Clearway Energy Eyes Robust Dividend Growth Through 2026

Clearway Energy's strategy to grow dividends between 5-8% annually through 2026 signals strong returns for investors. The report highlights new investments and a solid cash flow projection, making it an attractive income investment opportunity.

Date: 27-11-2024

AI Rating: 8

Dividend Yield and Growth

Clearway Energy (NYSE: CWEN) offers a compelling dividend yield of nearly 6%, significantly higher than the S&P 500 benchmark of around 1.2%. This indicates a strong incentive for income-focused investors to consider Clearway over more traditional stocks.

Cash Available for Distribution (CAFD)

The report estimates that Clearway's cash available for distribution (CAFD) will reach approximately $2.08 per share in 2025, with projected growth of 7.5% to 12.5% in 2026. This trajectory sets the stage for anticipated dividend growth of 6.8% in 2025 and 6.5% in 2026, suggesting a robust financial outlook.

Strategic Investments

Clearway Energy's strategy to sell thermal assets, raising nearly $1.4 billion, allows for reinvestment into higher-return renewable energy projects. The expectation that investments will yield additional CAFD starting in 2026 reinforces confidence in future cash flows and dividend consistency.

Future Outlook

Contracts for power sales are secured for 93% of capacity for 2026 and 63% for 2027, providing strong visibility into future earnings. This proactive approach underlines Clearway's ability to navigate the energy market effectively.

Rating Considerations

The overall sentiment for Clearway Energy based on this report is quite positive, reflecting a strong commitment to consistent dividend growth backed by strategic investments and solid operational planning.

Stocks: CWEN