Clearway dividend and GRoDT news ?3

11:54 16-Feb-21

For the record, my expectation below was wrong in that Xebec did respond, saying:

The investment in a hydrogen DPH can range between $3 to 6 million initially. And can gradually be expanded to $10 to 15 million based on growing regional offtake. This growing offtake can occur because we sign more industrial on-site customers or because we can expand the DPH with hydrogen vehicle filling capabilities.

We’ll be providing a full presentation on this and the strategy later in the year which will help lay this out to investors more clearly.

That's quite modest, but the lack of specificity doesn't jive with the start of construction.  My guess is that the JV partner, Buse Gases, already owns the land and infrastructure.  This seems like a smart approach, but we'll have to wait for further detail, and better pricing on the stock.

Clearway Energy has announced a 0.6 cent increase to its quarterly dividend ahead of its earnings report.  The 32.4 cent payment will have a February 26th ex-date and results in forward yield of 4.2% at the current CWEN(A) price of $30.64. 

It's good to see Clearway continue its dividend increases and deliver on management's projections of nearly 8% dividend growth through the remainder of this year.  The stealth inflation environment is supporting the stock price for now.  However, I have at least slight concern about the effects of the power crisis on the company's diversification into Texas and other affected states.  Clearway is insulated from the increase in natural gas prices back above $3, and pushing legacy fuels is clearly an argument that only the prior administration would attempt to justify.  I expect we'll hear if there is any impact with the next report in about two weeks.  I plan to add new Yield investments by then.

The big picture in my eyes is that the region is paying the price for leaving grid improvements like the Tres Amigas project that I used to track in conjunction with Amsc to languish.  Perhaps that project will be resurrected now, but I'm still not buying AMSC anywhere near current prices.

In more typical GRoDT news, Resonant has formed a Technical Committee on its Advisory Board.  To me the additions seem aimed at improving the company's design software.  That could be a sign of new or expanded agreements to come, but it also shows how Resonant has largely failed to be first to market in the most important areas.

Last, and least to me, is a press release from Xebec which recycles HyGear's hydrogen wins and development plans in the U.K.  It completely fails to provide any detail on revenue for the supply agreements or CapEx for the JV, and my question to IR on those points has gone unanswered so far.  Unlike prior queries, I expect that will continue to be the case, but that the stock price will hold up as long as the market does, which isn't comforting at all.