Written by Amy Legate-Wolfe at The Motley Fool Canada
If Canadian investors are looking forward to the next five years, they want to know what kind of industries are set to continue or start climbing. And there are so many to consider. But for the sake of this article, if you just have $1,000 you want to put aside, there’s really only one industry I’d consider.
The energy transition is here. Countries around the world made commitments towards reducing greenhouse gas emissions. But then the Ukraine crisis hit. Suddenly, European countries in particular put sanctions against Russia. Having no access to cheap Russian oil meant removing the reliance they had on an outside source for power.
Now, Europe in particular is moving towards a clean-energy future. And it’s full speed ahead. And, of course, countries around the world will come on board at a faster and faster clip. Even the Organization of Petroleum Exporting Countries admitted that by 2040, the need for oil and gas will fall dramatically. It will be mostly lower income countries that rely on the product by then.
That’s only 18 years away. So, over the next five years, there’s bound to be huge movement in this area to set the world up for this eventual reality. And in that case, these are the stocks Canadian investors should consider.
Three TSX stocks for this eventual reality
If I’m looking at the next five years in the clean energy sector, I want to make sure I’m putting my $1,000 to work. But instead of putting it towards one stock, I’d recommend three TSX stocks today. Those would be Hydro One (TSX:H), Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP), and NPI (TSX:NPI).
All three of these companies will remain strong during the clean energy transition but are also strong choices right now. Hydro One provides hydro power to the province of Ontario, which accounts for about 40% of the Canadian population. Brookfield has a more global outlook, investing in clean energy assets around the world. This includes Europe, where partnerships have been expanding. As for NPI, it too owns and operates clean power around the world, continuing to beat out earnings estimates.
Each of these TSX stocks also offer Canadian investors dividends while you wait for share growth. NPI sits at 2.62%, Hydro One is at 3.17%, and Brookfield is at 3.23%. Furthermore, they’re all up in 2022! That’s an unheard-of feat these days. NPI is up by 23% year to date, with Brookfield and Hydro up by 13% and 9%, respectively.
All three of these TSX stocks are set to climb in the next five years for Canadian investors. Each has proven their worth over the last few years but remain in an industry that’s still relatively new, when considering market interest. That gives Canadian investors a strong opportunity to get in if not at, then near the ground floor.
With Hydro One, Brookfield and NPI all up during this market recovery, now is the time to get in on the action. Well before shares move above and beyond today’s cheap price.
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 August 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 27 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 8/8/22
Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners. The Motley Fool has no position in any of the stocks mentioned.