Finding a great dividend stock can be a game changer. Especially in this market. The TSX today remains just above the $20,000 mark. That’s not saying much considering 52-week highs were above $22,000.
With that in mind, finding a great dividend stock can make or break a portfolio right now. You can at least look forward to a dividend paying out each month. But only if it’s a stable dividend.
That’s why today we’re looking at a dividend stock that pays out every single month. One that has a high yield, and has a strong future ahead as well.
Considering TransAlta Renewables
Investors today should certainly take a look at TransAlta Renewables (TSX:RNW), a renewable energy stock that is currently down by 24% in the last year. The company handles a slew of renewable energy products, including renewable gas, solar, wind and electric utilities in general.
However, the company didn’t have a great end to 2022. The company stated that it believed it would reach an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $495 million to $535 million for 2023. Investors weren’t impressed by the lower numbers, which the company considered skewing even lower.
TransAlta stated that rising interest rates wouldn’t prove to be a good thing for the company. This alone could result in a huge downfall. And yet, this latest quarter seemed to put an end to that.
What’s happened lately
The news above sent shares downwards, 37% from peak to trough. Yet in the last month, shares have made a bit of a turnaround. TransAlta stock is now up 20% since the latest earnings report. So what exactly happened?
The latest earnings report saw adjusted EBITDA hit $100 million. Not the best in the world, but in line with projections. This occurred even though there were lower wind resources in Canada and the United States creating less power.
Variability of wind and water resources created these results on the low end of what was hoped for by the company itself. The company stated it was “trending toward the low end of our 2023 outlook.” Even still, this allowed the stock to remain within the realm of hitting those targets after a very tough year.
What investors may be able to lock in is a dividend stock at a great price and high yield, and with longer-term prospects. This year was difficult, very difficult. Now the future should be much easier for the stock. Especially as TransAlta stock continues to bring its development projects online across North America and Australia.
The other incredibly positive note was that TransAlta Corp. would be acquiring TransAlta Renewables. This would “simplify” the structure for long-term growth. What’s more, investors are able to note there is an “attractive premium” for the acquisition at 18.3% based on July 10 prices.
This caused shares to jump at the news, up by 20% and climbing. Yet the official undertaking wouldn’t be online until October. Therefore, there is still time for investors to get in on this dividend stock while it still has a 7.11% dividend yield. So certainly grab this monthly paying dividend stock while you can.
Before you consider Transalta Renewables, you’ll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2023… and Transalta Renewables wasn’t on the list.
The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 26 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks
* Returns as of 8/16/23
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