Manage episode 299855971 series 2797551
Great ESG Stocks, Funds, for August. Funds and companies reviewed include Janus Henderson Global Technology and Innovation Fund Class A, New Alternatives Fund Class A, Parnassus Mid Cap Growth Fund – Investor, Calvert Equity Fund Class A, TPI Composites, Phillips 66, Brookfield Infrastructure, NextEra Energy Partners, and Brookfield Renewable. Analysts from Zacks, fool.com, other institutionsPODCAST: Great ESG Stocks, Funds, for August
Transcript & Links, Episode 64, August 13, 2021
Hello, Ron Robins here. Welcome to podcast episode 64 published on August 13, titled “Great ESG Stocks, Funds, for August” — 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, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.
Now, just a reminder. I do not evaluate any of the stocks or funds mentioned in this podcast. Furthermore, if you’re concerned about the ESG and sustainability ratings of any stock or fund included in this podcast, check your broker’s site for such information.
If your broker doesn’t have this information, signup for free with Morningstar and you can gain access to company and fund ESG-sustainability ratings. Please note, I receive no compensation from Morningstar or anyone else in these podcasts.
Also, if any terms are unfamiliar to you, simply Google them.
-------------------------------------------------------------1. Great ESG Stocks, Funds, for August
I’m going to start with an article titled 4 Funds to Pick as Sustainable Investment Hits $35.3 Trillion. It’s by Zacks Equity Research. The article on this podcasts’ webpage has links to detailed reports on each of these funds. Now, here are some quotes from the article.
“All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). In addition, the minimum initial investment for these funds is within $5,000…1) Janus Henderson Global Technology and Innovation Fund Class A (JATAX)
Aims for long-term growth of capital. The fund invests majority of net assets in securities of companies benefiting from advances or improvements in technology.
This Sector-Tech product has a history of positive total returns for more than 10 years. Specifically, the fund’s returns are 30.2% and 32.2% over the past three and five-year periods, respectively…
(The) Janus Henderson Global Technology and Innovation Fund Class A has a Zacks Mutual Fund Rank of 1 and an annual expense ratio of 0.99% compared with the category average of 1.05%. Get Your Free (JATAX): Fund Analysis Report2) New Alternatives Fund Class A (NALFX)
Aims for long-term capital growth with income as its secondary objective. It primarily invests in common stocks of companies and even in other equity securities, such as real-estate investment trusts and American Depository Receipts.
This Zacks sector – Other product has a history of positive total returns for more than 10 years. Specifically, (the) New Alternatives Fund Class A has a three and five-year returns of 28.7% and 19.8%, respectively…
(The fund) has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.96% compared to the category average of 1.26%. Get Your Free (NALFX): Fund Analysis Report3) Parnassus Mid Cap Growth Fund - Investor (PARNX)
Aims for capital appreciation. The fund invests majority of assets in mid-sized growth companies.
This Zacks Sector – Large Cap Value has a history of positive total returns for more than 10 years. Specifically, (the) Parnassus Mid Cap Growth Fund - Investor has returned 18.5% and 16.8% for the three and five-year periods, respectively…
(The fund) has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.83%, which is below the category average of 1.09%. Get Your Free (PARNX): Fund Analysis Report4) Calvert Equity Fund Class A (CSIEX)
Aims for growth of capital through investment in stocks believed to offer opportunities for potential capital appreciation. The fund invests majority of assets in common stocks of companies that rank among the top 1,000 U.S.-listed companies.
This Zacks Large Cap Growth product has a history of positive total returns for more than 10 years. Specifically, (the) Calvert Equity Fund Class A has a three and five-year returns of 23.7% and 20.8%, respectively…
(The fund) has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.94% compared to the category average of 0.99%. Get Your Free (CSIEX): Fund Analysis Report” End quotes
-------------------------------------------------------------2. Great ESG Stocks, Funds, for August
Now back to a favourite sector, renewable energy. Here’s an article by Jason Hall, a regular on this podcast. It’s titled 3 Top Energy Stocks to Buy in August and appeared on fool.com. Now some quotes.“1) TPI Composites (NASDAQ: TPIC)
Over the past few years, TPI Composites has spent a lot of money building out capacity. The company, which primarily manufactures wind turbine blades for leading wind energy companies, was predicting that this new capacity would start paying off this year.
However, that's not looking likely to be the case, after management trimmed its full-year guidance in late July. As a result, TPI shares are down more than 50% from the high reached in January, and management is now cautioning that sales could be flat through 2022 as well…
In the interim, the company generates solid operating cash flow, so it should have little trouble continuing to fund its business during the current soft period in the cycle…
Shares are still more expensive than almost any time in the company's history prior to late 2020… It's a turnaround play with plenty of growth prospects on the other side.2) Phillips 66 (NYSE: PSX)
The past year has been pretty brutal for Phillips 66. The company makes most of its money refining and selling refined products like gasoline and diesel, and last year's collapse cost it $4 billion in losses…
What about the low-carbon future? Phillips 66 is making serious inroads there, too, having already converted one refinery to produce renewable diesel, and now doing the same with its Rodeo refinery in Northern California.
Moreover, the company's significant natural gas pipeline and storage facility, along with its huge petrochemical manufacturing operations, are already set up to handle renewable natural gas. As more supply of this product, which is captured from human and agricultural waste, becomes available, Phillips 66's existing infrastructure will play an important role in the transition away from fossil fuels.
Investors who buy now can capture a heady 4.7% dividend yield that's likely to move higher… That high yield will make it a lot easier to hold the stock while the company transitions away from oil and to more and more renewables over time.3) Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC)
While this isn't a pure play on energy, Brookfield Infrastructure makes the cut as a top stock with growing energy exposure that investors should buy now…
Brookfield Infrastructure is a diversified business, giving investors exposure to telecommunications, transportation, and utilities infrastructure assets on multiple continents. The nature of its business also results in steady cash flows, making its 3%-plus dividend yield very secure.” End quotes.
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Another fool.com favourite analyst of ours is Neha Chamaria. Her recent article is titled Got $10,000? 3 Renewable-Energy Stocks to Buy For the Long Term. Here are her picks followed by quotes from her on each one.“1) NextEra Energy Partners (NYSE: NEP)
Calls itself a growth-oriented limited partnership, and rightly so. The company has grown its revenue and cash flow steadily over the years.
NextEra Energy Partners owns and operates a large portfolio of wind and solar assets and sells power to third parties under long-term contracts…
Two big factors make NextEra Energy Partners such a compelling stock. First is the backing of its parent, NextEra Energy (NYSE: NEE), which is already the world's largest producer of wind and solar energy…
Second is NextEra Energy Partners' focus on generating cash flows from assets and passing them on to shareholders as dividends… it is targeting 12%-15% average annual growth in dividends through 2024 backed by cash-flow growth. Following its recently announced strong second-quarter numbers and a big acquisition, this 3.4%-yielding clean energy is appealing.2) Brookfield Renewable (NYSE: BEP) (NYSE: BEPC)
Is another company that could make a killing in renewable energy. It's similar to NextEra Energy Partners as it's also backed by Brookfield Asset Management, but Brookfield Renewable doesn't necessarily rely on acquisitions from parent to grow its cash flows. Also, it has a humongous 21 GW capacity in operation and another 27 GW under development.
The key difference -- one that could also help you diversify your portfolio -- is that while NextEra Energy Partners focuses on solar, wind, and natural gas, Brookfield Renewable is primarily a hydropower play and has only recently started to expand its solar portfolio…
Between 2010 and 2020, the company grew funds from operations (FFO) at a compound annual growth rate of around 10%. Through 2025, inflation escalation, margin growth, and its pipeline development alone could boost Brookfield Renewable's FFO by 6%-11%. And if management can find meaningful acquisition opportunities like it has in the past, it could boost FFO by another 9%.
That's incredible growth potential, and enough to power up Brookfield Renewable's dividends. For now, management is targeting 5%-9% growth in annual dividend in the long term.
Dividend growth is, in fact, one big reason the story for both NextEra Energy Partners and Brookfield Renewable has played out so well so far.3) TPI Composites (NASDAQ: TPIC) (Yes another recommendation!)
TPI is the world's largest independent manufacturer of wind blades and serves leading onshore wind turbine manufacturers, including Vestas (Vestas.Co), Nordex (NDX1.DE), Siemens Gamesa (SGRE.MC), and General Electric's (NYSE: GE) renewables arm. Of late, TPI shares have tanked on decelerating profits and cash flows, but investors could be missing the big picture.
TPI's top line is growing steadily: If it hits the midpoint of its revised 2021 revenue guidance at $1.8 billion, TPI would have grown revenue at a solid compound annual rate of 18.5% in five years. Also, thanks to steady order inflow and production expansion in recent years, TPI's estimated megawatts -- or the energy it can produce from all wind blade sets manufactured during the year -- shot up to 12,080 megawatts in 2020 from only 6,560 megawatts in 2018.
Most importantly, TPI's capital expenditure is tapering after years of investment, which means it could soon head back to its positive free-cash-flow days. That should be enough to propel the stock price higher.
Another growth avenue is TPI's transportation business, which manufactures solutions for commercial electric vehicles… I wouldn't be surprised to see management focus more on this business… Now that's an intriguing option, and one that should do well for the stock.” End quotes.
-------------------------------------------------------------4. Great ESG Stocks, Funds, for August Honorable Mention
1) Title 20 stocks for maximum growth as the world switches to clean energy by MarketWatch. Now, MarketWatch allows you a few free articles but thereafter a subscription is required.
Well, these are my top news stories with their stock and fund tips -- for this podcast “Great ESG Stocks, Funds, for August.“
To get all the links, stock symbols, or to read the transcript of this podcast -- and more -- go to investingforthesoul.com/podcasts and scroll down to this episode.
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Thank you for listening.
Talk to you next on August 27. Bye for now.
© 2021 Ron Robins, Investing for the Soul.