The Motley Fool

Why the AGL share price could rocket in the next decade

The AGL Energy Limited (ASX: AGL) share price has been an underperformer so far this year.

The group’s shares are up just 3.79% compared to the 23.24% delivered by the S&P/ASX 200 Index (INDEXASX: XJO) this year.

Its relative performance hasn’t been too flash either, with fellow ASX-listed energy giant Origin Energy Ltd (ASX: ORG)‘s shares surging 39.08% higher in 2019.

So, why could AGL be in a great position to rocket higher over the next decade?

The renewables boom

According to an article in the Australian Financial Review (AFR), Australia’s economy could benefit significantly from further renewables investment.

Modelling by PwC and Jacobs shows more renewables projects and an upgrade for the national power grid would add $13 billion to Australia’s GDP over two decades.

Supporting Australia’s coal-fired electricity plants would halve those economical benefits.

AGL shareholders could be in the box seat to benefit from such a boom. The company is already invested in renewable energy projects across Australia.

The group is the largest ASX-listed investor in renewable energy and a partner in the Powering Australia Renewables Fund (PARF).

As one of the largest energy groups in Australia, alongside Origin and EnergyAustralia, AGL could benefit from further projects.

AGL shares have struggled to climb higher in recent times, largely due to weak earnings. The group has pointed the finger at the Federal Government and its battles are well-documented.

The large energy companies have complained about the lack of consistent, long-term energy policy in Australia. Now that the Coalition has been returned and we enter a new year, energy policy could be on the agenda.

Will the AGL share price rocket higher in the 2020s?

AGL shares have struggled in 2019 but I think their big break could be just over the horizon.

The energy group is well-placed in the national energy market and has the resources to invest further.

Once Australia’s energy policy environment has been clarified, I’d expect AGL to be investing for the long-term.

That could make AGL shares a great buy-and-hold option for the next decade and invest in the renewables boom.

If you're not interested in holding AGL shares, check out these 3 top dividend shares as an alternative!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Kenneth Hall 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.