Not all of us can lease our wind rights to utilities. Clean energy stocks, though, can be the next best thing. As long as the sun shines and the wind blows, you make money. And because ongoing costs are only a fraction of sales, they throw off a lot of income. Of course, Wall Street can always mess up a simple formula. The sector fell out of favor last year. Many firms got in over their heads with debt trying to squeeze out a little extra return. The worst, however, seems to be over. Much of the silliness has been wrung out of the industry. And for those willing to comb through the rubble, you can pick up some great assets for pennies on the dollar. Here are three clean energy stocks to look into further.
Nextera Energy Partners LP (NYSE:NEP) resembles an “equity bond.” The partnership owns clean energy projects across the country, like wind farms and solar plants. And because the firm locked in customers through long-term contracts, you have highly predictable cash flows. Most of this cash gets returned to owners. Today, NextEra pays a quarterly distribution of $0.36 per unit, which translates into an annual yield of 4.3%. That payout should grow over time as the partnership builds out its portfolio. Executives project the dividend will grow at a 12% to 15% annual clip through 2022. (Source: “Earnings Conference Call: Fourth Quarter and Full Year 2016,” Nextera Energy Partners LP, January 27, 2017.)
Source: Income Investor
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