Invest in the environment

Whoever thought that making America great again would require a return to the huge carbon-spewing smokestacks of the Midwest that blanketed southern Ontario with smog?

Or to algae-clogged rivers with banks lined with the bodies of oxygen-starved carp, bass and other fish?

Or to beaches where the E. coli count is so high that no caring parent would allow a child to go anywhere near the water?

Or to deep-pit coal mines where workers spend their working hours breathing toxic dust and risking cave-ins?

No one except Donald Trump and his most ardent supporters seems to feel that’s an America we want to return to. But he’s president of the United States and that’s the course he has mapped out with his withdrawal from the Paris cli- mate accord.

During the election campaign, Trump branded climate change as a “hoax” created by the Chinese to undermine American industry. He apparently still thinks that way, judging by the refusal of the president or anyone on his staff to say anything different.

The rest of the world, with Canada at the forefront, says it will get on with implementing the Paris agreement, even without U.S. participation. But it will be a tough fight without the involvement of the Earth’s richest nation and one of its major polluters.

So what can we do as individuals to help thwart Trump’s backsliding in our own small way? We can invest some of our money in clean-energy businesses, not just out of a sense of altruism, but with the goal of making a nice profit while helping to reduce emissions in our own small way. Here are three companies you might want to look at.

TransAlta Renewables Inc. This little-known Calgary company is one of the largest publicly traded renewable energy producers in Canada. It has interests in 18 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities (including one currently under construction) and one natural gas pipeline. That represents 2,441 megawatts of net generating capacity, geographically dispersed among five provinces, the state of Wyoming, and the state of Western Australia.

The company’s objective is to invest in stable renewable and natural gas power generation facilities with long-term contracts and predictable cash flow. It pays out 80 to 85 per cent of cash available for distribution in the form of dividends.

This stock has been a winner for readers of my Income Investor newsletter. I first recommended it in November 2013 when it was trading at $12.12 and paying an an- nualized distribution of $0.77 per share for a yield of 6.4 per cent.

At the time of writing, the share price was up to $16.04 and the annual dividend had increased to $0.88, for a yield of 7.3 per cent based on the original recommended price. Who says you can’t make any money investing in clean energy?

The company is doing well financially. First-quarter revenue was up almost 90 per cent from the same period in 2016.

TransAlta Renewables reported a profit of $27 million ($0.12 per share), a big improvement over a year-ago loss of $36 million (-$0.16 per share). Brookfield Renewable Partners This Bermuda-based limited partnership is a spinoff from Toronto’s Brookfield Asset Management, which owns a majority stake. It holds a portfolio of hydroelectric and wind facilities in North America, Latin America and Europe with more than 10,000 megawatts of installed capacity.

This partnership has also been a winner for investors. I first recommended the units (which I own myself) in July 2009 at $16.62, when it was trading under the name Great Lakes Hydro. At the time, the annual distribution was $1.26. The price is now up to $42.79 and the distribution has increased to $1.87 (U.S.) a year.

Brookfield continues to expand its output. In the first quarter, its share of power generated by the assets in its portfolio was 6,161 GWh, up 4.5 per cent from the year before. On the financial side, profit dropped from the year-ago period but management reported a strong balance sheet with $1.6 billion (U.S.) in liquidity available for new acquisitions and expansions.

Of special interest to income investors is the fact that Brookfield has set a target for annual distribution increases of between 5 and 9 per cent. Innergex Renewable Energy This Quebec-based company is into all three major areas of renewable power generation: wind farms, hydroelectricity and solar photovoltaic farms. It operates in Quebec, Ontario and British Columbia, as well as in France and Idaho.

Its price has not increased much since I recommended it in July 2016 at $14.59 (it was $14.77 at the time of writing).

But Innergex has been a dependable cash producer, with quarterly dividends of $0.165 per share, up from $0.16 last year. The yield is 4.5 per cent.

On the financial side, the company is not as healthy as TransAlta or Brookfield Partners, having posted a first-quarter loss of $2.3 million (-$0.01 per share) compared to a profit of $7.2 million ($0.07 per share) in the same period of 2016.

Management said the drop in earnings was attributable to a $9.8million increase in finance costs and the $10.1-million increase in depreciation and amortization.

However, output and revenue continue to grow as Innergex expands on several fronts. During the first quarter, it completed the acquisition of the 44-megawatt Yonne wind farm located in northern France, in which it owns a 69.55per-cent interest (Desjardins Group Pension Plan owns the rest). Subsequent to that, Innergex and Desjardins teamed up to buy three more wind projects in France with a total installed capacity of 119.5 MW.

Innergex also began commercial operation of the 81.4 MW Upper Lillooet River hydroelectric facility located in British Columbia.

Companies such as these (and there are many more) are leading the way in the expansion of clean power generation, both in Canada and other parts of the globe. Trump may want to retreat into his own personal dream world where coal is once again king and the polluters have free rein, but that is not going to stop the energy revolution that is underway.

Interestingly, the shares in all three of these companies were higher on the day after the president announced he was pulling out of the Paris accord.

That was the market’s way of telling Mr. Trump to stuff it!