But regardless how laughable the Green New Deal is, one thing
she is aggressively promoting is indeed gaining momentum. This is nothing to do
with the dumb Green Plan of course as it has already started for many years but
the trend is continuing and will only grow bigger and faster. I’m talking about
the renewable energy (RE). Per International Renewable Energy Agency, the
cumulative expenses in renewable energy globally in the next few decades can
amount to $100 Trillion. While the exact number is not important, it is surely
a massive megatrend from the investment perspective that we should not ignore!
You may have also heard that Trump and Democrats have agreed to pursue $2
Trillion Infrastructure Plan for the next decade to upgrade the very crippled
US infrastructure. Although this is not a directly related to the renewable
energy, I’m pretty sure a lot of infrastructure projects will involve some RE
components and therefore this trillion dollar IP will also substantially
benefit the RE sector, although indirectly!
There are tons of different companies involved in the RE
sector and it is not an easy task for general investors like you and me to pick
out good among bad. Of course, you can simply go with the whole sector by
putting money into RE sector ETFs but I think there is a better way to invest
in it. There is a company called Hannon Armstrong Sustainable Infrastructure
Capital (HASI), which provides funds
to RE projects that are usually in a long term contract basis. Here is the brief
summary of this company:
HASI provides
capital and services to the energy efficiency, renewable energy, and other
sustainable infrastructure markets in the United States. The company's projects
include energy efficiency projects that reduce a building's or facility's
energy usage or cost through the use of solar generation, including heating,
ventilation, and air conditioning systems, as well as lighting, energy
controls, roofs, windows, building shells, and/or combined heat and power
systems. The company also focuses in the areas of grid connected projects that
deploy cleaner energy sources, such as solar and wind to generate power; and
other sustainable infrastructure projects, including upgraded transmission or
distribution systems, water and storm water infrastructures, and seismic
retrofits and other projects.
The thing I like HASI most is that this is a
company with a very diversified exposure to RE, i.e. a safer bet for this long
term megatrend. Even better, HASI is structured as a REIT and as such, it pays
a high dividend yield for investors. At its current price around $26, its
dividend yield is as high as 5%! So you are basically rewarded by its income
sharing when you are riding on this trillion dollar mega RE trend. This high
income potential can greatly buffer the inevitable market volatility and will help
you stay on the trend as long as possible!
Thanks for the insights!
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