What are we looking for?
Sustainable dividends from companies that are developing battery storage systems, as demand and the technology itself advance.
The screen
Ford Motor Co. shares are up strongly after it announced plans to focus on energy storage systems for business and industrial applications – and not just those for electric vehicles. The pivot reflects weaker demand for EVs, given the end of U.S. government subsidies and other supports.
The automaker plans to invest $2-billion in its Ford Energy unit with the aim of providing battery storage systems for utilities, data centres for artificial intelligence, and large industrial and commercial customers across the United States.
Battery storage systems typically store excess electricity from renewable energy sources such as wind and solar, and the systems then make it available when needed. Once a niche market, demand for the systems is expanding quickly as battery-technology costs fall alongside surging demand from AI data centres. Those energy-hungry facilities are moving to generate and then store electricity to better manage their utility costs.
From a list of established battery storage providers, we identified leaders that pay dividends. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:
- one point for five years of continuous dividend payments
- two points for more than five
- two points if the company has raised the payment in the past five years
- one point for management’s commitment to dividends
- one point for operating in non-cyclical industries
- one point for limited exposure to foreign currency rates and freedom from political interference
- two points for a strong balance sheet, including manageable debt and adequate cash
- two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments
- one point for an industry leader
Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
What we found
Our TSI Dividend Sustainability Rating System generated five stocks:
Brookfield Renewable Partners LP, based in Toronto, develops, owns and operates battery storage assets – and then locks in long-term purchase agreements with utilities and hyperscalers that include Microsoft Corp. and Google.
Capital Power Corp. is headquartered in Edmonton. Last year, it started up its first battery storage projects in Ontario. These benefit from long-term contracts with the Ontario Independent Electricity System Operator.
NextEra Energy Inc., based in Florida, is a holding company for Florida Power & Light Co. as well as a developer and operator of wind, solar, nuclear, gas and battery storage projects for customers and its own facilities. It’s at the start of a growth spurt with plans to acquire Virginia-based Dominion Energy Inc. NextEra continues to advance its clean energy transition by pairing renewable power generation with the battery storage systems it designs, builds and operates.
GE Vernova Inc., based in Cambridge, Mass., is the energy technology and infrastructure company spun out of General Electric Co. in 2024. Its battery storage solutions are used worldwide at utilities, data centres and more.
EnerSys, based in Reading, Penn., is a leader in mission critical stored energy solutions, including making and selling turnkey, utility‑scale battery storage systems.
(Note: EnerSys’ meagre dividend yield reflects the near tripling of its stock price in the past year. GE Vernova’s low yield reflects the stock price more than doubling over the same period.)
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.