Innergex Stock

When discussing forms of renewable energies, investors most often think of sources like wind, solar, or hydrogen. Often overlooked is the hydroelectric sector of run-on-river plants that harness the energy of rushing water to create power. One of the leaders in this industry is a small Canadian firm called Innergex Renewable Energy Co. (TSE:INE), which is based out of Quebec and was founded back in 1990. Run-of-river plants are not as common as reservoir hydroelectric plants, but the former have some clear benefits including limited impact on the surrounding environments and less fossil fuel usage, as the plants harness the natural power of the rivers. One drawback is that run-of-river plants are unfirm sources of power, meaning there is no means of energy storage, rather they are utilized as energy sources instead.
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Taking a look at Innergex’s stock shows a similar broader head and shoulders pattern for the year that many renewable energy companies had. The excitement for this industry peaked in January when President Biden was sworn in as president, and brought with him a reformed vision for renewable energies leading the way in America. While most of Innergex’s business is done in Canada, it has established some operations in Idaho, so multinational expansion could be on the horizon as the global shift to clean energies continues to gain momentum.

Innergex Stock Analysis: Speaking of international expansion, Innergex confirmed in its recent quarterly earnings report that full commissioning for its wind farm in France was approved as of March 2021. Other projects in Chile, Hawaii, Ohio, and Texas are all under way as well, which shows some impressive growth opportunities in the coming years for Innergex. While run-of-river plants are Innergex’s most populous form of infrastructure, with 37 sites around the world, the company also operates 32 wind farms and 6 solar parks as well. In fact, an estimated 67% of its upcoming projects are wind powered, followed by 23% of them being solar.

Like with many companies that require manufacturing and infrastructure development, COVID-19 acted as a deterrent to the speed of growth that was anticipated. This was especially true in hard hit regions like Texas, France, and Ontario, but with vaccination measures economic reopenings, Innergex should be able to benefit moving forward. One problem that does threaten smaller energy companies is the potential for being acquired by bigger players in the game. Innergex’s niche portfolio of run-of-river plants may be an attractive selling point for a larger company to diversify its energy portfolio.

So how will Innergex perform as a long term investment? There are definitely positives for Innergex as a player in multiple different renewable energy sources. Canada is rich in natural resources as well as unused land for potential new sites. For long term investors Innergex also pays a dividend yield of 3.56% which is higher than other Canadian industry leaders like Brookfield Renewable Corporation (NYSE:BEPC) which only yields about 2.82%. What investors want to see with smaller, domestic energy companies is international growth and Innergex has shown plenty of it in recent years. At nearly 40% off its 52-week high price, Innergex makes for an attractive investment opportunity for investors bullish on green energies.

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