RE Royalties: Share Price Fails to Reflect Successes
RE Royalties provides capital to developers and operators of renewable energy projects. The company combines secured interest-bearing loans with royalties, which represent a share of project revenues. This gives customers a financing alternative that does not require them to give up equity in their companies, while the Canadian company generates attractive returns.
RE Royalties continues to systematically expand its international portfolio, which comprises more than 100 royalty interests. The Canadian company recently secured a long-term revenue share in nine operational rooftop solar installations in the Philippines for USD 1.5 million. A biomethane project in Wisconsin shows how the business model can work. The USD 4.6 million loan has been repaid in full, while the contractual royalty payments will now continue for another 10 years.
The collaboration with Solaris Energy promises additional growth. RE Royalties has invested a further USD 1 million in revenue shares in Solaris Energy’s US solar portfolio, increasing its exposure to USD 4.8 million. A non-binding letter of intent with Solaris opens up additional financing potential of USD 62.7 million for 96 further projects with a combined capacity of around 190 MW.
The share is currently trading at CAD 0.28, valuing the Canadian company at CAD 12 million. Investors also benefit from an annual distribution of CAD 0.04, a dividend yield of well over 10% p.a. The review of strategic alternatives initiated in March could bring movement in the future. Given the company’s low valuation, a review was commissioned together with PwC Corporate Finance to examine new financing options, strategic partnerships and a possible sale of the company, thereby creating shareholder value.
Nordex: More than 50% upside potential?
Nordex earns revenue from the development, manufacture and installation of onshore wind turbines as well as their maintenance. Its customers are project developers and operators. The shares have performed well in 2026 and, at the current price of EUR 38, show a gain of just over 30% since the start of the year. In mid-October, the company raised its 2026 EBITDA margin target on the back of a better-than-expected third quarter. All other guidance metrics remained unchanged.
According to the preliminary figures published on October 15, Nordex generated revenue of around EUR 2.19 billion and operating earnings (EBITDA) of EUR 278 million in the third quarter. The margin climbed to 12.7% in the reporting period. Higher service profitability and better project execution contributed to this. Management has now set an EBITDA margin of 11.5 to 12.5% on revenue of EUR 8.2 to 9.0 billion as its target for the current financial year. The northern German company will present its final quarterly figures on November 5.
With a 2027 P/E ratio of 14, the stock is moderately valued. On average, analysts set a price target of EUR 51, representing upside of over 30%. Some experts are considerably more optimistic. Berenberg recently raised its price target to EUR 61, citing several reasons. Nordex is demonstrating its ability to work through its growing order backlog successfully and become increasingly profitable in its maintenance business. This could also create scope to raise the medium-term operating margin targets.
RWE: Clear growth targets
RWE owns and operates wind farms, solar installations, storage facilities and conventional power plants, trades energy and is expanding its stake in grid infrastructure. Revenue comes from electricity sales and other energy services. The group thus combines ongoing operations with extensive investment.
In the first half of the year, the group increased adjusted EBITDA by more than 40% to EUR 3.0 billion, while adjusted net earnings per share grew by over 60% to EUR 1.77. Since the start of the year, facilities with 752 megawatts of generating capacity have been connected to the grid, with a further 10.3 gigawatts under construction. The expansion is intended to underpin long-term earnings growth. For 2026, management expects adjusted earnings per share of EUR 2.60 to EUR 3.30.
By 2031, RWE is targeting average annual growth of 10% in adjusted earnings per share to EUR 4.55. Shareholders are also set to benefit. For 2026, the group confirms its dividend target of EUR 1.32 per share. Alongside earnings, investment, debt and progress on construction projects will therefore be particularly important when the nine-month figures are released on November 11. Analysts see upside of just over 20% for the stock over the next 12 months.
Conclusion
RE Royalties offers an interesting business model with its portfolio of over 100 royalty interests. Investors gain access to a diverse range of financing arrangements in the renewable energy sector and also benefit from a high dividend yield. Nordex’s rising margins support further share price gains. RWE combines a broader business with long-term earnings and dividend targets.
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