Earth Day: 3 Ways to Make Serious Green With Green Energy

Advertisement

With the 45th Earth Day now just right around the corner on April 22, it seems appropriate to highlight a few ways investors could invest in Green Stocks — making some serious green while helping save our planet.

Socket

Source: ©iStock.com/Gudella

The idea of “going green,” may conjure up images of hippies from half a century ago, but the world has changed a lot in that time. In reality, going green today means very high-tech stuff with solar panels, electric vehicles and biodiesel.

Green energy is really big business and making investors happy on two fronts. It’s good for the environment, and some companies are making investors some serious cold hard green cash.

Let’s take a look at a few ways investors can get help out the environment and their pockets at the same with these Earth Day stocks.

Earth Day Stock Picks: Green Energy

first_solarWhen we talk about green energy, we’re referring to solar, wind power, biodiesel, hydro-electric or any other form that can be easily renewed.

Right now, the biodiesel industry is struggling as oil and gas prices have fallen to levels that make it uneconomical to produce biodiesel on large scales, but that’s not to say the industry will be dead forever. As for wind, solar and hydro-electric power, my favorite three companies right now are — in no specific order — SunEdison, Inc. (NYSE:SUNE), First Solar (NASDAQ:FSLR) and Canadian Solar Inc. (NASDAQ:CSIQ).

All three companies can be mainly thought of as solar stocks, as they all focus on selling solar panels and improving the efficiency of their solar wafers, but SunEdison is diversified into other areas of the solar industry with downstream operations management and even solar energy generation assets. SunEdison’s diversity allows investors to reduce their risk of low-cost solar panels flooding the market and hurting their investment.

But, on the other side, First Solar has survived China flooding the U.S. market with cheap solar panels. Although First Solar has lagged the S&P 500 over the past year by more than 20%, analysts are expecting the company to have a strong second quarter. Both Standpoint Research and Deutsche Bank have upgraded the stock since the start of 2015.

Canadian Solar, meanwhile, has operations in the U.S., Canada, Germany, India, Japan and China itself, giving it very broad exposure to the green energy trend.

I expect both SUNE and CSIQ to just continue on crushing the market, up 50% and 32% respectively over the past year. Despite the poor balance sheet, SunEdison is the world’s largest renewable energy development company and because of its long-term energy production contracts. As for Canadian Solar, the balance sheet is actually one of the company’s most attractive qualities.

All three stocks make great Earth Day picks for green energy.

Earth Day Stock Picks: Follow Elon Musk’s Road to Green Energy

ElonMusk185Elon Musk made millions after co-founding and then selling PayPal, but now he’s better known as the CEO and co-founder of Tesla Motors, Inc. (NASDAQ:TSLA). He’s also the chairman and co-founder of SolarCity Corporation (NASDAQ:SCTY), which happens to be my favorite solar stock.

Musk himself has stated in the past that global warming is a serious issue and that one way to address that is by developing the cars that don’t add carbon emissions to the environment.

While Elon Musk cannot be attributed with the idea of electric cars, his company Tesla is certainly pushing the envelope of what fully electric cars are capable of. The company has plans to release an affordable vehicle that can drive more than 300 miles on a single charge around 2017.

While Tesla is trying to cut gasoline out of the average American’s budget, SolarCity is trying to cut the electricity bills. SolarCity is another creation of Musk’s that is trying to lower carbon emissions by making it more affordable for homeowners and business to add solar panels to their homes or commercial buildings.

SolarCity finances the purchase and installation of solar panels for customers in exchange for long-term lease agreements. New lease agreements mean predicable revenue stream for the company and thousands of megawatts of renewable energy being produced for years to come.

So if you’re looking for great green energy stocks to buy for Earth Day, you could do a lot worse than TSLA and SCTY.

Earth Day Stock Picks: Green ETFs

solar stocks panel green energy 630 ISP

Source: ©iStock.com/danielschoenen

With any industry, a cherry-picking individual company can be a risky way to invest, and green stocks are no different. Luckily, there are a number of great green ETFs you can buy to grab a handful of green energy stocks all at once.

One of my favorite Green ETFs is PowerShares Global Clean Energy ETF (NYSE:PBD). Despite trailing the market by 9% over the past year, shares of PBD are up 56% in the past two years compared to the S&P 500’s 39% gain. The ETF is also trading at its current Net Asset Value and has a trailing 12-month dividend yield of nearly 1%. Expenses run 0.75%, or $75 per every $10,000 invested.

My other favorite green ETF is one focused more on the solar industry which goes by the name of Market Vectors Solar Energy ETF (NYSE:KWT) which is made up almost completely of solar stocks. KWT has a yield of 0.55%, trades slightly below its Net Asset Value, despite beating the market by 3% last year and more than 80% over the past two years. SunEdison, First Solar, and SolarCity make up some of the top holdings. The net expense ratio is 0.66%.

As a whole, we shouldn’t just think about being green and saving the environment once a year, on Earth Day. All of the companies above are striving to make a difference both for the earth and their investors’ pockets — and as these picks have shown, it’s possible to accomplish both goals.

As of this writing, Matt Thalman was long TSLA, and SCTY. Follow him on Twitter@mthalman5513.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/04/earth-day-green-energy/.

©2024 InvestorPlace Media, LLC