Canadians: Stash This Green Energy Dividend Stock for the Long Haul

The developed world drew out lofty goals to transition to renewable energy during the 2010s. That push has started to pay off in a big way for the green energy sector. Indeed, renewable energy is the fastest growing energy source in the United States. According to a recent report from Facts&Factors, the global renewable energy market in 2019 was worth approximately $1.08 trillion. It expects the market to grow at a CAGR of 8.3% to reach $1.91 trillion by 2026.

TransAlta Renewables (TSX:RNW) is one of the best dividend stocks to target in this space. The Calgary-based company develops, owns, and operates renewable power generation facilities. Its shares have dropped 7.8% in 2021 as of close on June 29. However, the stock is still up 42% from the prior year.

In Q1 2021, the company reported comparable EBITDA of $123 million – up 4% from the first quarter of 2020. Meanwhile, adjusted funds from operations (AFFO) were mostly static at $93 million. It also announced the closing of its acquisition of the 303 MW asset portfolio. This includes 274 MW of wind capacity. The acquisition will bolster its growth strategy in the United States and Canada.

This dividend stock last had a price-to-earnings ratio of 39, which puts TransAlta in solid value territory relative to its industry peers. It also offers a monthly dividend payout of $0.078 per share. That represents a solid 4.5% yield. TransAlta offers investors exposure to the surging renewable energy space, as well as strong capital growth and decent monthly income.