5 Canadian stocks to watch after fall economic statement

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 5 Canadian stocks to watch after fall economic statement
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Highlights

  • In Q2 2022, Boralex Inc. reported net earnings of C$ 14 million.
  • In Q2 2022, the total revenue of Ballard Power was reported at US$ 20.9 million with a YoY decrease of 16 per cent.
  • In Q2 2022, Xebec’s net debt declined to C$ 37.8 million from C$ 43.4 million in year-ago quarter.

Amid rising pollution levels, economies are striving to move towards greener solutions globally. This has led to a spurt in clean energy stocks over the last few years.  

Meanwhile, Finance Minister Chrystia Freeland, announced that Canada will be introducing refundable tax credits for investors in battery storage, net-zero technologies, and clean hydrogen. The tax credits will be worth up to 30% of investment costs.

Further, she also mentioned launching of growth fund by the year-end with a capitalization of C$ 15 billion. This fund will facilitate the investors to mitigate the risks of their investments in new technologies and infrastructure.

As an investor, ensure to understand the present technicalities of the sector along with the past performances. Moreover, look for external factors that have the potential to impact the stocks in the long run.

There may be certain challenges while selecting your stocks but look for broader perspectives and opportunities at the right time.

Here, we look at five clean energy stocks with their recent financial highlights:

  1. Boralex Inc. (TSX: BLX)

Boralex is a power producer with its operations based in Canada. It is engaged in developing renewable energy power. Further, it operates in the US, the UK, and France. Boralex has power generation assets across four segments-thermal, wind, hydroelectric and solar.

In Q2 2022, the operating income of Boralex increased by 89 per cent to C$ 45 million from C$ 24 million in Q2 2021. The EBITDA also rose to C$ 121 million from C$ 106 million for the same comparative period. Boralex reported net earnings of C$ 14 million versus a net loss of C$ 12 million. The cash flow from operations too grew to C$ 86 million compared to C$ 66 million.

As of June 30, 2022, the cash and cash equivalents soared to C$ 701 million compared to C$ 256 million on December 31, 2021.

Boralex pays C$ 0.165 per share as a quarterly dividend to its shareholders. The dividend yield of the company is 1.716 per cent with five-year dividend growth of 3.62 per cent.

On July 4, 2022, Boralex announced the acquisition of Infinergy’s interests.

  1. Ballard Power Systems Inc. (TSX: BLDP)

Ballard is engaged in proton exchange membrane fuel cell. Further, it is into commercialization and, power system development. The company is primarily into the sales and service, development, manufacturing, and designing of PEM fuel cell products for different applications. Ballard also focuses on material handling, heavy-duty motive, and stationary power generation.

In Q2 2022, the total revenue of Ballard Power was reported at US$ 20.9 million with a year-over-year (YoY) decrease of 16 per cent in a year-ago quarter. The total operating expenses and Cash Operating Costs increased to US$ 38.5 million and US$ 32 .1 million respectively, for the same comparative period.

There was a decrease in the cash reserves of the company which was reported at US$ 1,004.6 million compared to US$ 1,246.8 million.

  1. Polaris Renewable Energy Inc. (TSX: PIF)

Polaris Infrastructure Inc. deals in hydroelectric and geothermal projects and is involved in its development, exploration, and acquisition.

As of September 30, 2022, the total revenue for Polaris witnessed a decrease which was reported at US$ 14.5 million versus US$ 14.8 million in the year-ago quarter. The adjusted EBITDA was noted at US$ 10 million compared to US$ 10.9 million.

The total assets of Polaris Infrastructure grew to US$ 5,093.4 million from US$ 4,870.3 million. The total liabilities increased too and were reported at US$ 4,062 million compared to US$ 3,645.1 million.

Polaris announced dividend of US$ 0.15 per share to its shareholders on a quarterly basis. The dividend yield of the company is 5.054 per cent.

  1. Xebec Adsorption Inc. (TSX: XBC)

Xebec Adsorption Inc. deals in compressed air and gases equipment. It is engaged in engineering and designing the equipments required in filtration, dehydration, separation, and purification. The portfolio of the company includes biogas purification, engineering services, air dryers, and compressed gas filtration.

In Q2 2022, the revenue for Xebec was recorded at C$ 44.5 million versus to C$ 32.7 million in Q2 2021. Xebec’s net debt declined to C$ 37.8 million from C$ 43.4 million for the same period. The adjusted EBITDA loss rose to C$ 12 million from C$ 5.2 million.

  1. Loop Energy Inc. (TSX: LPEN)

Loop Energy Inc. deals in hydrogen fuel cells and is engaged in its manufacturing, supplying, and developing. It supplies these fuel cells to power manufacturers. There are two products in the company’s portfolio- fuel cell stacks and fuel cell modules.

In Q3 2022, the revenues of the company were noted at C$ 1.4 million. The net loss for Loop Energy increased to C$ 9.8 million from C$ 6.5 million for the same comparative period. The cash and cash equivalents also fell to C$ 36.94 million from C$ 77.81 million.

The below graph shows the changes in the total assets of Loop Energy Inc. between two time periods.

Bottom Line

The world is moving towards net-zero emissions and sustainable energy. This has made investors alert and conscious too. The dependence on clean energy is a factor of consideration while selecting your stocks. The companies are finding their ways to keep up to the changing trends.

Whenever you are selecting your energy stocks, go beyond the parameter of financials and ratios.

In the long run, the energy stocks may be dependent on such factors for their growth. Along with this, add on the diversification factor to your portfolio as it is a dynamic world to operate in. Tapping on to a variety may help you to reduce the risk that you may be exposed to in the future.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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