After four years of ups and downs, Donald Trump finally left the White House today – paving the way for the 46th President of the United States, Joe Biden, to take over. It’s not just a change from one administration to another, but it could lead to a big shift in ideology that could shape the future of businesses in North America and around the world.
Biden’s inclination towards clean energy
Over the past four years, Trump has publicly expressed his skepticism about environmental goals – which runs counter to the very idea of companies focused solely on growing the renewable energy market. Nonetheless, its critics could not restrain the growth of renewable energy facilities in North America, as demand for clean energy continued to increase at a rapid rate.
During the last presidential debate in October 2020, when Trump asked Biden if he would “shut down the oil industry.” Biden responded by saying, “I would transition the oil industry. Yes, ”and“ It needs to be replaced by renewables over time. So new President Biden – who clearly supports renewable energy – is likely to put in place policies that should accelerate the growth of renewable energy companies.
That’s why I find it a great opportunity to buy stocks of Canadian renewable energy companies that are not overvalued relative to their US peers. Let’s take a closer look at two of these clean energies TSX shares to buy now.
My first selection of renewable energy stocks for 2021
Brookfield Renewable Partners (TSX: BEP.UN) (NYSE: BEP) is a well-established green energy company. This Hamilton-based company owns and operates a large portfolio of renewable energy assets globally – primarily in North America, South America, Europe and Asia. While hydroelectric power accounts for the bulk of Brookfield Renewable Partners’ revenues, the wind and solar sector’s share of its total revenues is increasing each year.
In the quarter ended September 2020, the company’s total revenue increased 35% year over year (year over year) to reach US $ 867 million. Its adjusted EBITDA margin exceeded 70% for the quarter. Brookfield Renewable Partners shares have generated a return of 250% over the past five years. I expect its market rally to accelerate as demand for renewable energy increases further.
In addition, the favorable policies of the Biden administration could help the company to expand its infrastructure in the United States in the years to come.
Another great stock of renewable energy to buy now
Northland Power (TSX: NPI) is much smaller than Brookfield Renewable Partners, but it is a fast growing producer of electricity from renewable energy. The company derives most of its revenues from the offshore wind energy segment. In fiscal 2019, the segment accounted for nearly 61% of its total revenue, while 13% came from the onshore renewable energy segment.
In addition to Northland Power’s main focus on the North American market, the company is also focusing on Europe. Its sales have grown 24% to 34% on an annual basis for the past three consecutive quarters. At the same time, its EBITDA margin remained between 54% and 63% during this period.
Northland Power shares have returned 169% over the past five years. The Biden administration’s favorable policies are likely to accelerate the company’s growth in North America – sparking a rally in its stock in 2021.
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