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3 Clean Energy Stocks With Passive Income for 2023

Utility, wind power
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

I get it. It can be hard to think about clean energy stocks right now. After all, the entire sector had a pretty rough year. Yet because of this, the entire clean energy sector is offering investors an opportunity — especially for those seeking long-term passive income.

That passive income can come from clean energy stocks in two ways. First, there’s the returns you could be in for with this downturn. You’ll likely see shares rebound significantly in the years to come as the entire industry grows, especially out of a potential recession.

But in the case of these three clean energy stocks, you’ll also receive passive income from dividends. That certainly lessens any potential near-term stings from share price drops. But each offers such a great deal, you’ll be glad you locked in these yields when you did.

TransAlta stock

First up, we have TransAlta Renewables (TSX:RNW), an excellent choice if you’re looking for a smooth transition among your clean energy stocks. TransAlta stock is a monthly passive-income provider with a dividend yield at 6.61% as of writing. Now, it’s not as much of a deal as other companies, but that comes from its investment in Canadian renewable gas.

Given this, TransAlta stock has a clear path to move away from gas and towards its other investments in Canadian solar and wind power. So, it has cash on hand now and in the years to come for investors to consider.

Shares of TransAlta stock are still down 20.5% year to date, so you definitely get a significant bump as a long-term holder. Meanwhile, those shares have also grown 157% in the last decade for a compound annual growth rate (CAGR) of 10.66% as of writing.

Brookfield Renewable

If you’re looking for diversification among clean energy stocks, I would consider Brookfield Renewable Partners (TSX:BEP.UN). Brookfield stock is a strong option, as it has a diverse range of clean energy assets, from nuclear power to wind farms. These are located all around the world, and the company continues to create more deals, as countries look to create power at home.

Plus, Brookfield stock is backed by a parent company that’s been in clean energy since the 1890s! So, it certainly has a stable path of growth behind it. And right now, you can lock in a dividend yield at 4.57%, while shares trade at just 1.8 times earnings.

That’s looking to grow even further in the next few years. But right now, Brookfield stock is down 14.5% year to date. Even still, shares are up 297% in the last decade for a CAGR of 14.78% as of writing.

Northland stock

Finally, if you want passive income that comes in often, then you’ll want to consider Northland Power (TSX:NPI). Northland stock is stellar option, as it focuses in on offshore wind farms. These are ideal in the near future. Companies wouldn’t take up the much-needed arable land, and winds are far stronger offshore than they are on land.

Still, Northland stock offers a stellar deal for investors seeking passive income. Shares trade at just 13.62 times earnings, even with the stock actually up 2.62% year to date. Even so, you can collect a dividend yield at 3.21% as of writing, and that’s delivered every month.

And Northland stock isn’t new either. The company has been around for decades and grown 228% in the last decade alone. That comes to a CAGR of 12.6% as of writing.

Bottom line

All three of these clean energy stocks are perfect options for any portfolio. By choosing all three, you would create a diversified investment into the clean energy sector. Furthermore, you’ll be collecting passive income while you wait for these stocks to rebound.

The post 3 Clean Energy Stocks With Passive Income for 2023 appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Brookfield Renewable Partners?

Before you consider Brookfield Renewable Partners, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in November 2022 ... and Brookfield Renewable Partners wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 15 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 11/4/22

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Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

2022