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Are These The Best Clean Energy Stocks To Watch Before May 2021?
Clean energy stocks are seeing strong demand in the stock market, thanks to the growing adoption and rising demand. Investors are banking on these secular industry trends as the future of power generation likely rests on renewable energy companies. As a result, some of the top clean energy stocks have grown considerably throughout the past year.
If anything, the jump to clean energy is becoming more apparent each day. That’s because governments globally have been dedicating more resources to the clean energy industry. This is evident from the emphasis on clean energy solutions in President Biden’s $2 trillion infrastructure bill. In fact, the International Energy Agency projects that oil demand should plateau in the 2030s. Subsequently, this would likely see oil only accounting for 20% of global energy consumption by the 2040s. With renewable energy positioned to take a majority of the multi-trillion-dollar energy industry, it totally makes sense that investors are looking for renewable energy stocks to buy right now.
To illustrate, we could take a look at clean energy stocks like Solaredge Technologies (NASDAQ: SEDG) and Daqo (NYSE: DQ). Both companies’ shares are looking at strong gains over the past year. This is despite their stocks being hit by the recent pullbacks in the broader tech industry. Sure, investors have momentarily shifted their focus towards reopening plays that could thrive post-pandemic. But, investors looking towards long-term gains would likely look at the renewable energy sector regardless. With all that being said, are you putting up a list of the best clean energy stocks to watch in the stock market now?
Clean Energy Stocks To Watch Right Now
SunPower is a company that specializes in solar power generation and energy storage. The company designs an all-in-one residential and commercial solution for customers. It boasts industry-leading customer services and also one of the most comprehensive warranties. Boasting over 35 years of dedicated solar experience, SunPower has a diversified portfolio of leading residential, commercial, and solar storage solutions. SPWR stock has been up by over 500% in the past year.
In February, the company reported its fourth-quarter and fiscal year 2020 financial results. Impressively, the company enjoyed a 65% increase sequentially in commercial and industrial solutions. It also posted a net income of $412 million. 2020 was a transformational year for the company as it completed the spin-off of Maxeon.
This has significantly improved SunPower’s financial performance and rapidly shifted its sales strategy to meet increasing U.S. demand as consumers and businesses looking to generate and store their own energy. To add, the management provided strong guidance by expecting revenue to grow 35% this year and 40% in 2022. If that starts a trend of growth and improved profitability, would now be a good time to bet on SPWR stock?
Brookfield Renewable Partners
Brookfield Renewable (BEP) is a renewable energy company that owns and operates renewable power assets. It also operates one of the world’s largest publicly traded renewable power platforms. Similar to other clean energy stocks on this list, BEP stock has been under pressure since the start of the week. This came after the announcement where it sold almost 10% of its wind-powered generating capacity to NextEra Energy Partners (NYSE: NEP). Now, some may think that this disposition is not exactly great news for the company. But investors need to know that the company’s business is backed by a number of long-term contracts. And that could make it a more defensive play amid market volatility.
In the company’s fourth-quarter financials, it reported record financial results. Despite the economic challenges around the world, the company enjoyed significant growth and continued to broaden its operations. For the quarter, the company declared a dividend in the amount of $0.303 per share. This would represent a 5% increase in its distribution.
With its growing scale and operating expertise, BEP is well-positioned to capitalize on these secular trends. Furthermore, the company generates resilient cash flows and has creditworthy counterparties. To add, the company focuses its portfolio on wind and solar, some of the most cost-effective sources of bulk power generation. This would also be advantageous for the company in the years to come. Apart from being one of the top renewable energy stocks, BEP stock also generates a decent dividend yield of 2.9%. Considering that, would you add BEP stock to your watchlist?
Next, we will be looking at California-based clean energy company, Enphase. For starters, the company designs and manufactures home energy solutions spanning solar energy generation and storage. It is well known for having developed the first micro-inverter system in 2008. On top of that, Enphase also offers web-based monitoring and control solutions for said energy services. No doubt, the company could also benefit greatly from President Joe Biden’s infrastructure plan.
Indeed, this could be the case given Biden’s emphasis on transitioning towards cleaner energy sources. Besides, ENPH stock has already soared more than 300% over the past year due to this initiative. The real question now is whether ENPH stock could continue its momentum this year. Of course, the recent underperformance would deter some investors from diving straight in. But as Enphase’s fundamentals remain intact, there is no need to write it off.
Recently, Enphase revealed that it is currently working with South African-based company Rubicon Group. Specifically, Enphase will be supplying Rubicon’s renewable energy division with its Enphase IQ microinverters. By extension, this would be used to bolster existing residential and commercial grids in the region. According to Enphase, the African continent represents 40% of the world’s solar potential. With the company making its entry into this resource-rich market, will you be watching ENPH stock?
Bloom Energy is another clean energy stock worth taking a closer look at. Since its inception, the fuel cell company has been selling auxiliary power to large commercial buildings. Sure, the business has been enjoying respectable growth and operating costs have also been declining steadily. But we all know this won’t disrupt the energy industry no matter how we put it. Instead, it is the company’s forays into hydrogen energy that is putting it in the limelight.
The company is known for its advanced distributed energy generation platform. More importantly, its grid stabilization system underlined by fuel-cell technology is highly promising. The company could be looking at a total addressable market of over $150 billion, as its offerings become more competitive.
Now, there’s no guarantee that the hydrogen economy could eventually be a big part of the renewable energy space. According to S&P Global Market Intelligence, Bloom’s first full-year profit will arrive in 2023. Of course, this is just an estimation. Time will tell if Bloom Energy will be able to bring the hydrogen economy to the masses. If you believe in the potential of this niche, would you be keeping a close eye on BE stock?