Ten Clean Energy Stocks For 2018: First Half Update

Brookfield Renewable Partners, LP (NYSE:BEP)
12/31/17 Price: $34.91. Annual Dividend: $1.872(5.4%). Expected 2018 dividend: $2.02(5.8%). Low Target: $28.  High Target: $45.  
6/30/18 Price: $30.33 YTD dividend: $0.98 (2.81%) YTD Total Return: -11.2%

Brookfield Renewable Partners was up in May but down in June for a mostly flat 2 months. Although one press release proved to be significant for Terraform Power, there was little to move BEP’s own stock.

Green Plains Partners, LP (NASD: GPP)
12/31/17 Price: $18.70. Annual Dividend: $1.84(9.8%). Expected 2018 dividend: $1.90(10.2%). Low Target: $13.  High Target: $27.  
6/30/18 Price: $17.15 YTD dividend: $0.945 (5.05%) YTD Total Return: -3.3%

Ethanol MLP and Yieldco Green Plains Partners reported first quarter results on May 7th. Ethanol volumes were down due to market conditions which led GPP’s parent, GPRE to process less ethanol thought GPP’s facilities. This reduction in volume was partially offset by a small contractual payment from GPRE designed to partially make up for the lost revenue in periods of low volume.

Although GPP gave all its distributable cash flow to shareholders in the first quarter, it nevertheless increased its distribution for future quarters by half a cent to $0.475 per unit. The partnership can likely afford this increase because results are often seasonally low in the first quarter, and rising gas prices will lead to higher volumes and improved profitability. Further, GPP began operation an ethanol train terminal in Little Rock, AR as part of a partnership and is investing in further ethanol distribution facilities as part of this same partnership.

Although new investments, seasonal changes, and improved market conditions for ethanol should support the slightly increased dividend, I expect future dividend increases to be similarly modest for the next year or more, while the partnership works to reduce its payout ratio. While the almost 11% current yield is quite attractive, investors should not be expecting much in the way of capital gains on top of that, especially given the Trump administration’s efforts to undermine the Renewable Fuel Standard which I discussed in May.

InfraREIT, Inc. (NYSE: HIFR)
12/31/17 Price: $18.58.  Annual Dividend: $1.00(5.4%). Expected 2018 dividend: $1.00 (5.4%).  Low Target: $16.  High Target: $30.  
6/30/18 Price: $22.17 YTD dividend: $0.50 (2.69%)  YTD Total Return: 22.2%  

Electricity transmission REIT InfraREIT added somewhat to its gains in June. Without any significant news, I think the move may simply be a flight to safety by income investors looking for stocks without significant international exposure.

Enviva Partners, LP. (NYSE:EVA)
12/31/17 Price: $27.65.  Annual Dividend: $2.46(8.9%). Expected 2018 dividend: $2.65 (9.6%).  Low Target: $25.  High Target: $40.  
6/30/18 Price: $29.10 YTD dividend: $1.245 (4.5%)  YTD Total Return: 9.9%  

Wood pellet Yieldco and Master Limited Partnership Enviva jumped strongly in May after giving some of those gains back in June. The company announced that its Chesapeake wood pellet export terminal returned to full operation on June 28th after a fire in the first quarter. The partnership expects that all the related costs of the fire will be recovered from insurance and that all its contractual obligations for deliveries can be met.

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Disclosure: Long PEGI, NYLD/A, CVA, AY, SSW, SSW-PRG, TERP, BEP, EVA, HIFR, GPP.

Disclaimer: Past performance is not a guarantee or a reliable indicator of future ...

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