The winners of the Energy Transition 2.0: How Nordex, RE Royalties, and E.ON are now generating returns

Nordex - Starting the new year with momentum

The Nordex Group made a strategic statement right at the start of the year. In mid-January, the wind turbine manufacturer agreed a multi-year framework agreement with VERBUND Green Power, a subsidiary of the Austrian energy supplier VERBUND. The agreement provides for the potential delivery of turbines for up to 700 megawatts by 2030. This secures Nordex's long-term prospects in six core European markets and underscores the demand for its turbines from established energy producers. Such a framework agreement provides planning security far beyond the current year.

The foundation for 2026 was already laid last year. Nordex reported record order intake of over 10 gigawatts for the full year 2025, an increase of more than 22%. Particularly encouraging: the average sales price per megawatt remained stable in the fourth quarter. This full order book provides clear visibility and forms the basis for predictable capacity utilization in the coming years. The momentum also continued internationally, with substantial orders from markets such as Spain and Canada still coming in during December.

The Company's operational strength is also reflected in its presence in its home market. In Germany, Nordex once again secured market leadership in newly installed onshore capacity in 2025. At the same time, orders are continuously coming in from other European countries and from Canada, where the Company will place its most powerful turbine for the first time. This broad positioning and the confirmation by partners such as VERBUND point to a solid year in 2026. For investors, this combination of volume and stability signals a more solid business foundation. The share is currently trading at EUR 31.54.

RE Royalties – On course for expansion

On December 11, there were already signs of where the journey was headed for Canadian specialist financier RE Royalties. At that time, the Company announced a pipeline of around CAD 50 million in concrete investment opportunities in solar, wind, and storage projects. This announcement was not merely a story about the future, but a clear signal of disciplined portfolio growth. The focus is on operational plants or those about to go into operation, which lowers the risk profile. In return, the Company receives a share of the revenue (royalty). For investors, this was an indicator that management is not just talking about ambitions, but has concrete projects that are being developed in a targeted manner.

Just a few weeks later, on January 7, the expected proof followed. The Company announced a binding agreement with developer Solaris Energy. This agreement involves an investment of up to USD 9 million in two portfolios of distributed US solar projects. Financing will be provided in stages linked to milestones, a proven method of risk management. This transaction proves that the pipeline outlined in December is liquid and feasible. This is precisely the type of scalable, diversified royalty acquisition that defines the business model and is expected to generate long-term cash flows.

The outlook remains expansive, but management is prioritizing smart growth over speed. To maintain financial flexibility for such opportunities, the board has changed the dividend policy from quarterly to annual distributions. A final payment under the previous quarterly dividend practice of CAD 0.01 per share is scheduled for January 21. This strategic adjustment is intended to provide maximum flexibility in capital allocation without eliminating the distribution. The goal is clear. Management plans to increase recurring income in the long term through selective, royalty-generating investments, rather than distributing available capital in the short term. The stock is currently trading at CAD 0.31, which would result in a dividend yield of around 13% if distributions remain the same.

E.ON – Under review: Stable networks, unclear rules

E.ON offers investors a clear profile. The Company has transformed itself from a traditional utility provider to a leading European network operator. This focus on regulated infrastructure promises stable, predictable earnings that are largely unaffected by stock market volatility. The strong investment offensive in the energy transition is laying the foundation for sustainable growth in the coming years. An easing of the energy market is already on the horizon for 2026. Falling prices would not only take the wind out of the group's sails politically but also significantly increase consumer acceptance. The fundamental story is intact.

However, there are considerable headwinds, with the greatest uncertainty coming from Berlin. The new regulation for grid revenues from the end of the decade remains vague, which hinders long-term planning and unsettles the market. In addition, the Company is calling for an end to solar subsidies, a politically sensitive demand that could damage its image. Operationally, E.ON is under cost pressure due to expensive grid expansion and a highly competitive sales market, which is weighing on margins.

Nevertheless, analysts remain fundamentally positive. The consensus target is just above the current price. Deutsche Bank continues to see "Buy" potential and recently raised its target slightly. JPMorgan remains optimistic with an "Overweight" rating and expects positive momentum. Bernstein Research, on the other hand, sees only "Market Perform," meaning average potential, and points to the continuing regulatory uncertainty. None expect rapid growth, but rather steady development driven by grid investments. The share price is currently trading at EUR 17.195.

The energy transition 2.0 is being driven by pragmatists who are growing profitably despite regulatory headwinds. Nordex shows with record orders and long-term framework agreements that demand for wind turbines remains robust. RE Royalties proves that its scalable royalty model generates liquid cash flows with disciplined investments in solar and wind projects. E.ON, a transformed grid infrastructure giant, offers stable earnings but continues to struggle with political uncertainty over future regulation. Together, they show how decarbonization can work economically even without permanent subsidies.