Innergex Renewable is the smallest,but yet a quality utility in the Index

Innergex Renewable Energy (INE) is considered the smallest utility on the TSX index.It and Boralex are both fairly new entrants to the TSX Index and both are headquartered in QuebecAlso both have a portfolio of all noin-renewable assets..INE only generates non-renewable energy, that is, energy from hydro,solar and wind power.It has a market capitalization of about $1.5 billion.This compares to utilities such as  Fortis or Emera which have market caps of $27 billion and $13 billion respectively.And both INE and BLX are adding new facilities to increase their total energy outage.INE has installed capacity of 4266 MW.It has 85 operating facilities with 13 projects under development.It has in a few years more than tripled it's power generating capacity.Most of it's projects are in Quebec with a few in Chile.And a significant percentage comes from hydro power.

     Performance in 2023

   2023 was not a great year for North American utilities.Even those with substantial inreases in performance did not get substantial increases in share price.As interest rates were high and investors did not want to bid up share prices of utilities with relatively high yields.Instead investors ploughed money into high grade bonds.While in 2023 INE added to it's stable of non renewable assets.For example, it completed an acquisition of a 60 MW facility in Ontario and built it's first storage facility in Chile.It also adbvanced on the construction of it's 330 MW facility in Boswell Springs in Wyoming.And it started delivering power on it's 7.5 MW Innavik hydro project in nortern Quebec.As hydro is a significant part of the INE portfolio of non renewable assets.
                                                               

             Growth versus Earnings

   Innergex  has grown rapidly in the past 5 years.Still it's market capitalization is about half of the next biggest utility on the TSX index which is Boralex, another Quebec based utility.And INE has made a concerted growth effort in 2023.In addition, it has made a partnership with a French financier called Credit Agricole Assurances.But it has not done as well with improving it's  earnings.It has showed negative earnings since 2019.Each year it has large and growing interest expense.Also it has a large debt/equity ratio.It is not likely to show substantial share price increases until it's debt has been pared down and there are decreases in interest expense.As increases in revenues have ben matched by increases in interst expense.This blog sees INE moving in a tight range around it's present share price in 2024.
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 Dale Mcintyre M.S.Sc.(econ) is a freelance writer that writes primarily  for Zacks Researchy.