By investing in companies that are part of the clean energy sector, you can gain exposure to stocks that are poised to grow revenue and earnings at a steady pace over the next decade. The artificial intelligence megatrend will accelerate the global shift to clean energy solutions, driving TSX stocks like Boralex (TSX:BLX) is currently a top investment.
With a market cap of $2.9 billion, Boralex stock has returned more than 500% to shareholders in dividend-adjusted profits since 2001. Despite the stellar returns, TSX stock is down 49% from all-time highs, leaving you to buy the dip.
Boralex develops, builds and operates energy generation and storage facilities in North America and Europe. It ended 2024 with 103 wind farms, 13 solar facilities, 15 hydroelectric power plants and two storage units with an installed capacity of 1,819 megawatts (MW) in North America and 1,343 MW in Europe.
A bull case for this sustainable energy share
Boralex presented an ambitious growth strategy at its Investor Day 2025, aimed at doubling installed capacity to seven gigawatts (GW) by 2030 through organic development. The Quebec-based renewable energy producer operates 3.3 GW in Canada, France, the United Kingdom and the US, with 93% of sales contracted for an average remaining term of eleven years. Management aims to extend this to 14 years by 2030, increasing revenue visibility.
Based on the middle estimate, Boralex predicts that operating income will grow 8% annually through 2030. It estimates that EBITDA (earnings before interest, taxes, depreciation and amortization) will exceed $1 billion during this period, indicating annual growth of 9%.
Notably, management has directly linked employee compensation to adjusted funds from operations per share growth, aligning incentives with shareholder interests. The plan maintains a disciplined minimum project return of 10% to 12% internal rate of return.
Boralex identified $6.8 billion in capital deployments for projects slated to enter service before 2030, with $5 billion financed through project-level debt.
It secured $1 billion in financing for battery projects in Ontario and Des Neiges’ wind portfolio in Quebec. Management plans $900 million in capital recycling to address the valuation gap between private and public markets, following the successful sale of 30% of the French operations to Swiss partner EIP.
The pipeline includes nearly eight gigawatts of projects with major developments, including 655 megawatts of battery storage in Ontario, the 1,200 megawatt Des Neiges wind project in Quebec and 450 megawatts of solar in New York that has already been announced.
Quebec is a key growth driver where Boralex aims to capture a third of the 10-gigawatt wind market by 2035. The company highlighted deep community relationships and First Nations partnerships as competitive advantages, enabling project implementation.
Management acknowledged the uncertainty surrounding rates, but noted that most U.S. projects benefit in the near term from safe harbor provisions that protect investment tax credits.
Is TSX stock undervalued?
Analysts who follow the TSX stock predict that revenue will grow from $817 million in 2024 to $1.56 billion in 2028. During this period, adjusted earnings are expected to rise from $0.62 per share to $1.80 per share.
Additionally, Bay Street expects free cash flow (FCF) to increase from $17 million to $358 million. The company’s annual dividend cost is approximately $68 million, indicating a payout ratio of 43% in 2025 and 19% in 2029.
If the TSX dividend stock is priced at 12 times FCF forward, it should gain more than 60% within the next three years. If we adjust the dividends, the cumulative return could be closer to 70%.
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