Shares of Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A) have cooled off considerably in 2021. After a scorching-hot run in 2020, the renewable energy stock is now nearly 30% off its recent high. That sell-off has pushed its dividend yield to an enticing level of around 5%. Add that to its long-term growth prospects, and I couldn’t resist the opportunity to add to my position.
Clearway Energy has significantly enhanced its dividend over the past year. The company had to reduce the payout by 35.7% in early 2019 when one of its largest customers, California-based utility Pacific Gas & Electric (NYSE: PCG), filed for bankruptcy. However, the bankruptcy process didn’t alter Clearway’s power purchase agreements (PPAs) with the utility. As a result, it was able to reset its payout level last year when PG&E reemerged. In addition to a massive one-time boost, Clearway has provided its investors several other smaller raises over the past year. Overall, its dividend is now 62% above 2019’s level. At the current stock price, that implies a 4.9% yield, which is well above the S&P 500‘s current level of around 1.5%.