Enviva: Wood Pellets Into Dividends
by Debra Fiakas CFA Last week Enviva Partners, LP (EVA: NYSE) reported financial performance for its wood pellets business in its quarter ending September 2015. Sales totaled a whopping $116.6 million, representing a 53% increase compared to $40.5 million in the same quarter last year. The big jump in revenue resulted from higher volumes to larger customers. Distributable cash flow totaled $12.6 million compared to $8.2 million in the year ago period. Quarter performance made possible a declared cash distribution of $0.44 per common unit, which is 7% higher than the minimum quarterly distribution. At its...
Five Green Dividend Stocks to Watch
Tom Konrad CFA The Perfect Stock My ideal stock is: Green (in that the company is helping to make the economy more sustainable) Pays a good dividend (in the current low-interest rate environment, I consider 4% to be “good”) Has earnings and free cash flow large enough to easily sustain the dividend, and Has low debt, leading to low earnings and cash flow volatility. I like such stocks because I can buy them, and pretty much ignore them. This leaves me time to research more speculative green stocks, while still knowing that much of my portfolio is producing...
Second Largest Quarter For Green Bonds Ever
Third quarter reflects strong growth and new market entrants
Overview
The green bond market has kept its strong pace in Quarter 3 2017, reaching a total of USD27.7bn from July to September.
On September 28th, the total amount of green bonds issued in 2017 ytd (USD83.2bn) overtook last year’s total issuance of USD81.6bn.
We covered the big moment in our Blog Post here.
Lots of new issuers
The top sources of issuance were:
Mexico - USD4bn
China - USD3.9bn
France - USD3.3bn
U.S. - USD2.8bn
India - USD1.9bn
Mexico was a surprising addition to the number one spot, after issuing no green bonds in Q1 or Q2 this year.
Big...
List of High Yield Alternative Energy Stocks
This is a list of renewable and alternative energy stocks with dividend or distribution yields above 4%. The list includes most Yieldcos (high distribution companies that own renewable energy operations), but is not limited to Yieldcos. Some Yieldcos may be excluded if their yield is below 4%.
Atlantica Yield plc (AY)
Algonquin Power & Utilities Corp. (AQN, AQN.TO)
Bluefield Solar Income Fund Ltd. (BSIF.L)
Brookfield Renewable Partners L.P. (BEP)
Clearway Energy, Inc. (CWEN,CWEN-A)
Companhia Energética de Minas Gerais (CIG)
Covanta Holding Corporation (CVA)
Crius Energy Trust (KWH-UN.TO, CRIUF)
Enviva Partners, LP (EVA)
Foresight Solar Fund plc (FSFL.L)
GATX Corporation Series A (GMTA)
Global X YieldCo ETF (YLCO)
Greencoat UK Wind PLC (UKW.L)
Green...
US Yieldcos Will Survive
by Susan Kraemer As unrealistic expectations of dividend growth are scaled back, yieldcos are now on a more sustainable path. Weaknesses in the US yieldco model came into sharp relief this summer as share prices fell along with oil and gas stocks. This was in part due to investor confusion about energy stocks but also in response to a flaw in US yieldco expectations. Manager of the Green Global Equity Income Portfolio and AltEnergyStocks.com editor Tom Konrad Ph.D., CFA had warned of the looming potential for exactly this kind of market correction in a conversation a...
Comparing Community Solar Subscriptions And Yieldcos
By Tom Konrad, Ph.D. CFA Community solar is gaining traction in many states. The concept, also known as shared solar or solar gardens, originated in the mid-2000s as a way to allow broader participation in the ownership of solar photovoltaic (PV) systems, while also encouraging local development. Community solar broadens access to solar beyond homeowners with suitable roofs. A National Renewable Energy Laboratory report from 2015 estimated that 49 percent of households cannot own solar because they do not own their own home, or they live in high-rise buildings with insufficient roof space. Rooftop solar is impractical for many...
Capstone Infrastructure: Green Income At A Cardinal Discount
Tom Konrad CFA Capstone Infrastructure Corp.'s Gas Cogeneration facility in Cardinal, Ontario. Capstone Infrastructure Corporation (TSX:CSE, OTC:MCQPF. Disclosure: I own this stock) is an international operator and developer of green infrastructure assets and utilities which is currently selling at a significant discount to most comparable firms. I recently ran a comparison of six similar Canada-listed firms, and Capstone seemed much cheaper on several measures. The Discount The following chart compares five renewable energy and green infrastructure firms with most of their operations in Canada: Capstone, Algonquin Power and Utilities (TSX:AQN, OTC:AQUNF), Brookfield Renewable Energy Partners (NYSE:BEP),...
The True Story of Clean Renewable Energy Bonds
Sean Kidney Where did all the CREBs and QCEBs go? Mystery solved. The US has for a long time used tax credits to promote the development of oil and gas and other industries. With tax credits the bond issuer still pays a coupon, but their payment is subsidized, effectively lowering the rate of interest paid. The Obama administration brought in a big program of credits for renewable energy bonds. The plan was that States, large local governments, tribal governments and public power bodies would issue bonds to finance energy efficiency or renewable energy. The US ...
Toyota’s Asset Backed Green Bond: This Is Big
Sean Kidney Toyota Motor Corp. (NYSE:TM) will close mid-next week on what will be the world’s first green bond backed by auto loans – electric vehicle and hybrid car loans to be specific. And what a kickstart for that market, at $1.75 billion. According to a report in International Financing Review (IFR), the bond will be in multiple tranches, each at a different ratings level: A2 tranche, A3 and A4 (Moody’s ratings). First thing to know: they told the media a week ago it would be a US$774.675 million bond. Rumour has it that initial investor interest...
Why This German Solar Executive Is Skeptical About American YieldCo Assumptions
by Tom Konrad CFA Ever since the first YieldCo, NRG Yield (NYSE:NYLD), went public in 2013, it and other similar YieldCos have been reshaping the market for operating renewable energy assets, especially wind and solar PV farms. A YieldCo is, to put it simply, a publicly traded subsidiary of a developer and operator of clean energy farms that uses the cash flow from its assets to return a high current dividend to shareholders. Most large, publicly traded clean energy developers have already launched or are preparing to launch a YieldCo. The current crop includes NRG Yield, Pattern...
Is Suzlon’s $650m Wind Bond the First of Many?
India had been trying to get a corporate bond market going for 15 years – search “growing India corporate bonds” and you’ll find papers on the subject from the Reserve Bank of India, Bank of International Settlement and others scattered over past years. The latest Indian 5 year plan has this as a priority – and has green finance as a priority in a separate section. India has a particular need: a miniscule local corporate bond market means restricted financing options for business, including for renewable and energy efficient building developers – diversity with financing options helps drive down costs...
Will Investors Flock to SunEdison’s Emerging-Market YieldCo?
by Tom Konrad CFA SunEdison is proposing something entirely new: a YieldCo with a focus on projects in Africa and Asia, but it's a long way between an S-1 filing with the SEC and and IPO. The June launch of SunEdison's (SUNE) first YieldCo, TerraForm Power (NASD:TERP), transformed the parent company's prospects. Now it wants to repeat the performance with a first-of-its kind YieldCo that will focus on investment in Africa and Asia. A YieldCo is a publicly traded company that is formed to own operating clean energy assets that produce a steady cash flow,...
Why is Terraform Power Trading at a Premium to the Brookfield Renewable Merger Value?
Tom Konrad, Ph.D., CFA
A reader asked:
Read your recent article on Pattern Energy (PEGI). Great summary and thoughts.
Would like to ask your view on TERP potential takeover by BEP (via shares swap) and whether you reckon the recent run-up on TERP is too excessive?
It's a good question, and one that Robbert Manders on Seeking Alpha did a thorough analysis of here. For the details of the merger, I refer you to his work.
While his analysis is careful and complete, I disagree with his conclusion. TERP shares are not trading at a significant premium to the merger value. The reason is...
Yieldcos: Calling The Bottom
by Tom Konrad Ph.D., CFA On a podcast recorded on September 14th, I said I thought that Yieldco stocks had bottomed at the end of September. Two weeks later, that call still looks like a good one (see chart.) I'm starting to hear optimistic noises from other Yieldco observers, although the general tone remains quite bearish. Why do I think September 29th was the likely bottom? End of quarter. Some institutional investors such as mutual funds reshuffle their portfolios at the end of the quarter so that they don't have...
The Making of a Solar REIT: By the Numbers
Tom Konrad, CFA A solar project at Fort Hunter Liggett in California. Photo: US Army Corps of Engineers Power REIT (NYSE:PW) announced yesterday that it had closed on a deal to buy approximately 100 acres of land leased to the owners of over 20 MW of solar projects near Fresno, CA. This will be the company’s second solar transaction and increases the share of its revenue from solar to 21%. These two solar transactions put PW well on its way to becoming the nation’s first REIT...
Fossil Fuel Companies Should Be Issuing Green Bonds
by the Climate Bonds Team ‘Fossil fuel companies should not be issuing green bonds because they are not green businesses.’ Varying versions of this statement crops up often at green bond conferences and in articles. We disagree, and here is why: It’s use of proceeds that matter Green bonds are about use of proceeds. What matters is the green characteristics and features of the projects that are being invested in, the ‘use of proceeds’, not the balance sheet backing the bond. This is an accepted concept in the green bond market...
