1 Undervalued Dividend Stock With High Green Energy Growth

Polaris Infrastructure Inc (TSX:PIF), an undervalued Canadian dividend stock in the high-growth green energy industry, yields 6.46% annually on dividends alone.

| More on:

This undervalued Canadian dividend stock in the quickly growing renewable energy sector is giving shareholders a dividend yield of 6.46%. Renewable energy is set up to be huge globally, with growth outpacing that of the traditional energy sector substantially. Headquartered in Toronto, Canada, Polaris Infrastructure (TSX:PIF) operates renewable energy projects in Central and South America, including geothermal and hydroelectric technologies.

Central and South America pose even higher growth projections for renewable energy utilities like Polaris due to higher economic growth. Developing countries typically have more significant untapped market opportunities than advanced economies, from which Polaris can benefit to give shareholders additional returns.

Canadian investors should look for stocks in high-growth export markets like green energy. Shares in the renewable energy industry are the perfect long-term investment for Tax-Free Savings Accounts and Registered Retirement Savings Plans. In 20 years, these stocks will prove themselves to be secure energy assets to protect your peace of mind during retirement.

Two of Polaris Infrastructure’s most notable projects include Polaris Energy Nicaragua and Polaris Energy Perú.

Polaris Energy Nicaragua

Polaris Energy Nicaragua operates a geothermal power plant with an installed capacity of 77 MW (72 MW net). As one of the largest generators of renewable energy in Nicaragua, Polaris possesses significant market power in a quickly growing economy. As an undeveloped nation, many households still lack access to electricity, meaning market opportunity exists in Nicaragua that wouldn’t otherwise be available in Canada.

Further, as a country heavily dependent on oil imports, the Nicaraguan government under the sitting president, Daniel Ortega, has established goals to convert 90% of the electric grid to renewable sources by next year. Nicaragua needs Polaris to achieve these ambitious renewable energy goals and galvanize economic growth.

Polaris Energy Perú

Canadian shareholders will want to keep an eye on Polaris Energy Perú, as it has multiple projects scheduled to come online before the start of 2020. The added revenue growth from these ventures should give the stock price a boost in the next few earnings cycles.

Perú is a specifically exciting growth market with very stable economic prospects compared to some Latin American countries, which have experienced political instability the past year. Renewable energy projects in this country face substantially less exposure to risk than those in Nicaragua. The new projects then diversify the risk profile of Polaris investments in Latin America without sacrificing growth.

Foolish takeaway

Aspiring Canadian retirees have many options at their disposal to build an excellent retirement portfolio. No Canadian should buy into fear-inducing headlines about how out-of-reach retirement is for most citizens. Every Canadian can retire wealthy if they know how to invest wisely.

The trick is to look for stocks like Polaris Energy and practice investing and forgetting. The number one mistake investors make is taking a short-term outlook on their investments. Your assets are bound to rise and fall in value over the years. If you allow anxiety to control your investment decisions, you may sell low instead of waiting out the rough waters until demand is higher.

The best strategy you can develop when planning your retirement is a long-term view. Don’t get too caught up on overdramatized headlines about earnings misses and market crashes. Find industries and corporations you can trust for the next 20 years and buy to hold forever.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Debra Ray has no position in any of the stocks mentioned. The Motley Fool owns shares of Polaris Infrastructure Inc.

More on Dividend Stocks

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »