Green (?) Energy companies?

I would like to include some high yield energy stocks to my dividend portfolio.
Issue is I prefer rather green plays than stocks like Exxon etc.

I know that some legacy energy giants are investing in green energy, such as chevron

What is your opinion, which companies are best poised for a green transformationn of its core business. Time is eventually running out for fossil fuels, we can all agree on that

I believe this would give exposure to this sector + green energy growth + dividends, good combo!

I’d have a look at investment trusts such as UKW and TRIG which both pay dividends and offer broad exposure. More options in the green infrastructure industry can be found below:

https://www.theaic.co.uk/aic/find-compare-investment-companies?sec=REI&sortid=Name&desc=false

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Check the pies section on Trading 212 there’s a pie made for green energy stocks

https://www.trading212.com/pies/l7iW1kbuXJaOxoaR20gCfa7g78pw

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How about SSE?

https://api.londonstockexchange.com/api/gw/lse/download/SCSSE/tearsheet

National Grid perhaps as well if it drops?
https://api.londonstockexchange.com/api/gw/lse/download/NANGA/tearsheet

If you are also interested in Growth + Dividends, then I have to say I am a fan of Ceres Power, if you dont mind the volatility!

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I was into ceres power, sold near peak! Did not know they pay a dividend, did they announce something?

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It was more to add growth to your dividend portfolio.

What is your aim?

If long term investing, I would look for the best total return, so dividend plus capital potential.

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Avangrid (AGR) might be close to what you’re looking for.
Or Korea Electric Power Corporation (KEP).

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It might be interesting to compare the selection of companies highlighted, to some of the green energy ETFs and what is in them?

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The two energy related companies I own are BP and NEE. BP is a more significant holding for me than NEE as I am more bullish on it, especially as it is undervalued. Key points to get your started on BP:

  • Short term/mid term oil prices important as most profit still from that. (Currently making serious cash flow due to oil price).
  • With their great cash flow they have a sustainable dividend at circa 5%.
  • 60% of excess cash flow to be returned to shareholders through buybacks and dividend. (This will be buybacks mostly, but could see a div raise of say 15-30% in coming couple years)
  • Investing HEAVILY into solar and wind.
  • Arguably one of the companies who is positioning well to be the supplier of charging to lots of EVs as that takes off, certainly in UK.

NOTE: I invested in BP AFTER it got wrecked, as it was too oversold in my opinion, I see the floor of the stock price to be about 260p, I would add more under 300p and be confident of gains.

BONUS BP are anticipating next quarter results to not (on paper) be great purely due to other charges/payments needed for historic things, but last quarter already covered (and some) their buybacks/dividends for this quarter. I secretly think they will suprise again, and then in two quarters time short of big oil crisis there is going to start being serious cash towards end of year they they will need to distribute.

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Yeah I was thinking of bp too but the already large stack of long term debt and much more debt for the transformation to come is scaring me somewhat

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I’m not quite sure I would consider BP a green energy company?

Surely not a green company. A green company don’t pollute or at least don’t have such high carbon-footprint or spillovers that oil companies constantly have. It be will many decades to be consider as green energy company.

BP and other oil giants are trying to green-washing themselves (meaning, faking environment concerns and actions) for the general opinion. Also they have high ESG and reputational risks, political and legal risks, that can lower their profits. See the recent court ruling on Shell, the first legal action against an oil company about their emissions:

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I should have clarified better, ofc BP is not a green company. I was/am searching for well positioned legacy energy giants that can and will leverage their size and drilling know how (eg. for geothermal energy which has high upfront costs but some serious advantages to consider too)

Try looking at Equinor. They’re like BP and Shell in that they’re are predominantly still oil - but they’re much further down the line transitioning to more green energy. They’re majority owner by the Norwegian Crown (or was last I checked) and as I’m sure you’re aware is a hotbed for green energy transformation.

If not maybe Iberdrola. High quality and scale utility hyperfocused on green energy. This one is debt-laden, but doesn’t appear to be in any distress.

Still no? Try NextEra Energy, Dominion Energy NextEra Partners, Algonquin or one of the funding companies like Ameresco.

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Also BEP:

Brookfield Renewable Partners L.P. is the owner and operator of a portfolio of assets that generate electricity from renewable resources. The Company operates as a pure-play renewable power platform. Its segments include Hydroelectric, Wind, Solar, Storage & Other, and Corporate. It operates renewable power generating assets, which include conventional hydroelectric facilities and wind facilities located in North America, Colombia, Brazil and Europe. The Company’s portfolio consists of approximately 19,400 megawatts (MW) of capacity and 5, 274 generating facilities in North America, South America, Europe and Asia. It has over 18,000 MW renewable power generation development pipeline diversified across 27 markets in over 17 markets.

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And biomass (not green energy) are minor segments in renewable energy. Solar and Wind are the big gorillas in the green jungle.
Ironic is nuclear that is closing and in some countries is replaced by fossil fuel, like in Germany with natural gas. (I’m not defending nuclear, I’m not a fan of nuclear either.)

An article about the Big Oil that is under fire, including a curious story about Exxon, that 2 of its board directors were “kicked out” this week by activist investor. It’s seems that a Big Oil revolution is under way:

a humiliating loss for Exxon, the Western world’s biggest oil company, made worse by the fact that the the effort was championed by an activist with just a 0.02% stake.

Exxon, Chevron, Shell, BP Plc and Total SE together produce less than 15% of global crude supply.

https://www.bloomberg.com/news/articles/2021-05-27/big-oil-s-climate-change-takedown-arrives-with-stunning-rebukes

I think it is far from as clear cut as you make out - the likes of Shell, Total and BP know that fossil fuel days are numbered and are investing heavily in renewables in different ways. Total and BP are going for electricity production whereas Shell is focused more on being an intermediary.

If they meet their 5-10 year targets they will be larger in renewables than many renewable only companies.

The Big Oil is like a big cruiser ship or huge truck, they need a lot more time and space to stop or change route than the smaller companies.

One big problem they have is their legacy assets and liabilities (legal compensations due to the spillovers, cleaning of that, their extraction activities must be closed and leave no pollution trace on the environment). That companies are very capital intensive, they have a big debt burden. The assets are a big problem because they will have a lot stranded assets, that will be increasing harder to sell and less valued due to a lot of supply for sale and less demand to buy. Just see the coal mines example.

Curious the history of energy, a very repeating one, with whale oil replaced by coal, that was replaced by oil (& gas), that will replaced by xxxxx.