Clean energy stocks are well-positioned to take advantage of Prime Minister Mark Carney’s goal to make Canada an energy superpower, reduce reliance on the United States, and expand access to clean power across the country. To find the best opportunities, we screened the leading Canadian renewable energy companies covered by Morningstar analysts with 4- or 5-star ratings, meaning they’re trading at a meaningful discount to their fair value estimates and offer a margin of safety.
These companies are leaders in Canada’s renewable energy sector. Backed by strong balance sheets and geographically diversified, they are well-positioned to benefit from the global pivot toward clean energy.
Brookfield Renewable Partners BEP.UN Northland Power NPI Boralex BLX
Brookfield Renewable Partners
Renewable energy major Brookfield owns and operates clean energy assets with a global footprint. Its portfolio comprises hydroelectric, wind, and solar energy production, and storage facilities in North America, South America, Europe, and Asia.
“Brookfield Renewable’s portfolio has historically been heavily weighted toward hydro generation, but that has changed in recent years, given outsize growth in wind and solar. Hydro has decreased from approximately 80%-85% of the company five years ago to below 40% in 2024. We expect hydro to continue to decline as a percentage of cash flow over time, given relatively limited growth opportunities when compared with wind and solar. Solar has increased to approximately 20% of the portfolio in 2024, and management has outlined robust growth plans, expecting it to be the largest energy source in the long term.
“In addition to renewable energy assets, Brookfield Renewable expanded its investment scope in recent years to include broader energy transition asset classes. This includes novel areas, such as carbon capture, as well as traditional fossil fuel and nuclear power generation.”
Read Morningstar’s full report on Brookfield Renewable Partners.
Northland Power
A global clean power producer Northland develops, owns, and operates renewable power infrastructure assets. Beyond a strong Canadian presence, the company has grown its global footprint over the past decade, with a focus on offshore wind. Northland continues to pursue this strategic vision and is a leader in the offshore wind industry.
“Offshore wind is expected to remain the backbone of Northland’s investment outlook. The company’s portfolio today is relatively concentrated, with three operating projects in the North Sea. However, its development pipeline gives line of sight to greater diversification via growth in Asia, Poland, and additional North Sea projects. We view Northland’s success in being a first-mover in offshore wind as indicative of its strong development capabilities, particularly in light of its scale limitations relative to peers.
“Northland is embarking on a period of high capital investment as it seeks to build out its next wave of offshore wind projects. Total capital investment during 2023-27 is expected to be C$16 billion-C$ 19 billion on a gross basis. Northland has effectively utilized acquisitions of early-stage offshore wind projects, coupled with its development capabilities, to establish itself as a first-mover in the industry. In addition, the company has used acquisitions to bolster its onshore renewables presence, as evidenced by its 2021 acquisition of Spanish wind and solar assets. The company tries to focus on markets where it can leverage its strengths and to avoid markets with a high cost of entry, such as US offshore wind.”
Read Morningstar’s full report on Northland Power.
Boralex
Leading Canadian power producer Boralex develops and operates renewable energy power stations across Canada, France, the US, and the United Kingdom. The company generates wind, solar, hydroelectric, and thermal energy. Almost all of its energy assets sell power under fixed-price contracts, providing steady, predictable revenue regardless of market fluctuations.
“Boralex unveiled 2030 business and financial targets at its June 17 investor day. The firm plans to double installed capacity to approximately 7 gigawatts and increase EBITDA and discretionary cash flow per share at an 8%-10% compound annual growth rate.
“Boralex’s 2025 strategic plan and 2030 targets call for an acceleration of growth and increasing diversification. With regard to technology, Boralex’s history has focused on onshore wind development, which constitutes over 80% of capacity installed as of 2022. However, Boralex’s 2030 ambitions call for solar capacity to equal wind as the company looks to expand its presence in US solar. In addition to diversification by technology, Boralex’s strategy is focused on expanding beyond its current core markets of Canada and France, which have historically accounted for nearly all of its installed capacity. The company is seeking to increase its presence in other European countries and the United States. It projects the US to be its largest market by installed capacity by 2030, up from 24% in 2022.”
Read Morningstar’s full report on Boralex.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
