Innergex is a leading Canadian independent renewable power producer that engages in the development, ownership, and operation of hydroelectric facilities, wind farms, and solar farms.
The company has operations in Canada (53% of 2020 net installed capacity), France (8%), the U.S. (33%), and Chile (~6%) which are also its geographic segments.
Innergex owns interests in a total of 75 facilities including 37 hydroelectric facilities, 32 wind farms, and six solar farms. The company has a well-balanced portfolio diversified by both location and technology.
Its operating segments are hydroelectric (29% of net installed capacity in 2020), wind (57%), and solar (14%) power generation having a gross installed capacity of 3,694 MW.
- Opportunity Score: 53
- Ticker: TSE:INE
- Sector: Utilities
- Industry: Utilities - Renewable
- Market Cap: 3.67B
- P/E: 0.00
- Dividend Yield: 3.43%
- Payout Ratio (Earnings): 100.00%
- Canadian Dividend Aristocrat: YES
- Chowder Score: Members Only
- Revenue Growth: Members Only
- Dividend Growth: Members Only
- Dividend Growth Fit: 5/10
- Dividend Income Fit: 7/10
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Revenue Growth & Market Exposure
Innergex has been a focused renewable energy player for the last three decades and is a preferred partner of choice in the development of sustainable energy projects. The company’s asset portfolio is highly diversified by type and geographies. By revenues, hydro energy is the largest accounting for nearly 50% of total revenues followed by wind (~46%) and solar (~4%).
Over the last three decades, Innergex has amassed both the expertise and scale to successfully launch major projects. With rising concerns around climate change and global warming, renewable energy sources have become viable power sources for future generations. Solar plus storage is also poised to grow by leaps and bounds given the rising demand for power and the intermittent nature of renewable energy. The company is making good progress on its upcoming solar plus storage projects in Hawaii.
Innergex sells the generated power under long-term power purchase agreements, power hedge contracts, or short and long-term industrial and retail contracts to-rated public utilities and other creditworthy counterparties. The PPAs have a weighted average remaining life of 14.4 years. Innergex’s assets are young with a weighted average age of approximately 7.7 years.
Innergex’s quarterly production was 93% of the long-term average in Q3 2020. Innergex has 100 megawatts of the development pipeline for battery storage. The company completed the acquisition of six wind farms in Idaho, totaling 138 MW in July, and signed two long-term PPAs for solar and battery energy storage projects in Hawaii in September. Innergex is also making good progress on its Hillcrest Solar, Innavik Hydro, Yonne II Wind, and Griffin Trail Wind Projects.
Innergex Renewable has a history of decent dividend growth. The company has compounded its payout at more than 3% annually, over the last five years. It last raised its dividend by 2.7% and offers a dividend yield of 3.3% currently but sports a high payout ratio. Innergex Renewable is a Canadian Dividend Aristocrat and this year marked the eighth consecutive year of annual dividend increases. It also has a share buyback program in place.
Innergex Renewable has a proven track record of growing cash flows derived from a diversified asset base consisting of wind, natural gas, hydro, and solar facilities and are secured by long-term power purchase agreements.
Acquisitions have remained an important component of the company’s business strategy and the company focuses on developing and acquiring high-quality renewable power production facilities generating sustainable cash flows and creating shareholder value in the long term. Accretive acquisitions and project development have paved the way for consistent growth for the company.
The strategic alliance with Hydro-Quebec will help Innergex to tap a bigger industrial customer base with investments in larger and diversified projects. The company has a well-balanced capital structure and attractive investment-grade credit rating that also supports convenient capital financing.
Innergex currently holds interests in ten projects under development out of which four are under construction, scheduled to begin commercial operation between 2021 and 2023. Growing demand for renewable energy, stable government policies for RE procurement, and powerful acquisitions act as strong tailwinds for Innergex.
The company is positioned well to gain from the growing trends in renewable energy. Canada currently generates 80% of its electricity from clean and green energy sources and is targeting to increase this to 90% by 2030. Hawaii currently has the most ambitious target of generating 100% renewable energy by 2050 and France continues to be a very attractive market for renewable power. The US market is also looking attractive with the election of the pro-renewable energy government.
Innergex has developed the expertise to participate in the growing market of cutting-edge technologies that will support smart power grids and facilitate the deployment of renewable energy. A global presence with 68 facilities in operation, six projects in development, and interests in numerous prospective projects grants it an edge over the competition.
Innergex competes with the likes of Brookfield Renewable Partners, Algonquin Power & Utilities Corp, Northland Power Inc., TransAlta Renewables, etc. It faces competitors ranging from large utilities to small independent power producers.
|TickerKey||Ticker||Company||Sector||Industry||Score||Quote||Market Cap||P/E||FPE||EPS||Yield Raw||Yield||PayoutRatio||Payments||Dividend||Chowder||GrowthRating||IncomeRating||Tollbooth||Ambassador||Achiever||Aristocrat||King||Country||Graph|
|TSE:BEPC||BEPC||Brookfield Renewable Partners L.P.||Utilities||Utilities - Renewable||0.38||50.95||15.01||0.00||0.00||0.00||0.0293||2.93||1.0000||4||1.22||0.0293||3||3||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
|TSE:BEP.UN||BEP.UN||Brookfield Renewable Partners L.P.||Utilities||Utilities - Renewable||0.47||48.33||13.29||0.00||0.00||-0.82||0.0309||3.09||1.0000||4||1.22||0.0948||4||4||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
|TSE:AQN||AQN||Algonquin Power & Utilitties Corp||Utilities||Utilities - Renewable||0.79||19.83||11.84||11.68||11.68||1.70||0.0384||3.84||0.4485||4||0.62||0.1286||8||8||Tollbooth - Unregulated||NO||YES||YES||NO||Canada||1|
|TSE:NPI||NPI||Northland Power Inc.||Utilities||Utilities - Renewable||0.54||42.34||9.53||24.23||24.23||1.75||0.0283||2.83||0.6857||12||1.20||0.0389||3||4||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
|TSE:RNW||RNW||TransAlta Renewables Inc.||Utilities||Utilities - Renewable||0.44||19.47||5.20||56.29||56.29||0.35||0.0483||4.83||2.6846||12||0.94||0.0608||2||4||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
|TSE:BLX||BLX||Boralex Inc.||Utilities||Utilities - Renewable||0.40||39.40||4.04||70.60||70.60||0.56||0.0168||1.68||1.1786||4||0.66||0.0490||4||3||Tollbooth - Unregulated||NO||NO||YES||NO||Canada||1|
|TSE:INE||INE||Innergex Renewable Energy Inc||Utilities||Utilities - Renewable||0.53||21.00||3.67||0.00||0.00||-0.23||0.0343||3.43||1.0000||4||0.72||0.0519||5||7||Tollbooth - Unregulated||NO||NO||YES||NO||Canada||1|
With a growing net installed capacity of over 2,740 MW, a presence in new markets, and novel technologies, Innergex is poised for rapid future growth. It has a strong core business with a proven track record and is in a good position to leverage its knowledge and customer relationships to develop new sites and benefit from its strong development pipeline of projects. Innergex will continue to grow, bolstered by the strategic alliance with Hydro-Quebec.