TransAlta Renewables – monthly dividend income machine

TransAlta Renewables – monthly dividend income machine

I increased my holdings in this monthly dividend paying company on 11 September 2019. TransAlta Renewables is a renewable energy infrastructure company headquartered in Calgary, Alberta and is traded in Canadian Dollars. TransAlta renewables is the renewable energy subsidiary of TransAlta Corporation. The parent company owns roughly 61% of TransAlta renewable’s stock.

Majority of the company’s revenues comes from power generation from wind turbines (46%) and natural gas (47%). It has access to growth capital through the capital markets as well as their parent company; TransAlta Corporation. Find enclosed an investor presentation from May 2019.

Dividend: As mentioned the company pays out a monthly dividend and the current yield is ~7 %. I don’t believe the dividend will increase in the coming periods, but due to the contract length of their assets I believe that the current dividend is sustainable and attractive at these levels. The monthly dividends, stable income and low volatility gives the stock characteristics of a fixed income security, which is a great component for any portfolio.

Historically, the dividend has a 5 % annual CAGR, but the dividend did not increase from 2017 to 2019 suggesting that the future increases will be as great as in the past.

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2 Comments

  1. Hi, Nice blog you have here.

    I love investing in green renewables, but dividend growth is of the essence for continued DGI succes. Do you foresee that they will continue the growth later on? With 7% yield growth could be in the 2-3% range for me to still be attractive. Like T for example.

    Like

    1. Hi, and thanks!

      I don’t think we’ll see a dividend growth in 2020, but I do believe that they’ll increase dividends when more projects has been dropped down from TransAlta («parent» company) to TransAlta Renewables.

      Like

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