Stock Trading - Entry 24

Previously, I wrote about how El Salvador is using part of the electricity generated at a geothermal power plant at a volcano to operate a government bitcoin mining operation with the end goal of building a new city. This article contains a stock actually listed on a Canadian stock exchange doing a little bit of the same - minus the whole bitcoin thing. Are you ready to harness a volcano to add power to your portfolio?

Weeeellllllll, let's take a look first and bare in mind, what follows is my personal opinion and observations, not financial advise.

It all started this past winter when a new friend came to town and spoke a bit about Canadian stocks that pay dividends. Let's do a quick splash (not deep dive) into dividends.

I harken dividends to be like interest banks pay you in savings accounts because dividends are a percentage of net profits a company pays directly to shareholders. Who does this? Quite a few companies on the Toronto Stock Exchange (TSX), actually. Who decides when and how much dividends are? Typically, that's a company's board of directors and they decide each time. Are dividends taxed? Since I am not your financial advisor, I will say that there may be tax implications.

What I find odd about dividends is some tools will look at the stability of dividends paid by a company over time because it is not a regular bank account. On the other hand, it does say something if a company regularly earns enough to pay its shareholders a little extra on a regular basis. I am currently of the mindset of dividends being a bonus to being able to sell shares at a higher price.

When I filtered for stocks affordable for me that pay dividends, my search eventually saw me stumble across Polaris Renewable Energy (PIF). They are a Canadian company doing renewable energy. Ok, where? Nicaragua.

Polaris Renewable Energy has recently been awarded yet another contract to not only grow the geothermal plant at San Jacinto, but to manage it until 2039. It's big and with the next phase of construction, will supply about 8% of the country's electricity consumption. Sounds solid, eh? After all the nuances of El Salvador's recent history and new bitcoin city, I kept digging.

The Nicaraguan government has been touted as being incredibly oppressive. Ok, it's nice when a government wants to protect the assets of a company you've invested in, but what happens when the families and friends of workers at said company leave? When 100,000 people leave over a four-year period, what impact does that have on consumption as well as the labour pool? Sure, they still have over 7.1 million people, but still. A social situation that is far-from-great strikes me as a potential risk to consider.

In short, it looks somewhat solid yet it seems to me to boil down to a question of ethics. It's kind of like ETFs that focus on social responsibility as opposed to just anything. With so many other stocks to choose from, I find it easy to choose social responsibility as the grain of rice that tips my scale to investing elsewhere. Perhaps Canada's big banks ought to reconsider their ETF composition now that the Canadian federal government has started digging in to priorities that seem to counter the federal government's objectives.

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