TransAlta Renewables – monthly dividend income machine

I increased my holdings in this monthly dividend paying company on 11 September 2019. TransAlta Renewables is a renewable energy infrastructure company headquartered in Calgary, Alberta and is traded in Canadian Dollars. TransAlta renewables is the renewable energy subsidiary of TransAlta Corporation. The parent company owns roughly 61% of TransAlta renewable’s stock.

Majority of the company’s revenues comes from power generation from wind turbines (46%) and natural gas (47%). It has access to growth capital through the capital markets as well as their parent company; TransAlta Corporation. Find enclosed an investor presentation from May 2019.

Dividend: As mentioned the company pays out a monthly dividend and the current yield is ~7 %. I don’t believe the dividend will increase in the coming periods, but due to the contract length of their assets I believe that the current dividend is sustainable and attractive at these levels. The monthly dividends, stable income and low volatility gives the stock characteristics of a fixed income security, which is a great component for any portfolio.

Historically, the dividend has a 5 % annual CAGR, but the dividend did not increase from 2017 to 2019 suggesting that the future increases will be as great as in the past.