1 Up-and-Coming Stock You Can’t Ignore

Take a closer look at this new stock in a well-established market segment that could be an excellent investment for your portfolio.

| More on:

Equity markets are in a state of flux, as another year of investing begins. At writing, the S&P/TSX Composite Index is down by 2.18% from its all-time high on November 12, 2021. Despite the decline, Canadian equity markets posted terrific results throughout the year.

Canadian companies have become more aggressive in their growth strategies in recent years. The Canadian benchmark index is up by 22.15% year over year, reflecting that observation. The last few years have seen some of the largest firms across all industries in Canada raise monumental amounts of cash, complete ambitious acquisition deals, and launch innovative new products.

GFL Environmental (TSX:GFL)(NYSE:GFL) is one such Canadian growth stock that has been making new inroads, diversifying into the trillion-dollar renewable energy industry with its latest move.

GFL Environmental is one of the largest waste management companies and a rare competitor for Waste Connections. The company went public not too long ago, and its business has been soaring ever since. Now, the company’s management has shifted its focus to entering a massive and unsaturated industry through an interesting move.

Today, I will discuss GFL Environmental stock to help you see why this up-and-coming stock is something you simply cannot ignore.

A new renewable energy platform

After a stellar performance on the stock market since going public, GFL Environmental’s management decided to free up some cash. The company recently unloaded a few non-core assets to raise over $60 million to have the funds to deploy an innovative renewable energy platform. But how does it plan to enter a market already dominated by several well-established global entities and carve out a space of its own?

The answer has to do with what it already deals with: trash.

The company’s great plan is to generate renewable natural gas (RNG) using landfills. The company intends to start operations at a few of its landfills to test the waters before expanding the program to make it more profitable. GFL Environmental’s CEO, Patrick Dovigi, firmly believes that the new renewable energy platform could allow the company to generate over $100 million in free cash flow each year.

The global renewable energy industry is slated to grow by over $2 trillion in the coming decades. Entering the industry with a niche like this positions GFL Environmental well for immense long-term growth.

Foolish takeaway

At writing, GFL Environmental stock is trading for $47.81 per share, and it is up by almost 30% year over year. Experts estimate that the company’s new renewable energy venture could be worth $3 billion, and it opens up the doors for its entry into the trillion-dollar market.

The company’s management is confident that it can boost its cash flow through organic growth and the new renewable energy platform. Its price right now could be a bargain for investors who are willing to buy and hold the stock for the long run. It might be worth keeping a close eye on GFL Environmental stock if you don’t already have it in your portfolio today.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Energy Stocks

A worker overlooks an oil refinery plant.
Energy Stocks

Best Stock to Buy Right Now: Cenovus vs Baytex?

It may not seem like a good time to buy most energy stocks, but there are always exceptions.

Read more »

A bull and bear face off.
Energy Stocks

Dividend Investors: Top Canadian Energy Stocks for November

These three dividend-payers are on a bullish uptrend.

Read more »

analyze data
Energy Stocks

Buy 8,850 Shares of This Top Dividend Stock for $2,000/Month in Passive Income

Let's do the math on what it would take to generate $2,000 a month in passive income from Enbridge (TSX:ENB)…

Read more »

oil and gas pipeline
Energy Stocks

Is TC Energy Stock a Good Buy?

TC Energy stock has a lot going for it, but there are also a few red flags to consider before…

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Is Canadian Natural Resources Stock a Good Buy?

CNRL is an energy giant with a market capitalization near $100 billion.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Baytex Energy Stock a Good Buy?

Baytex Energy is a TSX stock that has massively underperformed the broader markets in the past decade, but it trades…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Suncor a Buy for its 4.2% Dividend?

Suncor Energy (TSX:SU) has a 4.2% yield. Is it a buy?

Read more »

engineer at wind farm
Energy Stocks

Energy Stocks to Buy Now: Top Picks for Canadian Investors

These companies have a solid business model and growing cash flows to support higher dividend payments and share prices.

Read more »