Renewable power stocks saw a rebound lately. In particular, Northland Power (TSX:NPI) stock just experienced a four-day rally that witnessed the dividend stock rising more than 13%. In early 2022, it based around the $35-per-share level and appreciated over 18%. On February 28, McAlinden Research provided some insights on the drivers of the latest pop:
“Severe storms across the European continent have driven wind energy output in the E.U. to record highs throughout the last week. That much-needed renewable output comes as the continent continues to struggle with a severe crunch in oil and gas markets. Amid an escalation of the Russia-Ukraine conflict, this situation is unlikely to be resolved any time soon.That boosts the prospects of alternative energy sources like wind, which continues to pique the interest of investors. India, which relies heavily on fossil fuels, announced it is looking to meet its energy demand by developing 30 gigawatts of offshore wind installations by 2030. Meanwhile, the U.S. is auctioning off massive plots of ocean off the coasts of New York and New Jersey for offshore wind farms, which are expected to shatter wind energy investment records.”
McAlinden Research
“The whole sector hasn’t done well in the past year. But this current pullback is an opportunity. NPI is a leader in offshore wind energy. We own other names in green energy. This is a decent investment, though.”Northland PowerChristine Poole, managing director at Globe Invest Capital Management
About 37% of its renewable energy stock’s power generation is from offshore wind, 26% is onshore wind, 30% is natural gas, and 8% is solar.
Recent results On February 24, Northland Power reported strong fourth-quarter results:
- Sales growth of 30% year over year to $640.1 million
- Gross profit increase of 33% to $579.9 million
- Operating income rose 67% to $295.5 million
- Adjusted EBITDA, a cash flow proxy, growth of 35% to $363.6 million
- Operating cash flow of $559.4 million, up 80%
- Sales growth of 2% versus 2020 to $2,093 million
- Gross profit increase of 1% to $1,880 million
- Operating income dropped 10% to $809 million
- Adjusted EBITDA decline of 3% to $1,137 million
- Operating cash flow of $1,609 million, up 22%
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The Motley Fool has no position in any of the stocks mentioned. Fool contributor Kay Ng owns shares of Northland Power.