Energy stocks will likely always be needed. In fact, we can pretty much guarantee it. We need energy for our homes, our cars, our infrastructure, our very way of life. But there is certainly a shift among energy stocks.
While oil and gas has powered our lives over the last 100 years, it looks like the next 100 could be very different. That’s because the world is shifting towards cleaner ways of producing energy. In fact, Allied Market Research found that the global renewable energy market is expected to increase from US$881.7 billion in 2020 to US$2 trillion by 2030. That marks a compound annual growth rate (CAGR) of 8.4%!
So let’s get in on the action. If you’re wanting in on energy stocks, these are the sectors to consider.
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Utilities
First up we have the old faithfuls. While the world has mainly relied on oil and gas for power, utilities have still found a place to gain traction. In fact, utilities provide stable growth opportunities as well. These companies run no matter what happens in the market. We need the lights on, and hydro and other forms of utility production are there to power us.
Among the stocks to consider, I would look at Canadian Utilities (TSX:CU) and Hydro One (TSX:H). Canadian Utilities stock has been around for decades, growing its dividend each year for the last 50 years! More than any other on the market. It continues to expand through acquisitions and by shifting more towards renewable energy use.
Then we have Hydro One stock. While it’s a baby on the market in terms of years available, it has so much room to grow. Especially as it’s backed by the Ontario government, which holds a major stake. The company provides hydro to the most populated province in Canada, making it a solid buy for investors.
Both stocks also have solid dividend yields to provide passive income! So definitely look at these when considering energy stocks.
Diverse renewable energy stock
Then there are companies that invest in diversified renewable energy assets. These are companies that don’t just stick to wind or solar for power. They look into it all. Because of this, these companies are well-suited towards the future of renewable energy, providing power by any means necessary.
Two I would consider these days are Brookfield Renewable Partners LP (TSX:BEP.UN) and Boralex (TSX:BLX). These energy stocks both have decades of experience in the sector, with the growth to prove their worth.
BEP stock has been on the market for about 20 years, but is backed by a parent company that’s been invested in renewable energy for over a century! Meanwhile, it has expanded today to invest in every type of renewable energy asset, in practically every country out there. As it continues to expand, it’s creating even more opportunities for investors.
Boralex stock is also a strong buy, according to analysts. It develops, constructs, and operates renewable energy facilities mainly in the United States, United Kingdom, and Canada. The company produces major power in these areas, and again continues to expand its offers to provide even more growth opportunities.
And as with these stocks, you can also grab onto a dividend while you wait for a recovery among energy stocks. One that likely won’t come for the oil and gas industry.
