfield Renewable): Brookfield Renewable is a global leader in the production renewable energy. It currently operates 20 gigawatts of renewable power generation capacity, including hydroelectric, wind, solar and energy transition assets. This existing portfolio is the equivalent of eliminating all of London’s annual emissions or taking 6 million cars off the road.
However, it is still in the early stages of the fight against global warming. The company has 31 GW of renewable projects currently in its development pipeline. That’s enough clean energy to offset all of Houston’s annual emissions (the center of America’s oil and gas industry) or power 6 million homes for a year. These projects span the gamut from new hydropower, onshore wind and rooftop solar power plants to emerging opportunities such as wind recharge, offshore wind and green hydrogen.
Brookfield is also becoming the partner of choice for institutions seeking to decarbonize their operations. For example, he partnered with Trane Technologies to deliver decarbonization as a service, combining its expertise in rooftop energy and solar energy storage with Trane’s energy efficient systems. It has also partnered with tech giants like Amazon and Apple to help them achieve their climate goals.
Brookfield Renewable is one of the best positioned companies to fight global warming. It is a leader in renewable energy production and has an even larger (and growing) backlog of development projects to help keep climate change at bay.
Fight head-on against global warming and profitably
Neha Chamaria (NextEra Energy): Since fossil fuels are the primary driver of global warming, any business striving to decarbonize the world through products and services focused on cleaner energy sources deserves your attention. And if the business is already at the forefront of clean energy, you’ve probably found a winner in the making. NextEra Energy is the best example of this: the company is already the world’s largest producer of wind and solar energy, operates natural gas and nuclear power assets and aspires to be the “largest and most important clean energy supplier. the most profitable in the world ”.
In July, NextEra Energy had an order book of nearly 16.7 GW of signed contracts. The company plans to increase its adjusted earnings per share from 6% to 8% through 2023 from the 2021 base, increase its operating cash flow in line with adjusted earnings and increase the dividend annually. by 10% until at least 2022. By 2024, NextEra Energy plans to have built a pipeline of nearly 30 GW at its highest estimate.
So far, NextEra Energy’s dividend growth has been a huge contributor to increasing shareholder returns, and I don’t see why the trend won’t continue, given that the world has just started the transition to energies. renewable. In other words, NextEra Energy is not only providing a solution to global warming through renewables, but is doing so cost-effectively and sharing a good chunk of those profits with shareholders. In fact, you’d be hard pressed to find a better Dividend Aristocrat Action to fight global warming head-on.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.