Energy company Clearway Energy is one of the beneficiaries of the massive clean energy transition. Expansion of ongoing projects, reorganization of the structure, and improvement of profit indicators will allow the company to increase payments to shareholders until at least 2026.
In the first quarter, Clearway Energy posted adjusted EBITDA of $260 million, up over 31% year-on-year. The main growth driver was increased investment in solar energy projects for utilities. This helped offset the weaker-than-expected performance of the wind portfolio.
Cash available for distribution (CAFD) was minus $2 million at the end of the quarter, but this is an improvement from minus $15 million a year earlier.
Clearway Energy recently announced the sale of its thermal business, with the proceeds to be used to repay temporary corporate loans and invest in new projects.
The company believes it can channel those earnings into new investments to make up for lost revenue and other losses. This should give Clearway Energy the ability to secure dividend increases over the next few years.
A growing portfolio of investment opportunities gives the company confidence in its long-term prospects. Clearway currently has approximately $600 million in development investments.
Management says the company may increase its dividend from 5% to 8% until at least 2026. The company recently expanded its payout by another 2%, raising its dividend yield to 4.5%.