Interview With HA Sustainable Infrastructure Capital (Strong Buy Upgrade)

Earlier this year, we initiated a new position in HA Sustainable Infrastructure Capital (HASI) as part of our Core Portfolio.

We saw it as an underappreciated beneficiary of the AI revolution, offering a 6.5% dividend yield at the time of our investment, which, coupled with 8-10% annual growth and some upside, had the potential to result in very attractive total returns.

Since then, its stock has surged to higher levels, returning nearly 30% in just 6 months:

Data by YCharts

Is now still a good time to accumulate more shares?

Or should we take our gain and move on to something else?

We reached out to the management of the company to help us decide what to do next. Below, we share our interview with Chuck Melko, CFO and Treasurer of HA Sustainable Infrastructure Capital (HASI).

In short, we are upgrading it back to a Strong Buy rating and plan to keep holding our position. The company provides financing to renewable energy projects, which are very much needed to power the build-out of data centers and the broader electrification of the world. Its growth prospects appear unusually strong for a company offering a 5% dividend yield and trading at a historically low valuation. We believe that this is a $40 stock, and yet, it is still offered at just $33 even following the recent upside.

Below is our interview. Before getting into it, we recommend that you start by reading our investment thesis by clicking here, in case you are not familiar with the company.

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Q&A with Chuck Melko, CFO and Treasurer of HA Sustainable Infrastructure Capital