Iberdrola: Growth Plus Margin Expansion Make This Green Energy Powerhouse A Buy

2025-03-30 15:01:59 ET

Summary

• U.S. President Trump’s order pausing wind project approvals has impacted Ørsted, but Iberdrola and the wind energy sector remain strong, with Iberdrola showing a 15.1% YTD return.
• Iberdrola's robust financial performance includes a 17% Y/Y EBITDA growth, strong profit margins, and a 15% dividend increase, making it a compelling investment.
• Iberdrola benefits from surging global power demand, particularly in the UK and U.S., with significant investments in grid expansion and renewable energy projects.
• Despite recession risks, Iberdrola’s stable utility services and focus on grids offer a safer investment with strong growth potential, justifying a Buy rating.

The wind power sector has once again come to the limelight after U.S. President Donald Trump issued an executive order that paused new or renewed approvals for onshore or offshore wind projects on federal land and also paused all leasing of federal waters for offshore wind until a “comprehensive assessment and review of federal wind leases and permitting practices’’ is conducted. I have been following the sector closely to see the unfolding ramifications of the order. Well, it did not take very long: Danish offshore wind energy giant Ørsted (OTCPK: DNNGY ) tanked nearly 15% after the company announced 12.1B Danish kroner ($1.75B) in impairments , driven by project delays as well as higher interest rates and costs at the Sunrise Wind project off the coast of New York. That’s not surprising considering that nearly 90% of the company’s EBITDA comes from wind energy....

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