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As a dividend investor, part of my strategy is investing in each of the 11 sectors as featur3ed in the most commonly used classification system, the Global Industry Classification Standard (GICS).
And when I started to select the companies that I wanted to invest long-term, Atlantica Sustainable Infrastructure (NASDAQ: AY) which is part of the utilities sector and is a company based on independent power, renewable electricity but most importantly, for me, the company’s dedication to clean energy.
Based in the United Kingdom and facilities in North America, South America and EMEA (Europe, the Middle East and Africa), according to the company, Atlantica Sustainable Infrastructure’s overview is as follows:
We are a sustainable infrastructure company with a majority of our business in renewable energy assets. We complement our portfolio of renewable assets with storage, efficient natural gas and transmission infrastructure assets, as enablers of the transition towards a clean energy mix. We are also present in water infrastructure assets, a sector at the core of sustainable development.
Our purpose is to support the transition towards a more sustainable world by investing in and managing sustainable infrastructure, while creating long-term value for our investors and the rest of our stakeholders.
We currently own or have an interest in a portfolio of diversified assets in terms of business sector and geographic footprint. Our portfolio consists of 28 assets with 1,591 MW of aggregate renewable energy installed generation capacity (of which approximately 90% is solar), 343 MW of efficient natural gas-fired power generation capacity, 1,166 miles of electric transmission lines and 17.5 M ft3 per day of water desalination. We own and manage operating facilities in North America, South America and EMEA. We intend to expand our portfolio, while maintaining North America, South America and Europe as our core geographies.
Source: Schwab.com
Atlantica Sustainable Infrastructure PLC is currently at $36.84 a share (a 52-week range of $26.15 and $48.49). It received a Schwab Equity Rating International grade of D, Ned Davis Research has it at “Neutral”, CFRA’s Opinion set as “Buy”, Reuter’s Research Averaging Rating at “Outperform” and a Market Edge Second Opinion at Neutral.
The company has a market cap of $4.1 billion and an enterprise value of $9.2 billion. With 110.7 million shares outstanding and 43% held by institutions.
For the most part, the stock was around $37.00 from 2014-2015 but dropped in Q3/Q4 in 2015 of under $15 until remaining consistent at under $20 until jumping to $32 in January 2020 and then the pandemic hit and the company, like many companies had fallen. For AY, it did not drop under $20 and reached nearly $47 in January 2021 before falling to its current price under $40.
As we go back to Schwab’s “D” rating, the rationale for the D is because of the company’s financial liabilities due to long-term debt which reduces income.
As of March 2021, the primary holders of AY in their portfolio is BlackRock Inc. (7,482,998), Morgan Stanley (5,825,221), Wellington Management Group, LLP (4,844,811), Kayne Anderson Capital Advisors LP (3,269,227), Invesco Ltd. (2,499,767) and Goldman Sachs Group Inc. (2,059,296).
The following three ETF’s have the highest amount of shares of AY. Invesco Solar ETF (TAN) has 3,527,536, iShares Global Clean Energy ETF (ICLN) has 2,694,185 shares and Vanguard Explorer Fund (VEXPX, VEXRX) has about 1,979,861 shares.
Atlantica Sustainable Infrastructure PLC offers an annual dividend of $1.72 per share with an annual dividend yield of 4.69%. It’s previous ex-dividend date was May 28th and payable on June 15th. But of the different companies that specialize in green infrastructure, AY offers the best yield.
There is no doubt that the stock catches the attention of dividend investors. Despite the downturn of 2016, the company has increased its dividends each year since 2017.
But for me, I like the fact that the company has managed to do well during the Pandemic and that people believe in green infrastructure. From the company’s investment towards renewable energy, such as solar and wind, natural gas, water and more.
This is a global company with revenues from the United States, Europe, South America and other parts of the world.
For the most part, my reasoning of investing in Atlantica Sustainable Infrastructure PLC is that I am a believer in renewable energy. A believer in clean energy and I do believe that the company has a lot of potential. And I find it interesting because there are those who dislike green infrastructure, people who are not a believers in sustainable energies and when the topic of climate change comes up, they could care less.
I understand, there are two differing sides,those who believe in climate change, those who don’t. Those who believe our planet is dying, others who don’t. Those who believe in the old ways of coal, nuclear and oil as primary sources of energy. I’m a believer that just because certain energy sources were popular a century ago, we must find ways to improve. Not just for our future, our children’s future but also for the future of our planet.
As for Schwab’s concern about AY having a moderately high debt level and how AY’s cash flow is tied to inflation.
I am liking how AY is performing, their consistent increase in dividends and a good yield at 4.69% and at $36.90 or less, that’s a very good value. So, I do like what I see today and the next 5-10 years for sustainable energy.
But there is risk as the green infrastructure and sustainable energy is a changing industry and so it becomes important to do your evaluation and report card and be on top that Atlantica Sustainable Infrastructure PLC evolves and consistently improves its infrastructure with newer technologies and not be stuck with old, aging assets if you plan to hold on to AY for long-term.
I intend to hold it for long-term but also doing my due diligence to study and make sure that the industry continues to thrive and that Atlantica Sustainable Infrastructure PLC remains continues upward growth and consistent, growing dividend payouts.
As always, perform due diligence and do a lot of research before investing. Talk to a financial advisor and find out if investing in Atlantica Sustainable Infrastructure (NASDAQ: AY) would be a perfect investment for you.
