Top five renewable energy stocks on ASX

Summary

  • The contribution of renewable energy to the total energy mix is rising gradually.
  • The Paris Agreement on climate change has set a target to limit global warming to well below 20C compared to pre-industrial levels.
  • Several countries have set targets to cut their emissions by 50% or more by 2050.
  • Huge investments are flowing in R&D and technology for renewable energy sector.

The climate change issue has led to a global movement of reducing the carbon emission to such an extent that it limits the global warming below 20C compared to pre-industrial levels. Several countries including the EU nations, Australia, and New Zealand have committed to cut the emission by 50% by 2050. To reduce the emission levels, countries are increasing the share of renewable energy into their total energy basket and replacing the coal-based power plants with solar- or wind-based power plants.

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Good read: Is Solar and Wind Energy a threat to Crude oil industry?

In recent months, the sectors involved in green energy business have managed to garner increasing investors’ attention and have experienced significant upturn. For instance, most of the lithium producers and other battery material companies have given handsome returns to their shareholders. Green stocks are in demand now as besides giving significant returns to investors, they ae also saving the planet.

Here in this article, we have handpicked five companies that are engaged in renewable energy generation or transmission. Let us look at their performance and try to evaluate the current stock price according to market trends.   

Also read: Three unnoticed green stocks capable of fuelling go-green buzz

Meridian Energy Ltd (ASX:MEZ)

Meridian Energy Ltd is engaged in power production and distribution in New Zealand. It is one of the largest electricity producers with 100% of its electricity getting generated through renewable sources including wind, solar and hydro. Meridian accounts for nearly 30% of all electricity produced in New Zealand.

To support the country’s fight towards combating emissions, Meridian is working on launching a network of EV chargers throughout New Zealand. The Company also provides option to install chargers for private vehicles or a fleet.

To Know More, Do ReadClimate Change, Reduced Engine Cost, High Subsidy – Throttles The EV Industry

The share price of MEZ closed at AU$4.86 on 16 June 2021and its market cap is around AU$12.73 billion. The Company has paid a dividend of AU$0.051 per share. At the current share price, the dividend yield is around 3.14%. Also, MEZ made a 52-week high of AU$9.330 on 7 January this year.

Mercury NZ Ltd (ASX:MCY)

Mercury NZ Ltd is a dual-listed green energy producer in New Zealand. The Company generates its renewable electricity using hydro energy and geothermal energy. The Company is also moving into generation of power though wind and solar farms. The New Zealand government holds 51% shareholding in the Company.

Mercury paid a dividend of 62 cents per share in 2021 with an annual yield of 2.53%. MCY closed the day at AU$5.900 during the closing bell. As of 16 June 2021, MCY has a market cap of AU$8.36 billion.

Good read: Commodities Gaining Strength from the Green Energy Drive

Image source: Koszivu Megapixl.com

Contact Energy Ltd (ASX:CEN

Contact Energy operates five geothermal power stations in the Central North Island region in New Zealand. One more power plant – Tauhara geothermal station in Taupo region is under construction. The Company also operates power and gas transmission to homes and businesses.

Contact Energy has been voted the most trusted energy provider for 2021 in New Zealand. The Company has a diversified business portfolio which includes gas retailing, broadband services and electricity production, transmission and retailing.

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As of 16 June 2021, the shares of CEN closed the day’s trade at AU$7.690. The Company has paid dividend of AU$0.123 per share in March 2021. At the current share price, the dividend yield is around 4.18%. The Company has a market cap of AU$7.99 billion.

AusNet Services Ltd (ASX:AST)

AusNet Services is an Australian energy company, which owns and operates a Victorian electricity transmission network and a gas distribution network. The Company also provides a range of energy and infrastructure products and services to households, businesses, communities and government.

AusNet Services is 32.2%-owned by Singapore Power, 19.9%-owned by State Grid of China and the rest 47.9% is owned by public.

The shares of the AST closed the day’s trade at AU$1.845 and with a market cap of AU$6.95 billion as of 16 June 2021. The Company has announced an impressive dividend of 48 cents per share to be paid on 25 June 2021. At the current share price, the dividend yield is around 5.14%.

 Good read: China and Taiwan- The Emerging Catalyst In the Global LNG Demand Growth Curve

Spark Infrastructure Group (ASX:SKI)

Spark Infrastructure is an Aussie investment fund with major investment in energy infrastructure businesses in Australia.  The Group’s investee businesses serve nearly five million clients. The Group’s investments are in businesses, which have either been transitioned or are being pivoted to renewables.

The Group owns 49% stake in SA Power Networks, 49% in Citi Power and Powercor, 15% in Transgrid and 100% interest in the Bomen Solar Farm.

As of 16 June 2021, SKI was trading at AU$2.27 with a market cap of AU$3.91 billion. The Company has paid a dividend 6.5 cents per share to its shareholders. At the current share price, the dividend yield is around of 5.94%.

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