Boralex Inc. (BLX-T)

Big driver in the space is going to be interest rates, and we're potentially seeing a shift to a better rate environment. The entire space is seeing improvement. Doesn't mind nibbling at these levels. One of the laggards, and he usually looks for leaders.

Canada's leading renewable energy company. Are strong in Quebec, US and France in wind, but solar and energy storage are growing. Recommended it because all utilities were beaten down. It hit $36 before Trump was elected. However, energy demand is increasing. BLX has fine free cash flow generation and a pipeline that will double capacity in coming years. Revenues and EBITDA will jump 25% this year. Trading at historically low valuations.

By far, best performer in the space. Great growth in EBITDA, good balance sheet, great management.

This is how he'd play the renewable energy trade. Thinks rates will go higher next year, which makes him cautious. If that's the case for rates, a lot of the bond proxies like utilities and REITs are going to come under pressure. A bit more upside potential, but for a trade.

Power generation, in multiple different ways. Really embraced clean energy, which he's all for as an idea, but not as an investment. Cost of financing new projects has gone up measurably with higher rates, and the payback time is very long.

Leading renewable energy producer. Mainly in wind, solar. Robust pipeline of storage projects expected to double production capacity. Valuations in space have been crushed. By far, best in the sector. Very high-quality assets, best management team. Multi-decade growth and tailwinds. 

Great entry point at historically low levels of 9x EBITDA. Recent record results, 22% growth in EBITDA. Strong free cashflow. Yield is 2.3%.

Very good Q1 results. Full pipeline of fully contracted projects. Won 2 large storage projects in Ontario. Expects production to double within next few years. Rising rates have been an overhang on the sector. Great growth ahead.

Between the March 28 budget till the eve of Good Friday, BLX rallied 9.2% while Algonquin Power (surprisingly) rose 6.1% and Northland Power 2.1%. Since February 24, Boralex has soared 20%, also outpacing its peers. Read Dark horses: Nuvei, Cineplex, Boralex for our full analysis.

None of the renewable businesses are under pressure on the dividends, but it's the valuations. He likes them for growth and ESG reasons, but hasn't made the switch. Once he did make the switch, BLX would be one of the first names on his list.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. In a volatile market, anything is possible. However, they still like it. The cash flow is stable and the growth potential may attract interest in a choppy backdrop. Unlock Premium - Try 5i Free