Canadian investors looking to create income over the long term should consider slowly but surely getting away from oil and gas stocks. This is not to say, however, that energy stocks, in general, wouldn’t be good investments. Today we’re going to look at three energy stocks that certainly are worth your while. So, without further ado, let’s get into them.
Northland Power
Northland Power (TSX:NPI) went through a downward spiral in 2023, and investors were certainly concerned about the company’s future growth prospects. However, analysts now believe the company is set to outperform, and the stock looks quite undervalued.
Project delays made by rising costs, price caps in European markets, and equity dilution to create growth after bad weather were all key issues, according to one analyst. Yet this has pushed the shares of this company to a point that analysts believe is rock bottom, which is why it’s the best time to jump back in.
As the growth outlook continues to improve, there should be a return to growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) as well. And that should continue for at least the next three years! So, certainly consider this monthly dividend payer, currently with a yield at 4.77% and trading at 15.88 times earnings.
Brookfield Renewable
While the immediate outlook has been cut back a bit for Brookfield Renewable Partners (TSX:BEP.UN), this stock should still outperform in 2024. Again, we’re seeing strong buy recommendations from analysts as the company continues to trade in value territory.
In particular, the higher rate environment continues to weigh on companies like BEP stock. But unlike those companies, BEP stock can actually use this higher rate environment to its advantage. The company has access to large amounts of capital, allowing it to seize some attractive growth opportunities while they remain attractively priced.
Furthermore, BEP stock has 150 gigawatts (GW) in its development pipeline, along with 18 GW of renewable projects coming online in the next three years. Therefore, the company looks certain to increase its funds from operations, achieving around 10% per unit annually! And with a 5.05% dividend yield, it’s certainly another of these energy stocks to consider.
Hydro One
Another area hit by the increase in interest rates these days has been utilities, and Hydro One (TSX:H) has been no exception. However, this company continues to trade at valuable levels, despite seeing shares rise higher and higher in the last year or so.
Part of that climb has come from its secure status as receiving its power from hydroelectricity sources rather than natural gas or other means. It’s also secured by investment from the province of Ontario, powering the majority of homes in the province.
As the company continues to expand, investors should continue to see shares rise as well. This is why it’s another of the great energy stocks that investors should consider these days, especially as it offers a 3.04% dividend yield as of writing — something investors will certainly be happy to hold not just now but for years to come.
