With a focus on renewable energy, this power generator holds a lot of conceptual appeal for investors. Even more important to income-focused investors is its stable cash flows from a diverse mix of hydroelectric, wind and solar assets.
That diversity, plus long-term contracts, helps this high-yielding utility firm continue to build out its operations and add to your sustainable dividends.
The stock trades at 26.9 times the company’s 2022 earnings forecast.
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TRANSALTA RENEWABLES, (Toronto symbol RNW; www.transaltarenewables.com) is one of the largest wind power generators in Canada. TransAlta Corp. (symbol TA on Toronto) holds 64% of this energy provider.
All together, TransAlta Renewables owns 29 wind and solar farms, 13 hydroelectric facilities, eight natural gas generation plants, and one battery storage facility. Those projects are in Canada, the U.S. and Australia.
The company sells power under long-term, guaranteed agreements, which cuts your risk. Right now, its average contract life is 11 years. As well, parent company TransAlta Corp. (Toronto symbol TA) is one of its main customers. The parent also operates TransAlta Renewables’ assets in exchange for a management fee.
TransAlta first sold shares in TransAlta Renewables on August 9, 2013, at $10 a share. After the IPO, TransAlta owned 80% of the renewables business. Later share sales cut its stake to about 60%.
Due to acquisitions and the building of new plants, TransAlta Renewables’ revenue rose 18.4%, from $259 million in 2016 to $462 million in 2018. Revenue then dipped 3.5% to $446 million in 2019 as lower production from its existing wind farms offset the contribution of acquisitions. Revenue fell 2.2% to $436 million in 2020 on lower demand from its gas-fired plants.
Cash flow improved 15.9%, from $245 million in 2016 to $284 million in 2017. Due to more shares outstanding, cash flow per share gained just 10.0%, from $1.10 to $1.21. Cash flow slipped to $1.15 a share (or a total of $295 million) in 2018, before falling again to $1.11 a share (or $293 million) in 2019. It rose to $1.14 a share (or $304 million) for 2020.
In the quarter ended March 31, 2022, revenue rose 13.5%, to $143.0 million from $126.0 million a year earlier. Cash flow per share increased 8.1%, to $0.40 from $0.37.
Wind power relies heavily on government subsidies and political support to make it profitable. However, TransAlta Renewables cuts risk by selling its power under long-term, guaranteed agreements. Right now, its average contract life is 11 years. That one of its main customers is its parent (TransAlta Corp.) is also a benefit.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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Information from Other Sources: For reasons such as improving personalization of our service (for example, providing better product recommendations or special offers that we think will interest you), we might receive information about you from other sources and add it to our account information. We also sometimes receive updated delivery and address information from our shippers or other sources so that we can correct our records and deliver your next purchase or communication more easily.
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TSI Network does everything possible to prevent unauthorized intrusion to its websites and the alteration, acquisition or misuse of personal information by unauthorized persons. Notably passwords submitted by users of our websites are encrypted using encryption mechanisms. However, TSI Network cautions visitors to its websites that no network, including the Internet, is entirely secure. Accordingly, we cannot be responsible for loss, corruption or unauthorized acquisition of personal information provided to our websites, or for any damages resulting from such loss, corruption or unauthorized acquisition.
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Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
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