Renewable energy stocks that pay a dividend have been hit or miss for investors in the last few years. Many renewable energy asset owners haven’t performed as well as expected because they lacked a pipeline of projects that would keep the dividend growing year after year, leading them to sell their businesses to large investors.
Ironically, the renewable energy asset owners that remain are in a better position than their predecessors because they have a smaller pool of competitors looking to buy projects and a project pipeline strategy that has worked for years. Today, the three renewable energy dividends that I think are still worth owning are from NextEra Energy Partners (NYSE:NEP), Hannon Armstrong (NYSE:HASI), and Brookfield Renewable Partners (NYSE:BEP).
Renewable energy from a utility giant
NextEra Energy Partners has defied the odds in renewable energy in large part because of its affiliation with NextEra Energy (NYSE:NEE), the traditional utility giant. On its own, NextEra Energy Partners owns 5,330 megawatts (MW) of wind and solar power plants (plus a few pipelines) that have an average remaining contract life of 16 years and decades of usable life after that. This ensures cash flow long term, but contracted cash flow alone hasn’t been enough to keep all renewable energy asset owners afloat.
What differentiates this company is having NextEra Energy as a sponsor that comes with a pipeline of 11,500 MW to 18,500 MW of new solar, wind, and energy storage projects between 2019 and 2022. This pipeline can then be dropped down to NextEra Energy Partners, which keeps…
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