When it comes to companies in the energy space attention turns to Origin Energy Ltd (ASX: ORG) – a hands down monopoliser. But Origin relies heavily on oil and gas, and we all know how uncertain the future is for that sector. Energy peer AGL Energy Ltd (ASX: AGL) appears to be more centred on renewable energy generation, including hydro, wind, landfill, gas, solar and biomass. Is the $14.36 billion market cap company AGL leading the way for emerging renewable energy players in the smaller end of town? There are several companies listed on the ASX focused on renewable energy…
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When it comes to companies in the energy space attention turns to Origin Energy Ltd (ASX: ORG) – a hands down monopoliser.
But Origin relies heavily on oil and gas, and we all know how uncertain the future is for that sector.
Energy peer AGL Energy Ltd (ASX: AGL) appears to be more centred on renewable energy generation, including hydro, wind, landfill, gas, solar and biomass.
Is the $14.36 billion market cap company AGL leading the way for emerging renewable energy players in the smaller end of town?
There are several companies listed on the ASX focused on renewable energy sources and harnessing innovation and technology to meet the energy need of the future.
No one can guess what the energy sector will look like in the future, but these 3 companies are powering ahead in the push to redefine it.
Is it a good time to jump on the bandwagon now?
Infigen Energy Ltd (ASX: IFN)
Infigen owns and operates renewable energy generation assets in Australia with six wind farms in its portfolio.
Share prices have been volatile for Infigen in the last 12 months, but things appear to have been tracking upwards for the $715 million market cap company of late with shares sitting down 1% at 72c per share at the time of writing.
Infigen recently reported $48.4 million revenue for the third quarter of FY18, down slightly from $49.2 million in the previous corresponding period.
Infigen seems pretty focused on gaining supply contracts at present, but its pipeline of projects includes another wind farm in NSW with 41 turbines and several solar farm developments.
While it’s too early to determine if Infigen will make it big, they certainly appear to be getting the fundamentals right, with what looks to be a strong strategy for growth and expansion.
One to keep on the watchlist.
Pacific Energy Limited (ASX: PEA)
Perth based power generation project developer Pacific Energy Limited is focused on the development and maintenance of mine site and renewable energy power stations and operates the Kalgoorlie Power Systems and Victorian Hydro Generation businesses.
Pacific shares have been on the decline for most of the last 12 months but have begun to climb back from the bottom recently with share prices up 1.7% to 59c per share at the time of writing.
Given the boom we have seen in the commodities sector over the last decade, with the likes of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) leading the way, a company like Pacific – focused on providing remote mining power capabilities – would appear to have a bright future on the horizon.
Pacific’s half-year results showed a 3% uptick in revenue to $30 million with EBITDA down 4% to $20.3 million, but overall its balance sheet looks to be in good shape to support significant growth plans which has recently included two acquisitions – NovaPower for $7.9 million and Contract Power for $90 million.
Pacific is still only a $223 million market cap company, but it seems to have some well-planned strategic plans in the pipeline with a diverse customer mix including Regis Resources Limited (ASX: RRL), Sandfire Resources NL (ASX: SFR) and Saracen Mineral Holdings Limited (ASX: SAR).
All Pacific really needs is a couple of big-name contracts to really see it fly, and if it can keep its current customers happy, that might just happen sooner rather than later.
Windlab Ltd (ASX: WND)
Internationally focused renewable energy development small cap Windlab Ltd oversees the conception, construction and operation of global wind energy projects – a niche offering that could see sky rocketing demand in the future as renewable energy players assert their dominance in the sector.
Windlab shares were up 4.8% to $1.62 at the time of writing – zooming up from $1.51 on May 28 to close May 29 at $1.66.
Windlab is a truly speculative pick right now, but the highlights of its AGM looked promising back in April with NPAT up an impressive 188%, operating cash flow up a whopping 775% and EBITDA rising 161% while debt fell 68%.
Windlab’s bottom line has benefited from the financial close of Kennedy Energy Park and Coopers Gap.
All-in-all this small cap seems to be scaling up pretty consistently and is one to keep an eye on if you’re seeking out a potential future goer in the space.
Energy stocks are definitely blue chips in the eyes of many, alongside their banking and commodity cousins.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.