3 Companies Cashing In on Climate Change

Climate Change Overview - The global average temperature in 2023 was 2.66 degrees Fahrenheit warmer than pre-industrial times, marking a 0.3 degrees Fahrenheit increase from the previous record set in 2016 [1] - 2023 was reported as the hottest year on Earth in approximately 125,000 years, with record-breaking temperatures for seven consecutive months [1] - The primary cause of this temperature rise is greenhouse gas emissions from fossil fuels, emphasizing the need for climate-friendly technologies [1] Atlantica Sustainable Infrastructure (AY) - Atlantica Sustainable Infrastructure owns and manages infrastructure assets, with approximately 70% of its assets based on cash available for distribution (CAFD) being renewable energy [2] - The company has a development pipeline of 2.1 gigawatts (GW) of renewable energy and plans to reduce its debt from $4.41 billion to $2.54 billion by 2028 [3] - In 2022, Atlantica grew its CAFD by 5.5%, and its annual payment of $1.78 yields a high 8.8%, making it attractive for investors [3] Xylem (XYL) - Xylem, spun off from ITT in 2011, has grown its revenue from $3.2 billion to $5.52 billion over 12 years, with a focus on addressing global water supply challenges [4] - The company acquired Evoqua Water Technologies for $7.5 billion in stock, resulting in a combined annual revenue of $7.3 billion [5] - Following the acquisition, XYL stock appreciated by 10%, indicating potential for better performance in the coming years [5] Siemens Energy (SMNEY) - Siemens Energy was spun off from Siemens AG in September 2020, with the parent company retaining a 25.1% stake [6] - The company had an order backlog of 112 billion euros ($122.7 billion) as of September 2023, up from 97 billion euros ($106.2 billion) a year earlier [7] - Siemens Energy is working on a turnaround plan for Siemens Gamesa to achieve profitability by 2026, which could significantly increase the value of its shares [7]