Three ASX electricity stocks to watch out for in 2022

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Three ASX electricity stocks to watch out for in 2022

 Three ASX electricity stocks to watch out for in 2022
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Highlights

  • In 2019-2020, Australia saw a record electricity generation of around 265 TWh.
  • More than one-third of electricity in Australia is still being generated through fossil fuels.
  • AGL, NEW and GNX are some of the electricity shares investors are watching out for 2022.

Electricity generation in Australia is on the rise. According to the Australian government’s Department of Industry, Sciences, Energy and Resources, the year 2019-2020 saw the electricity generation of around 265 TWh, which is the highest on record.  

An electric bulb

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However, despite more than one-third of electricity in Australia being generated through fossil fuels, the majority being from coal, new renewable sources have outpaced conventional sources in last few years. Whichever sources are being used, the rise in electricity consumption is luring investors and prominent electricity providers in Australia. Let us have a look at three ASX electricity shares that are on investors’ radar for 2022.

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  1. AGL Energy Limited (ASX:AGL)

AGL Energy is involved in the generation and retailing of electricity in Australia, catering to both residential and commercial use. This 180-year-old company is gradually flexing its muscles into the clean energy sector for a more sustainable and carbon-neutral future. The company has a market capitalisation of AU$1.04 billion.

The AGL share price has fallen quite a bit last year, delivering a negative 47.4% in 2021. However, this fall has also bumped up dividend yield to an eye-catchy 12.21%. In CY21, the company delivered a total dividend of AU$0.75 per share.

  1. New Energy Solar Limited (ASX:NEW)

New Energy Solar is an electric power-generation company, having a market capitalisation of AU$262 million. It acquires and owns large-scale solar electricity generation facilities. It has an elaborative pipeline of opportunities in Australia and the US. Apart from solar investments, the company is also open to investments in hybrid solutions, wind and geothermal projects, etc.

New shares have fallen 9.4% in 2021, allowing the shares to trade at a lucrative dividend yield of 9.63%. The company declared a dividend of AU$0.06 per share in CY21.

  1. Genex Power Limited (ASX:GNX)

The last name on the list, Genex Power, is also focused on developing renewable sources of energy and storage projects across Australia. The company’s portfolio of renewable energy currently produces 100MW of electricity while the development for 250MW is under construction.

The company has a market capitalisation of AU$213.9 million and its share price has delivered a negative return of 10.04% in 2021.

Bottom Line

Although electricity consumption is on the rise in Australia, and country’s commitment to minimise carbon footprints might benefit renewable energy stocks over conventional fossil fuels usage. Investors need to do their own due diligence before investing in any stock.

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