Should you watch these TSX renewable energy stocks in 2023?

Highlights

• TransAlta Renewables increased its revenue to C$ 124 million in Q3’22 from C$ 114 million in Q3’21.
• For Q3’22, Northland generated C$ 556 million in sales compared to C$ 432 million from pcp.
• Brookfield Renewable witnessed revenue growth of US$ 966 million in Q3’21 to US$ 1,105 million n Q3’22.

The Canadian stock market is largely dominated by the energy sector, which includes publicly traded businesses in the fossil fuel industry. However, fossil fuels are frequently non-renewable and difficult to recover after use.

Having said that, a new, rapidly growing component of the energy sector known as renewable energy has emerged due to efforts to address the negative effects of fossil fuels on the environment and climate change in Canada.

Canadian renewable energy stocks pose as companies engaged in creating, marketing, or using clean or low-emission energy sources. These businesses offer a variety of energy sources, including but not limited to hydropower, wind, solar, biomass, and hydrogen, that are frequently regarded as cleaner and more sustainable.

In light of this, let's take a closer look at the financial results of three TSX-listed renewable energy companies:

TransAlta Renewables Inc. (TSX:RNW)

One of Canada's biggest publicly traded producers of renewable energy, TransAlta Renewables Inc. caters to an extensive portfolio of 26 wind, 11 hydroelectric, and eight natural gas generation facilities alongside other solar, natural gas, and battery storage projects.

This Canadian renewables energy company has paid a monthly cash dividend to its shareholders of C$ 0.078 per share, with an annualized dividend yield of 7.636 per cent.

While TransAlta Renewables mentioned growing its revenue to C$ 124 million in the third quarter of 2022 from C$ 114 million from the previous corresponding period (pcp), the production numbers stayed consistent with the same period in 2021.

The company’s other financials are summarized below:

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Northland Power Inc. (TSX:NPI)

Northland Power, a global power generator founded in 1987, intends to facilitate the transition to a sustainable energy future by producing electricity from clean, renewable resources. Northland develops, builds, and maintains infrastructure assets using various clean and green technologies across North America, Europe, Latin America, and Asia.

With a market cap of about C$ 9.2 billion, Northland Power has generated earnings per share (EPS) of C$ 2.79 for its shareholders.

For the third quarter of 2022, Northland improved its sales to C$ 556 million from C$ 432 million in Q3’21 and adjusted EBITDA to C$ 290 million in Q3’22 from C$ 211 million in the same period last year. Gross profit and net income, on the other hand, reached C$ 484 and C$ 76 million in the third quarter of fiscal 2022.

Brookfield Renewable Partners LP (TSX: BEP.UN)

Brookfield Renewable Partners LP is a pure-play renewable energy platform that runs wind, hydroelectric, utility-scale solar, and storage facilities in North and South America, Asia, and Europe. Brookfield Renewable is also the flagship renewable energy segment of Brookfield Asset Management, an investment management firm with more than US$ 750 billion in assets under management as of 2022.

The company has a market share of US$ 10.8 billion, with a quarterly cash dividend of US$ 0.32 per share and a dividend yield of 4.471 per cent.

Brookfield reported a 15 per cent increase (US$ 243 million) in its funds from operations (FFO) in the third quarter results of fiscal 2022 from Q3’21, with its hydroelectric segment contributing US$ 130 and another US$ 147 million by wind and solar segments.

Moreover, the company’s revenue for Q3’22 grew to US$ 1,105 million from US$ 966 million in the same period last year.

Bottom Line

Economic downturns and uncertainty have caused the stock market to continue showing volatility in 2023. Therefore, before investing in any stock, investors should exercise extreme caution.

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.