Change Healthcare, Hannon Armstrong, Plug Power, Brookfield Renewable Partners, are among the more sustainable investing ideas covered in this podcast. Listen to find out more. Ethical and sustainable investors need to go beyond company ESG ratings. They need to especially consider what components of ESG are truly ‘material’ to a company’s operational and financial performance
Transcript & Links, Episode 31, May 8, 2020
Hello, Ron Robins here. Welcome to podcast episode 31 published on May 8 titled “More Sustainable Investing Ideas”— and 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.
Well, the analysts are still asleep. The news-flow continues low. So, this will be another short podcast. Though short, there are still some useful recommendations.
1) More Sustainable Investing Ideas
The first item is by Michael Marcus at TipRanks with his article 3 “Perfect 10″ Stocks That Tick All the Boxes. However, I’m just going to write about two of them that I believe are relevant for ethical and sustainable investors.
Change Healthcare (CHNG).
Quote “Change Healthcare is a software company that provides solutions for analysis, connectivity, communication, payment, and workflow optimization for healthcare providers. Change’s products connect patients, payers, and providers in the health system. In the current pandemic situation, a company that connects the data dots for the healthcare system should find itself in demand.
Change reported its fiscal third quarter results in February, its third since going public, and beat the earnings estimates by 10%. Earnings per share came in at 33 cents, and revenue was $808.2 million… In line with his bullish view, Steven Halper of Cantor Fitzgerald, gives the stock a Buy rating with a $20 price target that suggests an impressive upside of 96%.” End quote.
Hannon Armstrong (HASI)
Mr. Marcus says this about the company. Quote, “Hannon Armstrong [is] a financial services company focused on climate change. Where some just talk about the need to support green initiatives, Hannon Armstrong puts its money where its mouth is, investing in, and funding ventures in, energy efficiency, renewable energy, and sustainable infrastructure. As of December 2019, the company was managing more than $6 billion in assets…
The company also raised its dividend by a half cent, to an even 34 cents quarterly. The new dividend makes the annualized payment $1.36 and went into effect this month. At 5.2%, the yield is significantly higher than the market average, and simply blows away Treasury bonds. Hannon has a 7-year history of dividend reliability.” End quote. Not sure about comparing Hannon Armstrong’s yield with treasury bonds as they are two very different types of investments for two very different purposes.
2) More Sustainable Investing Ideas
Now, are you still interested in renewable energy? Many of you might have heard of Plug Power (NASDAQ: PLUG), the hydrogen fuel cell technology company. But even more of you will know Brookfield Renewable Partners (NYSE: BEP). Well, John Bromel compares the two companies in his article Better Buy: Plug Power vs. Brookfield Renewable Partners. It appears on The Motley Fool site.
He writes that “Plug Power is a leader in hydrogen fuel cell technology for vehicles. Its products have found a niche market in industries where extended downtime (to recharge a battery) isn’t an option: Mostly warehouse forklifts and airport safety vehicles.
However, Plug wants to break out of this niche into the broader vehicle market. It’s been working on fuel-cell-powered delivery vans and has provided small fleets of them to shipping giant DHL and to FedEx…
Conversely… Brookfield Renewable Partners invests across the renewable energy spectrum and sells the electricity it generates to utilities. The bulk of its revenues come from hydroelectric dams, but it also operates significant wind and solar infrastructure…
This wasn’t much of a contest. Even though it may not be priced at a discount, Brookfield Renewable Partners beats Plug Power hands down. Investors looking to put money into green energy should consider taking a stake in Brookfield.” End quotes.
3) More Sustainable Investing Ideas
Some of the articles I’ve included in these podcasts recommended Renewable Energy Group (NASDAQ: REGI). Probably many of you invested in them. If you have any interest in this company you should read Maxx Chatsko’s new article 1 Question to Ask Yourself Before Buying Renewable Energy Group.
Mr. Chatsko says that “Global consumption of crude oil has fallen by roughly 30% from pre-pandemic levels. Combine that with an oil price war started by Saudi Arabia and dwindling storage options, and it’s not too surprising global crude oil benchmarks have dipped below $20 per barrel.
What might be more surprising is the relative resilience demonstrated by shares of Renewable Energy Group. The biomass-based diesel producer has lost only 13% of its market value since the beginning of March, while some oil supermajors have lost over 25%…
Renewable Energy Group is one of the country’s largest manufacturers of biomass-based diesel fuels… In December, Congress retroactively reinstated an expired tax credit to the first day of 2018 and extended it through the last day of 2022…
That helps to explain why shares of the renewable fuels leader have been relatively resilient.
The reinstatement of tax credits will help to insulate the business from tumbling selling prices, but a shortage of feedstocks could more than offset the advantage. Long story short, now is not a great time to open a new position or add to an existing position in this biodiesel stock.” End quote.
4) More Sustainable Investing Ideas
Now here’s some news that I think you’ll be interested in and it’s a topic I’ve brought up before. The article is by Emily Steinbarth and appeared in Advisor Perspectives with the title Don’t Be Fooled by Most ESG Rankings. Focus on Materiality Instead.
Ms. Steinbarth says that “The Wall Street Journal recently ran an article about how big technology stocks dominate ESG funds. Tech companies are not usually associated with the big ESG issues like climate change, renewable energy, or diversity. So, are investors being fooled?” End quote.
In her article, she makes a case for not just focusing on ESG scores. ESG scores and their components each may or may not affect the material functioning and profitability of a company. Hence the need to consider what is factually material or impactful to the company’s operations and bottom line. That way you can make more well-considered investment decisions. Ms. Steinbarth’s article is worth reading for all ethical and sustainable investors.
Well, these are my top news stories and tips for this podcast: More Sustainable Investing Ideas.
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 May 22. Bye for now.
© 2020 Ron Robins, Investing for the Soul.