Analysts Like These Stocks in Today’s Markets. Down markets provide stock buying opportunities in some infrastructure and renewable energy stocks.

Transcript & Links, Episode 115, October 6, 2023

Hello, Ron Robins here. So, welcome to this podcast episode 115 titled “Analysts Like These Stocks in Today’s Markets.” It’s presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing mentoring, news, commentary, information, and resources. And look at my newly revised website at investingforthesoul.com! Tell me what you think.

Now, remember that you can find a full transcript, and links to content – including stock symbols and bonus material – on this episode’s podcast page located at investingforthesoul.com/podcasts.

Also, a reminder. I do not evaluate any of the stocks or funds mentioned in these podcasts, nor do I receive any compensation from anyone covered in these podcasts. Furthermore, I will reveal to you any personal investments I have in the investments mentioned herein.

Additionally, quotes about individual companies are brief. Please go to this podcast’s webpage for links to the actual articles for more company and stock information. Also, some companies might be covered more than once and there are also 4 article links below that time didn’t allow me to review here.

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1. Analysts Like These Stocks in Today’s Markets

I’m beginning with this article which reflects the title of this episode. The article is titled These 4 Stocks Will Thrive Even if There’s a Recession. It’s by Nicholas Jasinski and published on barrons.com. Here’s some of what Mr. Jasinski writes.

“A trio of U.S. government programs—the Infrastructure Investment and Jobs Act, the Chips Act, and the Inflation Reduction Act—will help keep the money flowing, come economic rain or shine. Together, the three represent hundreds of billions of dollars in spending and subsidies targeted at upgrading the nation’s roads and bridges, expanding domestic manufacturing of semiconductors, and modernizing the electrical grid, among many other things…

Many of the obvious beneficiaries have already seen their stocks surge in anticipation. Those include the construction and engineering contractors who will be doing a lot of the planning and construction work for the plethora of projects coming up.

Take Sterling Infrastructure (STRL)

… a 2023 Barron’s Roundtable pick in January when shares were around $32. The stock has climbed 126% this year, to a recent $74.

Quanta Services (PWR)

… the 800-pound gorilla in the space, is up 33% this year and trades for 27 times forward earnings, versus its five-year average of around 16.5 times. Chasing these infrastructure and electrification winners now seems tough, and there may be a better entry point should markets pull back.

Some, though, might be worth considering despite big gains. Daniel Skubiz, a portfolio manager at Ziegler Capital Management, points to 

MYR Group (MYRG)

… which sits in the sweet spot for the investments that the U.S. government, utilities, and companies are making—recession or not. The stock, up 47% year to date, has been no slouch, and shares trade at a premium multiple of 21 times forward earnings. But that’s well deserved for the builder of large-scale electrical infrastructure, including transmission and distribution power lines, substations, and for a variety of commercial and industrial applications.

Other stocks in the group appear cheaper, and many are small-caps, which as a group have had a tough 2023…

MasTec (MTZ) and Aecom (ACM)

… are other construction and engineering companies that have sat out the group’s 2023 rally and are trading at reasonable valuations.

They’re worth a look even if there’s a recession.” End quotes.

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2. Analysts Like These Stocks in Today’s Markets

Continuing along these lines is this video podcast titled These Solar Energy Stocks Have Dropped 60%+ but They May Be Good Buys Now. It’s by Travis Hoium and found on fool.com. Here’s some of what Mr. Hoium says. The stocks he covers are Enphase, SolarEdge, SunPower, and Sunrun.

“Solar energy stocks have had a tough year, despite improving subsidies and technology in the industry. Is a recovery coming?

Solar energy stocks have been on a downward slide all year as interest rates and falling demand hit the industry. In this video, Travis Hoium covers the challenges and opportunities for some solar companies in the future. 

*Stock prices used were end-of-day prices of Sept. 20, 2023.” End quotes.

You can find the video by clicking this link https://youtu.be/27BJlOyAtrg

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3. Analysts Like These Stocks in Today’s Markets

And we have more on renewable energy in this next article. It’s titled 2 Renewable Energy Stocks That Could Put You in the Green and it’s by Demetris Afxentiou on fool.ca. Now some brief comments by Mr. Afxentiou from his article.

“Clean energy: long-term potential and a healthy yield

Innergex Renewable Energy (TSX:INE)

… is one of those stocks that go unnoticed by investors. It’s also one of the renewable energy stocks that could bolster your long-term portfolio.

Innergex operates a portfolio of 85 facilities with a generating capacity of over 4,200MW. The company also has a backlog of projects in various stages of development comprising over 9,300MW of capacity. Part of that is because, unlike many other renewable operators, Innergex has taken an aggressive stance on expansion.

Innergex has operations across North America, South America, and Europe. In terms of facilities, Innergex’s portfolio comprises hydro, wind, and solar elements. While its portfolio of facilities also includes battery energy storage systems.

So then, what makes Innergex one of the renewable energy stocks to buy right now?

Despite the company’s aggressive growth and juicy dividend (more on that in a second), Innergex’s stock is down 25% year to date. Some of that drop can be attributed to the rise in interest rates and spill-on effect it has on borrowing.

Still, the company remains a stellar long-term pick that also boasts a healthy 5.89% (dividend), making it a great option for growth and income-seeking investors alike.

(Next) An established name for a great, green investment

Brookfield Renewable Partners (TSX:BEP.UN)

… is an intriguing option worthy of mention.

Brookfield Renewable currently has operations across 20 countries, boasting a well-diversified portfolio of wind, solar, and hydro facilities across those markets. The stable, if not lucrative, business model that Brookfield and other renewable energy stocks adhere to provides a recurring source of revenue.

That revenue stream is backed by long-term regulated contracts which often span decades. The company is also expecting to continue growing its portfolio through rate increases and expansion.

Turning to income, Brookfield offers investors a juicy 5.22% yield. This fact, along with the expected growth of the renewable energy market alone, makes Brookfield a superb buy-and-forget candidate for almost any portfolio

Throw in the substantial discount on the stock right now, which shows a 30% drop over the trailing 12-month period, and you have a great discounted buy.

Final thoughts

No investment is without some risk, and that includes the otherwise superb renewable energy stocks noted above. Fortunately, both Brookfield and Innergex have the funds and growth options to not only weather market volatility but continue to grow for years.

In my opinion, one or both would do well as part of any well-diversified portfolio.” End quotes.

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4. Analysts Like These Stocks in Today’s Markets

Now here’s an article that gives good ESG analysis into a stock in almost all ethical and sustainable portfolios — whether they know it or not. The article is titled Does Coca-Cola’s ESG Strategy Make It a Buy for Ethical Investors Seeking Sustainability With Dividends? It’s by Nicholas Robbins – no relation to me – and seen on fool.com.

Here’s some of what Mr. Robbins says.

“Striking the right balance between financial returns and ethical considerations remains a growing concern for many investors. Environmental, social, and governance (ESG) principles can offer a guiding light for ethical investors.

Coca-Cola (KO)

… the beverage giant, offers an intriguing proposition in this regard. It’s worth a look into whether Coca-Cola’s stock provides an appealing choice for investors who prioritize sustainability and responsible corporate practices while seeking stable dividend income.

A beacon of ESG commitment

Essentially, ESG principles are a set of criteria that investors use to evaluate a company’s impact on the world. In Coca-Cola’s case, this translates into a commitment to reducing its environmental footprint, promoting social responsibility, and adhering to high governance standards. And all of this can impact the company’s financial performance. 

Coca-Cola’s ESG strategy appears deeply embedded in the company’s DNA. According to Morningstar Sustainalytics, the company ranks 29th for sustainability in the category of food products, beating out rival PepsiCo, which ranks 39th out of 624 companies. 

Sustainability drives profitability

Coca-Cola’s initiatives to reduce plastic use, enhance water efficiency, and improve energy efficiency all have financial benefits…

The company’s 2021 sustainability goals included reducing the creation of new plastic from nonrenewable sources by 20% of its 2020 figures over the following five years…Less plastic means less raw material expense and less energy required for production, ultimately resulting in higher profit margins.

Coca-Cola’s adoption of ultra-lightweight technology for its packaging, which extends shelf life while saving on packaging costs, provides an excellent example of how sustainability and cost-efficiency can go hand in hand. Such innovations are not just about being environmentally responsible; they make business sense, too…

Water replenishment provides sustainability

Coca-Cola continues to deliver on its water leadership goals, having replenished more water than it consumed since 2015, according to its 2022 ESG report. This not only aligns with ethical concerns, but also helps ensure the company’s long-term viability, as water remains a crucial ingredient in its offerings.

Coca-Cola’s water replenishment initiatives, such as the Living Danube Partnership with the World Wildlife Fund, contribute to environmental conservation and secure access to a crucial resource for its operations. This partnership includes efforts to restore water to the Danube River Basin, which covers 10 countries in Eastern Europe, where local wetlands fell to 20% of their historical area, according to the WWF…

Forging a path to net-zero emissions

Coca-Cola, together with its bottling partners, has committed to achieving net-zero greenhouse gas emissions by 2040…

A sustainable dividend can’t hurt

Coca-Cola’s commitment to ESG principles isn’t just about doing the right thing; it also presents an enticing prospect for dividend-seeking investors. The company has a remarkable track record of increasing dividends annually for over six decades…

Potential risks and rewards

While Coca-Cola’s sustainability initiatives appear impressive, there are potential challenges to consider. Continued transition to sustainable practices can involve upfront costs, which may impact short-term profitability. The Living Danube grant, for example, cost the company $4.4 million, not including the costs of establishment and implementation.

Additionally, consumer preferences and regulatory changes can vary over time, potentially affecting product demand and supply chain dynamics. Such shifts can delay or even derail sustainability initiatives. Coke notes the challenge of building better consumer recycling habits have hampered its efforts to meet its World Without Waste goals, which sought to recycle one can or bottle for each one sold by 2030 and have seen little progression to date. 

Investors should weigh these factors alongside the benefits of Coca-Cola’s sustainable journey when evaluating its long-term investment appeal. Still, Coca-Cola’s stock offers new investors a refreshing blend of sustainability and profitability for those who value both their financial and ethical bottom lines.” End quotes.

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Other Honorable Mentions – not in any order

1) Title: Can the U.S. Make Solar Panels? This Company Thinks So. On nytimes.com. By Ivan Penn.

2) Title: Faith-Based Investing Gathers Momentum on morningstar.co.uk. By James Gard.

3) Title: Top 10: Renewable Energy Companies on energydigital.com. By Tom Swallow.

4) Title: 15 Climate Tech Companies to Watch in 2023 MIT Technology Review on technologyreview.com.

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Ending Comment

Well, these are my top news stories with their stock and fund tips — for this podcast titled: “Analysts Like These Stocks in Today’s Markets.”

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Bye for now.

 

© 2023 Ron Robins, Investing for the Soul