Why is TransAlta (RNW) stock dipping & what investors should do now?

3 min read | January 12, 2022 10:45 PM AEDT | By Raza Naqvi

Why is TransAlta (RNW) stock dipping & what investors should do now? — Image source: © Kadmy | Megapixl.com

What should investors do about TransAlta Renewables (TSX:RNW) stock?

Investors could wait and hold onto the RNW stock as stocks of renewable energy companies seem to have a high growth potential in future.

Canada is committed to fighting climate change and achieving net-zero emissions by 2050. This could mean that renewable energy companies could benefit from the government in the future.

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The RNW stock performance could make investors sceptical. However, holding the stock could be beneficial for shareholders.

TransAlta Renewables estimates that replacing all foundations could vary between C$ 75 million to C$ 100 million, and the facility will start generating revenue as wind turbines return to service individually.

Bottom line

In the third quarter results of last year, TransAlta Renewables had shown an impressive performance compared to the same quarter of 2020.

In Q3 2021, TransAlta's revenue jumped to C$ 114 million from C$ 95 million in Q3 2020. Meanwhile, the net earnings catapulted to C$ 20 million compared to C$ 6 million in the third quarter of 2020.

Also Read: 5 best Canadian utility stocks of 2021 under $100

TransAlta displayed a solid balance sheet and revealed that its cash flow from operating activities was C$ 83 million in Q3 2021.

TransAlta Renewables also acquired a 122 MW portfolio of solar facilities in North Carolina. Meanwhile, it also completed construction activities at Windrise.

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