05. November 2020 | 10:54 CET
Vestas Wind Systems, Newlox Gold, Equinor: Where are sustainable returns?
As the experts of the US investment house Western Asset Management recently reported, sustainable investments have a future regardless of the outcome of the US presidential election. "Many international investors have long since declared ESG to be standard. Also, ESG criteria are an effective tool in a holistic investment process and can be used to the benefit of investors," the investment Company said. Companies, too, are increasingly orienting themselves towards ESG criteria and have long been thinking further ahead than until the next quarterly figures. The wind turbine manufacturer Vestas Wind Systems is a pioneer in the sector. The Danes started back in 1979, and today the Company is the market leader. But is the share also a notable investment?
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ISIN: CA65151R1001 , DK0010268606 , NO0010096985
Vestas Wind Systems wants to become even greener
Vestas Wind Systems impresses with full order books. In some cases, there is work to be done until 2023. In the first half of 2020, the Company was able to increase its sales significantly, but at the same time slipped into the red. The reason: Vestas incurred additional costs in connection with warranty commitments. Although the order books are full and Vestas has been able to land large-volume orders, the Company operates in a market that is characterized by fierce competition.
Nevertheless, Vestas is committed to ESG criteria and is gearing its business to the climate goals of the Paris Agreement. Most recently, the Company was able to reduce both electricity and water consumption significantly. By 2030, the Company wants to become CO2-neutral, and by 2040, Vestas intends to manufacture wind turbines without generating waste. The Vestas Wind Systems share price has recently dropped a little, but on a one-year horizon, the return on investment is still more than 100%. Despite the recently weaker figures, the market still has some faith in the stock.
Will Newlox create a paradigm shift for the mining industry?
Over the months, the stock of the "green" gold producer Newlox Gold has also earned trust: On a one-year horizon, the Company value has almost tripled. Newlox Gold does not dig open pits or blast tunnels into the deep-lying rock. The gold producer uses a unique process to extract gold from the tailings of existing small companies. The unique thing about it is that the Company wants to do without toxic chemicals in the future and relies on a process that neither releases toxins nor wastes water. According to Newlox, initial tests indicate a recovery rate of 90%. "Our process could usher in a paradigm shift in the gold industry," said Ryan Jackson, CEO and President of Newlox.
Newlox Gold: The stock for rapid jumps
The Company is already producing gold in Costa Rica, where it uses the tailings of smaller mining companies that are not very efficient. The processing plant can be dismantled if necessary and rebuilt elsewhere. The Company plans further organic growth in Costa Rica and values legal security and local conditions. On the stock exchange, the share is well known for rapid leaps, and with a market capitalization of fewer than ten million euros, it is a small-cap. In addition to the known risks, however, this also offers opportunities for experienced investors given the continuing ESG trend.
Equinor shines with a dividend
The Equinor share is a little more leisurely. The Norwegian Company, which until recently was called Statoil, focuses on oil and gas and has been through the pandemic in a mixed way and lost sales. The planned growth in production volume was not obtainable in the course of the pandemic, but the exploration of new deposits continued. Equinor is also committed to sustainability and is currently working on a CO2 storage facility together with Shell and Total. The Company, whose majority shareholder is the Norwegian state, has promising reserves but is suffering from lower demand in the wake of the pandemic. The dividend yield of more than 6% is likely to be a strong argument for many investors at present.
Equinor is not known as a sustainability player, and this is where other companies score. However, the development at Equinor also shows where the future for the sector is heading. Companies with an existing green business or new products in this area could benefit in the long term. The trend towards ESG has long since reached the commodities sector.