These little-known sustainable stocks offer great potential. Hydrogen sees bright future. Participate with this ETF. Good yields with yieldcos – which are renewable energy income-generating assets with steady income streams. The top ten holdings in ESG funds are Microsoft, Alphabet, Disney, Apple, Nvidia, Gilead Sciences, Clorox, V.F. Corporation, Lin Media, and Verisk Analytics. And more
Transcript & Links, Episode 26, February 28, 2020
Hello, Ron Robins here. Welcome to podcast episode 26 for February 28, 2020, titled “Little-Known Sustainable Stocks with Potential.And More…”—presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.
Remember that you can find a full transcript, links to content – including stock symbols – and bonus material at this episode’s podcast page located at investingforthesoul.com/podcasts.
And, Google any terms that are unfamiliar to you.
Also, I know the markets are incredibly depressing of late, as is the spread of Covid-19, the coronavirus. But the world is not coming to an end!
Now to this episode.
1) Little-Known Sustainable Stocks with Potential
Paloma Kubiak has written an article about little-known sustainable stocks with potential. It’s titled, Six little-known shares to tap into the sustainable investing theme in the UK publication Your Money.
Here, I’m going to quote extensively from Ms. Kubiak. She writes that:
“Thomas Fitzgerald, co-manager of the EdenTree Amity International fund, suggests Aptiv (Aptiv PLC: APTV)… This global technology company develops safer, greener and more connected technology solutions for cars…
Fitzgerald says: ‘The company’s product portfolio matches key technological shifts in the automotive industry, while addressing some pressing socioeconomic challenges.’
For Jerry Thomas, head of global equities at Sarasin & Partners, TE Connectivity (TE Connectivity Ltd.: TEL), the supplier of connectors for the full Tesla range, is one to watch. He says the global connector industry is a $70bn niche market that has enjoyed 5% annual growth since the 1980s. ‘Connectors are non-standard, must not fail components that link the essential electrical components in the harsh environment that is the modern car.’
Another area investors could consider are companies that focus on reducing carbon emissions. One example is Hannon Armstrong Sustainable Infrastructure (Hannon Armstrong Sustainable Infrastructure Capital, Inc.: HASI) which looks to reduce carbon emissions by providing capital to companies operating in the energy efficiency and renewable energy markets.
Will Argent suggests, “NIBE Industrier, part of a group which contributes to a smaller carbon footprint and better use of energy.”
Argent says: ‘It has three business areas which develop, manufacture and market a wide range of eco-friendly, energy-efficient solutions for indoor climate control in all types of property.’
With liquified natural gas in strong demand as electricity generators close down coal and oil-fired plants, Gaztransport & Technigaz (Gaztransport & Technigaz SA: GTT.PA) is playing a small but crucial role to lower emissions, according to John Buckland, research analyst at Waverton Investment Management. He says: ‘Currently Gaztransport & Technigaz is securing nearly 100% market share for the design of containment systems for new LNGC — liquefied natural gas carriers — and it is also prominent in the design of LNG fuel tanks for ships generally, as well as land-based storage. LNG fuel enables ship internal combustion engines to meet strict International Maritime Organization 2020 emission regulations to reduce sulphur emissions.’
For a slightly different take on the sustainable investing theme, US biopharmaceutical group AbbVie (AbbVie Inc.: ABBV) is one stock to consider. It is a leader in areas such as immunology, oncology and neuroscience, according to Johan Swahn, portfolio manager of Nordea’s Global Stars Equity strategy. Nordea assesses companies on whether they conduct business responsibly in relation to their stakeholders and Swahn says AbbVie is a good example of a positive ESG company.‘’ End quote.
2) Little-Known Sustainable Stocks with Potential
Another UK writer, Michael Baxter, posts his opinions also around the idea of little-known sustainable stocks with potential.
He wrote about the Smurfit Kappa Group (Smurfit Kappa Group plc: SK3.IR) in an article Why I think this FTSE 100 stock is a must for both ethical and income investors originally appeared on the Motley Fool UK site.
He writes that “Smurfit Kappa is a paper packaging company with a worldwide client base. It manufactures, distributes, and sells paper-based packaging products. That means that the company is, so to speak, at the front line in the battle against climate change and plastic pollution. That makes it popular with ethical investors.
Smurfit Kappa’s latest results were good — earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 7% in the latest 12-month period compared to the year before… dividends are up 12%… at 3.5% [yield], [and] have been increasing every year since 2011… However, it’s the longer term potential of Smurfit Kappa that I think makes this company exciting. As more and more consumers demand better packaging, Smurfit Kappa is likely to see demand for its type of product explode.” End quote.
Hydrogen Help For This Clean Energy ET
Everyone is excited about the potential for electric vehicles. However, it may well be that over the longer-term hydrogen becomes the best source of energy. Tom Lydon of ETF Trends makes this case in an article titled Hydrogen Help For This Clean Energy ETF.
Mr. Lydon writes that “Investors should not overlook the opportunities afforded by hydrogen.” And recommends “The SPDR Kensho Clean Power ETF (NYSEArca: CNRG) is one of the best ETFs for investors looking to tap the hydrogen theme. The SPDR Kensho Clean Power ETF seeks to provide exposure to the clean power industry both in terms of generation and the underlying technology driving it…”
Continuing, Mr. Lydon says “In mainland China, Japan and South Korea, a combination of local and central government works with industry to drive development of fuel cell vehicles and the associated infrastructure,” [and] according to IHS Markit. “On the other side of the world, California’s ‘low-carbon fuel standard’ provides a clear mechanism to lower the cost of retail hydrogen and to develop a refueling infrastructure open to all.” End quote.
How to Get Income With Renewable Energy Investments
Mr. Lydon has also written a piece titled How to Get Income With Renewable Energy Investments, again appearing on ETF Trends.
He says that “Finding dividends in the renewable energy space is difficult and many of the ETFs in this arena have low or no yields. [However] the Global X YieldCo Index ETF (NasdaqGM: YLCO) offers investors a refreshed look at the combination of alternative energy investing and income… YieldCos are income-generating assets from the renewable energy space that look to deliver steady income to investors… [The Global X YieldCo Index ETF] yields 2.88%, [and] follows the Indxx YieldCo & Renewable Energy Income Index.” End quote.
3) Little-Known Sustainable Stocks with Potential
Continuing on the subject of renewable energy investment and sustainable stocks is an insightful article by Scott Levine. It’s titled, 3 Top Renewable Energy Stocks to Buy Right Now and found on the Motley Fool site. Here’s what he has to say, quote, “Astute investors who recognize this growing interest in climate change will surely be searching for related investment opportunities, such as those in renewable energy-oriented stocks. Fortunately, they need not look much further than Enphase Energy (NASDAQ: ENPH), iShares Global Clean Energy ETF (NASDAQ: ICLN), and Atlantica Yield (NASDAQ: AY).” End quote.
Here’s part of what he says about these sustainable stocks.
“Founded in 2006, Enphase Energy has grown considerably over the past 15 years… Enphase now has shipments of more than 23 million microinverters under its belt as well as a presence in 21 countries. But it’s not only the company’s leading position as a global supplier of solar microinverters… [as] Enphase is in the midst of making its foray into the energy storage market… [and] Enphase has seen its stock soar.”
[And] “for more conservative investors who are less willing to take on the risk associated with a single company, the iShares Global Clean Energy ETF is an attractive option… The iShares Global Clean Energy ETF’s holdings provide investors with exposure to a wide variety of companies. Besides Enphase Energy and its peer, SolarEdge Technologies, for example, investors can find the wind turbine manufacturer, Vestas Wind Systems, as well as geothermal specialist, Ormat Technologies, among the top 10 holdings… Since the ETF isn’t actively managed, it offers investors a reasonable expense ratio of 0.46%.. [and] a trailing-12-month yield of 1.36%.” End quote.
Plus his-third pick he says offers “Investors the opportunity to invest in renewable energy while receiving an appealing dividend. Atlantica Yield is a yieldco which has steadily increased its distribution to shareholders over the past three years. [And] currently features a 5.05% forward yield… [And according to the company’s website] it aspires to grow this [yield] at a 5% to 6% compound annual growth rate through 2022.” End quote.
Sustainable Stocks that top ESG Funds
My last item appears in the publication Quartz. It has an interesting article by John Detrixhe on what are the top holdings in ESG funds. This might be useful to you in looking at what your holding in your stock portfolio – should you own stocks.
His article is titled Microsoft stock is the biggest winner from environmental and socially responsible investing.
It lists the top ten holdings in ESG funds as, and in order, Microsoft, Alphabet, Disney, Apple, Nvidia, Gilead Sciences, Clorox, V.F. Corporation, Lin Media, and Verisk Analytics.
Well, these are my top news stories and tips for ethical and sustainable investors over the past two weeks.
And to get all the links, stock symbols and more, or to read the transcript of this podcast and with additional information too, please go to investingforthesoul.com/podcasts and scroll down to this episode.
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Talk to you again on March 13. Bye for now.
© 2020 Ron Robins, Investing for the Soul.