PODCAST: Top Water, Energy, Stocks and Funds

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Top Water, Energy, Stocks and Funds articles covered: “5 'Blue Economy' Stocks and Funds”; “These 2 Renewable Energy Stocks Are Too Cheap to Ignore”; “Technical Analyst Sees Lots of Upside Potential in This Alternative Energy Stock”; “Why Enphase Energy Stock Soared in February”; “Why Digital Realty Trust is a leading Socially Responsible Dividend (DLR) stock”

PODCAST: Top Water, Energy, Stocks and Funds

Transcript & Links, Episode 78, March 11, 2022

Hello, Ron Robins here. I do hope that you are ok and managing to stay calm, healthy, and focused on what positive contribution you can make to help alleviate the terrible distress in these deeply troublesome times. Investing in ethical and sustainable companies has never been more important than it is now!

Anyhow, welcome to podcast episode 78 published on March 11, 2022, titled “Top Water, Energy, Stocks and Funds” — 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 online 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 covered in these podcasts.

Also, if any terms are unfamiliar to you, simply Google them.

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1. Top Water, Energy, Stocks and Funds

Now the first article I want to review concerns the water industry — an industry receiving great attention from ethical and sustainable investors. The article’s title is 5 'Blue Economy' Stocks and Funds. It’s written by Nellie S. Huang and published by Kiplinger. Ms. Huang writes, quote…

“The blue economy represents all of the dollars spent to improve the economic growth, health and livelihood of ocean and coastal zone ecosystems… ‘You can’t have a healthy planet without a healthy ocean,’ says Louise Heaps, the head of sustainable blue economy at the global nonprofit WWF, in London…

(The article continues)…We recommend two funds that focus on water sustainability. We also found the stocks of three companies doing interesting things that will help us use water more efficiently or that go some way toward stemming water pollution. (The funds and stocks are…)

1) Fidelity Water Sustainability Fund (FLOWX)

(Is) a new, actively managed fund, focuses on firms working on solving the world's water crisis…

Industrial machinery is the fund's top industry weighting at a quarter of assets. It's followed by water utilities (17%) and electronic equipment and instruments (15%), as well as 11% of assets each in building products and industrial conglomerates.

Roper Technologies (ROP) and American Water Works (AWK) are top holdings.

(The fund) has returned 7.9% over the past 12 months.

2) Invesco Water Resources ETF (PHO)

Invesco has three water-focused exchange-traded funds (ETFs), but we favor Invesco Water Resources ETF… because it tracks a Nasdaq index that includes companies creating products designed to conserve and purify water.

Invesco Water Resources ETF is similar to Fidelity Water Sustainability Fund in that its largest asset concentrations are in machinery (27%) and water utilities (20%). However, it also has a substantial 16% invested in life sciences tools and services.

Waters Corp. (WAT) and American Water Works (AWK) top the portfolio. The fund has gained 9.4% over the past 12 months.

3) Tetra Tech (TTEK)

Is an engineering and consulting firm has big roles in many sustainable areas, including water management.

For instance, the company helped a Kentucky sewer system authority save $200 million from 2006 to date by building a high-tech, real-time system to monitor and manage sewer system overflow during periods of heavy rain…

Stifel analyst Noelle Dilts recommends the blue economy stock.

‘We believe the company is well positioned to benefit from strong secular drivers in water and environmental services, with 85% [or more] of revenues tied to these markets,’ she says.

Analysts expect the company… to deliver annual earnings growth of 9% in 2022 and 8% in 2023.

4) Danimer Scientific (DNMR)

The ocean is home to five plastic islands of floating trash; one is roughly twice the size of Texas. Danimer Scientific could help reduce that. It is developing a kind of plastic that is 100% biodegradable and compostable…

Danimer Scientific… had its initial public offering in December 2020. The company has a $409 million market value, no profits and just $53 million in revenue over the past 12 months…

Jeffries analyst Laurence Alexander rates the stock a Buy, saying that 2022 should be a ‘validation year,’ when leading brands adopt its plastic. It already has a number of well-known customers, including PepsiCo (PEP) and Walmart (WMT).

5) Deere (DE)

Excessive use of fertilizer can run off into waterways, harming plants, animals and habitats, not to mention water quality.

‘If we could just reduce the use of fertilizer, that would have the biggest positive impact on water,’ says Putnam's Collins.

Deere's ‘See & Spray Select’ technology, installed on a fertilizer sprayer, uses camera technology to identify color differentiation in the field so that only weeds get sprayed with herbicides. The system reduces herbicide use by 77%, on average…

Deere has its share of eco-bugaboos, but it’s a leader in precision agriculture – technology that helps increase crop yields and minimize the use of fertilizers, two key environmental pluses…

Credit Suisse's Jamie Cook rates the stock Outperform.” End quotes.

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2. Top Water, Energy, Stocks and Funds

Now back to familiar territory with this article titled These 2 Renewable Energy Stocks Are Too Cheap to Ignore. By Neha Chamaria and Rekha Khandelwal on fool.com. Here are some quotes from the authors on their picks.

1) Neha Chamaria recommends Brookfield Renewable Partners (NYSE: BEP)

(The) stock is finally showing some signs of life after languishing in 2021, but there's tremendous upside potential left in the stock at current prices…

Brookfield Renewable generated record funds from operations (FFO) in its third quarter, but the market paid no heed. I strongly believed it deserved better and even picked Brookfield Renewable as the only stock I'd buy in 2022 -- if I had to pick one…

Brookfield Renewable's total pipeline is… almost three times the size of its existing operational capacity, and it is this pipeline that should set Brookfield Renewable on the next growth path.

For now, the company expects to grow funds from operations per unit by 10% or more through 2026… That should translate into regular annual-dividend increases which could be as high as 9% each year. Now combine that with Brookfield Renewable's dividend yield of 3.4% and the potential gains from reinvesting those dividends, and you could well be on your way to making a fortune if you add this renewable dividend growth stock to your portfolio.

2) Rekha Khandelwal likes NextEra Energy Partners (NYSE: NEP)

The recent correction in renewable energy stocks due to concerns relating to overvaluation and rising interest rates has contributed to the fall in NextEra Energy Partners' stock. However, the company's fundamentals remain rock-solid…

NextEra Energy Partners has certain key advantages over its competitors. To begin with, it is backed by a top utility, NextEra Energy (NEE). (It) has a huge and diversified portfolio of renewable energy assets, and it's been in the renewables business for more than 30 years… NextEra Energy's investment-grade balance sheet helps it raise funds at comparatively lower costs than its smaller peers.

NextEra Energy Partners announced a distribution of $0.71 for the fourth quarter, which represents a sequential increase of 3.3%. On an annualized basis, the Q4 distribution grew 15% year over year. NextEra Energy Partners expects a 12% to 15% per-year growth in its distributions through 2024. All in all, this is one renewable energy (stock) that you would surely want to buy right away.” End quotes.

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3. Top Water, Energy, Stocks and Funds

Continuing on the theme of renewable energy is this article titled Technical Analyst Sees Lots of Upside Potential in This Alternative Energy Stock. Found on investorideas.com. Source: Clive Maund. Here are some quotes.

“Things are going well for solar stock UGE International Ltd. (UGE:TSX.V; UGEIF:OTCQB), which looks like a buy here after what is believed to be prolonged base building since it hit bottom last June after a reactive phase… There is plenty of upside potential from here, as made clear by the position of the MACD indicator.” End quotes.

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4. Top Water, Energy, Stocks and Funds

Now to one of the favorite companies by analysts featured in these podcasts. It’s covered in this article titled Why Enphase Energy Stock Soared in February. It’s by Howard Smith and again found on fool.com. Here are some quotes from Mr. Smith.

“The stock of solar system technology company Enphase Energy (NASDAQ: ENPH) had a strong month in February. Two separate catalysts were really responsible for the gains, resulting in an overall jump of 18.7% for the month, according to data from S&P Global Market Intelligence.

First, the company reported its fourth-quarter and full-year 2021 results on Feb. 8, prompting a big single-day pop in the stock. The second catalyst wasn't company-specific. Many solar and other alternative-energy stocks have soared in the final days of February as oil prices jumped on the backdrop of war in Ukraine and geopolitical uncertainty.

After having given up some gains made after its strong earnings report, (Its) shares of Enphase soared almost 32% in the last five days of the month.

Enphase reported record revenue of $412.7 million for its fourth quarter, bringing full year 2021 revenue to $1.38 billion, jumping nearly 80% over the 2020 total of $774.4 million. After generating $92.7 million in cash flow from operations, and spending $300 million in share repurchases in December, Enphase also ended the year with $1 billion in cash on its balance sheet…

For investors, the main concern with Enphase should be its valuation. At its recent market cap of $21.2 billion, shares are trading at a price-to-earnings (P/E) ratio of almost 150. While continued strong growth should bring that down over the next several years, it's an investment that comes with plenty of risk should there be any stumbles in the company's growth rate.” End quotes.

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Why Digital Realty Trust is a leading Socially Responsible Dividend (DLR) stock

Looking for dividends, then see this article titled Why Digital Realty Trust is a leading Socially Responsible Dividend (DLR) stock. It’s authored by Eleon on goodwordnews.com. Now some quotes from the author.

Digital Realty Trust Inc (Symbol: DLR) has been named one of the best socially responsible dividend stocks by Dividend Channel, meaning a stock with above average results. ‘Dividend rank’ statistics, including a high yield of 3.5%, as well as being recognized by leading asset managers as being a socially responsible investment…

According to ETF Channel’s ETF Finder, Digital Realty Trust Inc is a member of the iShares USA ESG Select (SUSA) ETF, representing 0.19% of the fund’s underlying holdings, which holds $7,077,077 in DLR shares.

The annualized dividend paid by Digital Realty Trust Inc is $4.64/share, currently paid in quarterly installments… DLR operates in the REIT sector.” End quotes.

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Recommendations Related to Australian Stocks

1. Title 2 exciting ASX growth shares for March 2022 26 February 2022 (fool.com.au). By Tristan Harrison. Quote Australian Ethical (ASX: AEF) is investing significantly for growth and is benefiting from rapidly growing FUM; (and) Airtasker’s (ART) platform gives it a high gross profit margin and it is growing quickly, particularly in the US and UK.” End quote.

2. Title 2 popular ETFs you need to know (fool.com.au). The ETFs are BetaShares Asia Technology Tigers ETF (ASX: ASIA) and Betashares Global Sustainability Leaders ETF (ASX: ETHI)

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Ending Comment

Well, these are my top news stories with their stock and fund tips -- for this podcast: “Top Water, Energy, Stocks and Funds.”

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.

Also, be sure to click the like and subscribe buttons in Apple Podcasts, Google Podcasts, or wherever you download or listen to this podcast.

And please click the share buttons to share this podcast with your friends and family. Let’s promote ethical and sustainable investing as a ‘forceful hope’ in these troubled times!

Contact me if you have any questions.

Thank you for listening.

Talk to you next on March 25. Bye for now.

© 2022 Ron Robins, Investing for the Soul.

90 episodes