January 22nd, 2026 | 07:00 CET
Winner of the AI boom! RE Royalties shares jump and offer a dividend yield of over 10%!
This stock has finally broken through. We have repeatedly highlighted the pent-up potential at RE Royalties in recent months. The Company stands out with a diversified business model in the renewable energy sector, with a significant portion of its activities based in the United States. Driven by the AI boom, energy production capacities equivalent to more than half of Germany's total electricity consumption will have to be connected to the grid in the US over the next two years alone. RE Royalties is well-positioned to benefit from this development. And if that still is not enough to make the case, the dividend yield is currently above 10%.
time to read: 4 minutes
|
Author:
Fabian Lorenz
ISIN:
RE ROYALTIES LTD | CA75527Q1081
Table of contents:
"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Tag cloud
Shares cloud
Share price jump after strong announcement
Is this the breakthrough for the share? RE Royalties now appears to be playing a stronger role in the US energy market. This month, it announced its entry into two portfolios of solar projects for decentralized energy generation in the US. The share price responded with a 10% jump. But this is likely to be just the beginning. First, the announcement: RE Royalties will invest up to USD 9 million in two solar project portfolios from Solaris Energy and receive royalty interests in return.
The first portfolio comprises 15 projects in California, Maine, Delaware, New Hampshire, and Colorado. Nine of these projects are already under construction, and some are nearing commissioning. RE Royalties will invest USD 4.8 million here. In return, it will receive royalty payments over the next 25 years. The second portfolio is expected to comprise nine projects. The exact composition has not yet been determined, and therefore neither has the specific amount of the investment.
Solar energy generation is an attractive market segment
The transaction is intended to mark the start of intensive cooperation between RE Royalties and Solaris Energy. RE Royalties' new partner is a developer in the field of renewable energy that has already successfully connected hundreds of solar projects to the grid. Solaris Energy has a large pipeline of potential projects with a volume of more than USD 400 million. RE Royalties intends to actively support its new partner Solaris Energy in the implementation of this US solar portfolio in the future. RE Royalties sees decentralized solar energy generation as an attractive market segment.
Energy demand from AI data centers drives electricity consumption
The growing energy demand from AI data centers is driving electricity consumption in the US. The US Energy Information Administration (EIA) expects electricity consumption in the US to continue to rise in the coming years. After 4,198 TWh in 2025, demand is expected to climb to 4,256 TWh in 2026 and 4,364 TWh by 2027. These additional 260 TWh correspond to around 60% of Germany's total electricity consumption in 2024.
Despite political disputes, the EIA expects renewable energy to account for a higher share of the electricity mix: from around 24% in 2025 to 28% by 2027. Nuclear power will remain roughly stable at 18% to 19%, while coal is expected to decline from 17% in 2025 to 15% in 2026/2027. Natural gas is also expected to decline slightly. This forecast is at odds with the energy policy preferences of US President Donald Trump. He is known to be a supporter of fossil fuels such as oil and coal, as well as nuclear power. In practice, however, electricity producers and customers such as hyperscalers Amazon and Alphabet do not seem to be deterred by this and are investing heavily. There are likely very pragmatic reasons for this. After all, it is simply faster to connect a solar power plant to the grid. Nuclear power plants can easily take 10 years or more. One cannot afford to wait that long in the AI race.
Innovative business model
The deal with Solaris Energy describes RE Royalties' business model very well. The Company has successfully transferred the license financing model from the raw materials industry to the renewable energy sector. Project developers receive capital without giving up shares. In return, RE Royalties receives a small share of future revenues. The loans are often repaid after two to three years, and RE Royalties can then reinvest the capital. The income from the projects is usually secured by 20- to 40-year power purchase agreements, making it easy to plan. Important: RE Royalties exclusively finances commercially proven technologies such as solar, wind, and hydropower. Experimental concepts are avoided. In its outlook for the current year, the Company referred to the short-term deal pipeline for new investments with a volume of around USD 50 million. The planned transactions are broadly diversified. Regionally, they range from the US and Canada to the Maldives.
Dividend yield above 10%
The business model makes RE Royalties a real dividend gem. Despite the recent rise in the share price to around CAD 0.32, the dividend yield remains above 10%. Shareholders received CAD 0.04 per share in 2025, and there is currently no indication that distributions will be reduced this year.
Conclusion: Significant upside potential remains
The recent jump in RE Royalties' share price is encouraging, but is likely only a stop along the way to a much higher valuation. It is simply incomprehensible why the stock has struggled so much over the past year. A large part of RE Royalties' activities are located in the US. And there, every stock that has even the slightest connection to the energy market has gone through the roof. Against this backdrop, RE Royalties still appears significantly undervalued.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
