3 Stocks Powering the Green Economy

Three Canadian stocks that power the green economy and commit to a net zero world should attract more ESG investors.

| More on:

The global economy is taking action to protect the planet by moving toward a net-zero world. Canada is one of the world’s largest oil and natural gas producers but is advancing climate action. The federal government aims for a 40% to 45% reduction in emissions by 2030 and to reach net zero by 2050.

Publicly listed companies in the clean technology or renewable energy space also appear on responsible investors’ radars. Three stocks powering the green economy include Cenovus Energy (TSX:CVE), 5N Plus (TSX:VNP), and Exro Technologies (TSX:EXRO).

Carbon capture and storage

Cenovus Energy has a three-phased plan to invest in and implement emissions-reducing technologies like carbon capture and storage (CCS). The $48.9 billion integrated energy company is also a founding member of Pathways Alliance, composed of oil sands producers.

Management aims to reduce absolute greenhouse gas (GHG) emissions by 35% by year-end 2035. Cenovus is currently operating two carbon capture projects. The Lloydminster Ethanol Plant, a fuel-grade ethanol producer, can capture approximately 80,000 tonnes of CO2e annually on average.

The Pikes Peak South project, a partnership with Svante, tests new carbon capture technology. It can capture nearly 9,000 tonnes of CO2e per year. Cenovus has three other carbon capture technology projects underway. In Q2 2023, net earnings and free funds flow rose 36% and 205% year over year to $866 million and $897 million, respectively.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Cenovus Energy made the list!

Cenovus targets returning 50% of excess free funds flow to shareholders for quarters in which the ending net debt is between $9 billion and $4 billion. At $25.80 per share, the energy stock pays a 2.19% dividend.

Renewable energy equipment

5N Plus is one of the steady performers in the basic materials sector thus far in 2023. At $3.58 per share, the year-to-date gain is 23%. The TMX Group lists the stock in the renewable energy equipment manufacturing and technology sub-sector.

The $316.7 million company uses proprietary and proven technologies to develop and manufacture specialty semiconductors and performance materials. Vital industries like aerospace, health and pharmaceutical, industrial materials, and renewable energy use the products.

5N Plus operates R&D, manufacturing, and commercial centres on three continents (North America, Europe, and Asia). Its wholly owned subsidiary, AZUR SPACE Solar Power, boasts solar cell technology that powers all aspects of the travel, landing, and exploration in space missions.

Low-impact material and products

Exro Technologies develops new generation power control electronics that expand the capabilities of electric motors and batteries. The $323.8 million clean technology company’s two innovative technologies are helping to accelerate the adoption of a circular, electrified economy.

Coil Driver bridges the performance-cost gap in e-mobility, while Cell Driver is for stationary energy storage. Its CEO, Sue Ozdemir, said, “Exro delivers real-world solutions that change how the world consumes energy. Our patented technology will provide commercial and industrial applications with high-quality, safe, and reliable energy while alleviating stress on existing grid infrastructure.”

Exro trades at $1.92 per share, and market analysts forecast a return potential of 62.5% ($3.12) in 12 months.

Breakout soon

The global transition to a zero-emission economy is progressing. With many investors going green, expect stocks of companies that commit to net zero, like Cenovus Energy, to break out soon.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends TMX Group. The Motley Fool has a disclosure policy.

More on Energy Stocks

Pumpjack in Alberta Canada
Energy Stocks

1 Magnificent Energy Stock Down 17% to Buy and Hold Forever

Down over 17% from all-time highs, Headwater Exploration is a TSX energy stock that offers you a tasty dividend yield…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Cenovus Energy Stock a Good Buy?

Cenovus Energy (TSX:CVE) stock is primed for capital gains and strong total returns in 2025, driven by strategic buybacks and…

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

2 High-Yield Dividend Stocks That are Screaming Buys Right Now

Natural gas stocks like Peyto Exploration and Development are yielding above 7% today and look undervalued as natural gas strengthens.

Read more »

chart reflected in eyeglass lenses
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Cenovus?

Want to invest in Canadian energy? Canadian Natural Resources and Cenovus Energy are two of the largest, but which one…

Read more »

oil pump jack under night sky
Energy Stocks

Where Will Cenovus Stock Be in 1/3/5 Years? 

Let's dive into whether Cenovus (TSX:CVE) stock is worth buying right now and where this stock could be headed over…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Suncor?

These energy giants are returning significant cash to shareholders.

Read more »

how to save money
Energy Stocks

This 7.8% Dividend Stock Pays Cash Every Month

This monthly dividend stock is an ideal option, with a strong base, growing operations, and a strong future outlook.

Read more »

data analyze research
Energy Stocks

The Smartest Dividend Stocks to Buy With $2,000 Right Now

Dividend stocks like Canadian Natural Resources (TSX:CNQ) can amplify your wealth.

Read more »