If there are two sectors that stand to create a lot of wealth for investors over the next few decades, its tech stocks and climate stocks. So, that leaves climate tech stocks or “clean tech” as one of the best places investors can put their cash.
What is clean tech? It’s companies that are creating the technology necessary to create climate change solutions. So, it’s not just producing the renewable energy we need; it’s finding ways to create even more renewable energy options or to make existing ones work even better.
Today, we’re going to look at two climate tech stocks for investors to consider adding to their own watchlist on the TSX today.
Boralex
Boralex (TSX:BLX) is a strong choice if you’re looking for climate tech stocks that also provide renewable energy power. The company produces renewable energy from hydro power to solar power and everything in between. Furthermore, it develops and constructs new products as well.
Boralex stock is slated to be an outperformer even just this year. Shares of the stock still down about 17% in the last year, as of writing. Yet with more power production slated for the company, earnings are set to only increase. That’s despite missing earnings estimates the last few quarters, as costs continue to be high for those involved in renewable power production.
For now, however, analysts see this as a great opportunity for investors. While shares are down now, there is a 31% potential upside to reach the target price set by analysts as of writing. Meanwhile, it has a beta at 0.36, marking the stock as incredibly low in terms of volatility. It offers a 1.81% dividend yield and $168 million in free cash flow to work with. Finally, with shares up 242% in the last decade, this could certainly repeat itself in the next 10 years as well.
Capital Power
Another of the climate tech stocks that’s slated to be an outperformer is Capital Power (TSX:CPX). The company creates utility power facilities that include nuclear and other renewable power operations. However, the company is still involved with other methods of power production. This provides a nice transition for those wanting more stability upfront.
Analysts believe Capital Power stock is now positioned to greatly benefit from the decarbonization efforts put forth both on a federal and provincial level. Shares of the company are down about 5% in the last year. Yet this provides a strong risk versus reward for those wanting long-term gains.
Overall, however, Capital Power stock looks like a moderate buy based on analyst estimates. Shares have been up and down as of late. Yet this could mean it’s a great time to bring in its 5.4% dividend yield. With $263 million in free cash flow as well, it still has money left to keep investors and analysts coming back. And with the consensus price target at $51.85, that leaves a potential upside of 21% as of writing. Never mind the chance at another 108% in share growth, which investors have already seen in the last 10 years.
