2 Dividend Paying Energy Efficiency Picks

Charles Morand recently recommended a few dividend paying alternative energy companies as safe havens in the current turmoil. Since I've been thinking along the same lines, I thought I'd add my own picks. I currently like energy efficiency companies with solid balance sheets, because I believe that Obama's fiscal stimulus will contain significant money for green, energy-efficiency related jobs.

That said, here are two I'd add to Charles' list. These two also have the advantage of being pure-play (or nearly pure-play) bets on clean energy.

Name	Ticker	Yield	Focus	Related Articles
Waterfurnace Renewable Energy	WFFIF.PK	3.27%	Geothermal Heat Pumps	Wind and Heat Pumps
New Flyer Industries	NFYIF.PK	17.7% (based on 12x last monthly distribution)	Bus manufacture	New Flyer Industries

The New Flyer yield is not strictly a dividend payment. This is an "income deposit security" paying a blend of interest on a subordinated bond plus a cash dividend. The dividend varies from month to month, based on earnings, but currently about two-thirds of the distribution is interest.

DISCLOSURE: Tom Konrad has owns shares of WFI and NFI-UN.

Comments

[DonSuper:]

Thanks Tom for the recommendations...I remember reading an article you wrote where you mentioned New Flyer, I did DD, and bought some shares. I think it's a good company, the only thing is that I see little gowth, capital intensive, and there is always the risk of a strike. But the yield looks relative safe IMHO, and they seem to have good management.

One question I do have is, what do you think will happen after 2020 after the subordinate notes mature (or 2012 when they can be called)?

2008 Dec 05 09:53 AM

[Chris B:]

If you're interested in geothermal heat pumps, check out LSB Industries. They are flush with cash and profitable. In particular, check out how they just took advantage of this market and bought back $17M of their own debt for just over $11.6M. Ha! Classic! They made 40% ROI with no risk AND eliminated some convertibles. They're also taking this opportunity to buy back their common stock (the company itself and the insiders are buying).

They don't pay a dividend, but in this market shareholders should be demanding that companies find more productive uses for capital, just like LSB did!

2008 Dec 05 02:25 PM

[olrick:]

I've held some WFIFF.PK for a couple years and think they have a fine business model, even if gaining wider geographic coverage has been slow. Certainly, lower heating oil and gas prices are a negative relative to the cost of installing a geothermal system, but that should only be a one or two quarter issue, as fuel prices are bound to rebound....

2008 Dec 16 08:22 AM