Stock Markets
Rich US subsidies may hobble Canada’s clean-fuel efforts
Canadian biofuels producers are threatening to build their next projects in the United States to cash in on rich subsidies for clean fuel and stay competitive, a move that could cost Canada C$10 billion ($7.5 billion) of investment and undermine Prime Minister Justin Trudeau’s efforts to build a greener economy.
Reducing fuel’s carbon intensity is critical to Canada’s efforts to curb greenhouse gas emissions by at least 40% from 2005 levels by 2030. Biofuels are alternatives to petroleum-based fuels made from low-carbon sources such as crops and wood waste.
Fuel retailer Parkland’s move in March to cancel a planned renewable diesel plant in British Columbia due partly to competition concerns about the U.S. Inflation Reduction Act (IRA) underscores the seriousness of the companies’ concerns.
The $430 billion IRA, signed into law by U.S. President Joe Biden last year, aims to cut carbon emissions across the U.S. economy.
European countries are also worrying about how to compete with U.S. subsidies. But Canada’s location bordering the United States makes it especially vulnerable to a possible future flood of cheaper U.S. biofuels, said Ian Thomson, president of Advanced Biofuels Canada.
“There is already a lot of angst in the sector about this. The size of the U.S. package is daunting,” Thomson said.
The lobby group estimates there are some C$10 billion worth of Canadian projects at early stages of development, not counting more advanced ones by Imperial Oil (NYSE:IMO) and others.
The IRA provides a tax credit for U.S. biofuels production starting in 2025. Canada offers nothing similar, but unlike the United States, has negative incentives such as a carbon tax.
The companies considering investment in the United States include Arbios Biotech, a joint venture of forestry company Canfor (TSX:CFP) and Licella Holdings.
Arbios, which is building a demonstration bio-oil plant in British Columbia, will consider a U.S. location for its planned commercial plant unless Ottawa narrows the gap in financial support, said chairperson Don Roberts.
“We’re looking at a large pipeline of projects in the future,” Roberts said in an interview. “If we’re looking at our next big investment, chances are that will be south of the border.”
Roberts, who also works as an industry consultant, said he is aware of at least three other Canadian developers actively considering a U.S. site.
Canadian companies collecting lower subsidies may have to charge more for their fuel than U.S. producers to make similar profits, and may be outbid for feedstocks used in production, such as canola and restaurant grease, Thomson said.
PRESSURE ON OTTAWA
Biofuels companies are pressing Ottawa to increase supports in the next fiscal update, expected late this year. Options include an investment tax credit to offset some capital costs and a contract for differences, a means of de-risking possible changes to carbon pricing and regulatory policies, Thomson said.
The federal government will solicit feedback in summer on possible new supports, said Keean Nembhard, a government spokesperson.
Braya Renewable Fuels is converting a Newfoundland and Labrador refinery to produce 18,000 barrels per day (bpd) of renewable diesel and sustainable aviation fuel this year.
New supports will be key to sanctioning a possible expansion to up to 30,000 bpd, said CEO Frank Almaraz.
“The sooner we have certainty of what the supportive regulatory environment is going to look like, the sooner we will be able to make those expansion decisions,” Almaraz told Reuters.
Enbridge (NYSE:ENB), a Canadian utility and pipeline company, has also asked Ottawa to narrow the gap with the United States, said Pete Sheffield, its chief sustainability officer. Enbridge is developing renewable natural gas (RNG) projects in the United States and Canada.
While Canada offers some advantages, executives say Ottawa can do better. Tidewater (NYSE:TDW) Renewables, which looks to open Canada’s first renewable diesel plant this summer, plans to produce RNG in Alberta from cattle manure and has secured utility Fortis (NYSE:FTS) as a buyer for 20 years, said CEO Rob Colcleugh.
It plans two more RNG plants, including one in the U.S.
“It’s hard to compare exactly apples to apples,” Colcleugh said. “Nonetheless, there is definitely room for more government support in Canada.”
($1 = 1.3356 Canadian dollars)
Sterling Construction Company, Inc. (NASDAQ:) has reached an impressive milestone, with its stock price soaring to an all-time high of $137.93. This peak represents a significant achievement for the company, reflecting a robust performance and investor confidence. Over the past year, Sterling Construction has witnessed a remarkable 84.48% increase in its stock value, underscoring the company’s strong market presence and the positive reception of its strategic initiatives. Investors and market analysts alike are closely monitoring STRL’s progress, as it continues to build on its momentum in the construction sector.
In other recent news, Sterling Infrastructure, Inc. announced two key changes in its leadership. The company revealed the upcoming retirement of board member Charles R. Patton, effective from September 1, 2024. Patton, who has been a part of Sterling’s Board since 2013, will step down after over a decade of service, during which he contributed to the Corporate Governance & Nominating Committee and the Compensation Committee.
In parallel, Sterling Infrastructure named Dan Govin as its new Chief Operating Officer. Govin, who brings over three decades of experience in the energy infrastructure industry, is set to lead the company’s strategic and operational initiatives. His past roles include Regional President at Quanta Services (NYSE:) and Senior Vice President of Operations.
In related developments, Sterling Real Estate Trust, a North Dakota-based real estate investment trust, recently held its annual shareholders’ meeting. During the meeting, eight trustees were elected, including Gregory P. Hammes, Timothy L. Haugen, and Michelle L. Korsmo, among others. Additionally, the appointment of RSM US, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024, was ratified by the shareholders. These are among the latest developments at Sterling Infrastructure, Inc. and Sterling Real Estate Trust.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
CRH (NYSE:) PLC, a global leader in building materials, has reached an all-time high, with its stock price soaring to $91.22. This significant milestone underscores the company’s robust performance and investor confidence in its growth trajectory. Over the past year, CRH has seen an impressive 66.73% increase in its stock value, reflecting strong market demand and the successful execution of its strategic initiatives. The company’s ability to achieve this record price level amidst a dynamic economic environment speaks volumes about its resilience and the positive outlook shared by its stakeholders.
In other recent news, CRH Plc has seen a series of positive developments. Stifel, a financial services firm, has increased its EBITDA projections for the company by 4% for the years 2024 and 2025, following a positive outlook on CRH’s earnings. This includes the expected contributions from the newly acquired Adbri, which is predicted to add an additional 1% and 2% to the EBITDA in 2024 and 2025, respectively.
In addition, Deutsche Bank has raised its price target for CRH, maintaining a Buy rating on the stock, following the company’s acquisition of a majority stake in Adbri. This move is anticipated to enhance CRH’s materials solutions offerings in Europe.
Furthermore, CRH has appointed Lauren Schulz as its new Chief Communications Officer, a move expected to enhance the company’s global communications strategy.
Additionally, CRH has filed a notification regarding transactions by persons discharging managerial responsibilities, providing transparency into the dealings of the company’s management.
Lastly, CRH has reported strong growth in adjusted EBITDA and margin for the second quarter of 2024, and has raised its full-year adjusted EBITDA guidance to a range of $6.82 billion to $7.02 billion. These recent developments demonstrate the company’s resilience and strategic approach in a competitive market.
InvestingPro Insights
The ascent of CRH PLC in the stock market is not just a reflection of past performance but also a beacon for future potential, as suggested by InvestingPro data and insights. With a market capitalization of $60.88 billion and a forward-looking P/E ratio of 17.69, CRH is positioned competitively within the Construction Materials industry. Its commitment to shareholder returns is evident through a consistent dividend growth, having raised its dividend for the last four years, and a dividend yield of 1.39% as of the last twelve months leading up to Q2 2024. These financial gestures indicate management’s confidence in the company’s profitability, which is further supported by a strong gross profit margin of 34.85%.
In addition to its financial health, CRH’s operational efficiency is highlighted by an EBITDA growth of 13.63% in the same period. Notably, analysts have revised their earnings upwards for the upcoming period, signaling potential for continued growth. For investors seeking more detailed analysis, there are additional InvestingPro Tips available, including insights into CRH’s share buyback strategy and its performance relative to industry peers. These tips, accessible through the InvestingPro platform, offer a comprehensive view of the company’s strengths and investment potential.
For those monitoring CRH’s trajectory, the stock is trading near its 52-week high, at 99.14% of its peak, with a previous close at $89.27. The company’s next earnings date is set for November 7, 2024, which will provide further clarity on its performance and outlook. With a fair value estimate of $101 by analysts and an InvestingPro fair value of $74.35, investors are presented with a nuanced picture of CRH’s valuation. As the market anticipates CRH’s next financial disclosures, the InvestingPro platform remains a valuable resource for real-time data and expert analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
In a remarkable display of market confidence, Nelnet Inc (NYSE:) stock has achieved an all-time high, reaching a price level of $115.64. This milestone underscores a period of significant growth for the company, which has seen its stock value surge by 27.28% over the past year. Investors have rallied behind Nelnet’s strong performance, propelling the stock to new heights and reflecting optimism in the company’s future prospects. The all-time high represents not just a peak for the year but an unprecedented value in the company’s trading history, marking a momentous occasion for both Nelnet and its shareholders.
In other recent news, Nelnet Inc. has been under the spotlight following strong Q2 earnings and subsequent adjustments by TD Cowen. The firm increased Nelnet’s price target to $98.00, up from $96.00, while maintaining a Hold rating on the stock. This follows Nelnet’s Q2 2024 earnings report, which highlighted an EPS of $1.44, surpassing TD Cowen’s estimate of $1.33. The improved earnings were largely due to reduced operating expenses and a lower provision for losses. However, these gains were slightly offset by a decrease in fee income and a lower net interest income.
In recent developments, Nelnet disclosed its quarterly financial results to the Federal Deposit Insurance Corporation (FDIC). The report provides a snapshot of the financial health of Nelnet Bank, its wholly-owned subsidiary, and includes critical data such as assets, liabilities, and income. This commitment to transparency and regulatory compliance allows investors to gauge Nelnet’s financial stability and growth prospects.
Furthermore, Nelnet’s bank subsidiary, Nelnet Bank, also disclosed its quarterly financials. The report, known as the Call Report, is a significant indicator of the subsidiary’s contribution to Nelnet’s overall financial status. This routine disclosure aligns with the requirements of the Securities Exchange Act of 1934, providing a clear view of Nelnet Bank’s financial standing as of the last quarter.
InvestingPro Insights
In light of Nelnet Inc’s (NNI) recent achievement of an all-time high stock price, several InvestingPro Tips and real-time data points provide further context to the company’s financial health and market performance. Notably, Nelnet has demonstrated a robust track record by raising its dividend for 9 consecutive years and maintaining dividend payments for 18 consecutive years, which signals a strong commitment to shareholder returns. Additionally, analysts remain optimistic about the company’s profitability, expecting net income to grow this year.
From a data standpoint, Nelnet’s current market capitalization stands at $4.15 billion with a price-to-earnings (P/E) ratio of 26.88, which adjusts to a lower ratio of 22.02 when considering the last twelve months as of Q2 2024, reflecting a more favorable valuation for investors. The company’s revenue growth has been modest at 0.7% over the last twelve months, yet it experienced a more significant quarterly surge of 12.82% as of Q2 2024. Importantly, Nelnet’s stock is trading near its 52-week high, at 99.06% of this peak, and has seen a large price uptick of 31% over the last six months. These figures underscore the company’s strong market presence and potential for continued growth.
For those interested in deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/NNI, which can provide investors with more nuanced insights into Nelnet’s performance and future outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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