A couple of decades ago, a lot of people were talking about peak oil. What that meant back then was that we had discovered most of the oil on the planet, and that production had hit a peak historically.
The prediction was that oil was heading for triple digits, never to return to lower levels. But technology changed all that. New technologies like horizontal drilling, advanced drill bits and fracking meant we could access massive oil and natural gas reserves that had been previously inaccessible, locked under shale deposits and the sea floor.
It changed the U.S. from a net importer of oil to a leading exporter of the black gold and one of the world’s biggest producers of natural gas.
But these eight energy stocks to buy in a changing sector show that while energy is still a crucial economic driver, oil is no longer the center of the conversation. Of the eight companies here, only one has to do with oil and gas, and it’s not a driller.
Check out these eight energy stocks to buy:
- Bloom Energy (NYSE:BE)
- Canadian Solar (NASDAQ:CSIQ)
- First Solar (NASDAQ:FSLR)
- Generac (NYSE:GNRC)
- SolarEdge Technologies (NASDAQ:SEDG)
- SunPower (NASDAQ:SPWR)
- Ballard Power (NASDAQ:BLDP)
- Antero Midstream (NYSE:AM)
Bloom Energy (BE)
This company received big attention early on when it was featured on “60 Minutes” for its revolutionary fuel-cell-powered generators that run on natural gas or biogas. That was a decade ago.
Today, back-up generators have become crucial to maintain consistent energy supplies to increasingly tech-dependent companies. Also, the aging electrical grid makes power less and less predictable. The fires in California are a perfect recent example of this.
BE focuses on commercial fuel cells and supplies large, scalable units for companies, institutions and utilities. Its novel design also means it doesn’t combust the gas to turn it into electricity, so it’s also very environmentally friendly.
The stock is up more than 280% in the past year, but there’s plenty that can keep this run going. BE currently has an “A” rating in my Portfolio Grader.
Canadian Solar (CSIQ)
ESG (environmental, social and governance) investing is getting a lot of attention on Wall Street. And the key beneficiaries are energy companies that leave a light footprint. This is another part of the reason we’re seeing rotation out of big oil and into renewable energy companies. CSIQ is one of the beneficiaries of that trend.
With a focus on social responsibility, Canadian Solar is one of the “the world’s largest solar photovoltaic products and energy solutions providers, as well as one of the largest solar power plant developers globally.” Through 2020, the company has provided solar solutions to more than 13 million homes.
And don’t think Canadian Solar just serves Canada with is photovoltaic (PV) products. It has customers in over 150 countries and has sold 52 gigawatts of solar modules. It’s a player.
The stock is up more than 100% in the past year, yet it’s price-to-earnings (P/E) ratio is just 11. It currently has a “B” rating and a buy recommendation in my Portfolio Grader.
First Solar (FSLR)
In the U.S., the most familiar PV maker has been around since 1999. It has fought the battles with oil patch firms and early generation PV technology, when everything about it was expensive. It has not only endured, but also become stronger as a consequence.
First Solar has fought off the dumping of cheap Chinese PVs into the U.S. market and grown its global influence. It’s one of the first companies that institutions add to their ESG portfolios. But it’s not an undervalued or quixotic up-and-comer. It has arrived. And it’s a rock-solid PV maker that’s only going to get stronger as renewables demand grows.
FSLR stock is up 61% in the past year. It currently has a “B” rating and a buy recommendation in my Portfolio Grader.
Aside from generating power, the other essential ingredient to an energy system is power storage. Solar is great — when the sun’s out. Wind is great — when it’s blowing.
The other half of this puzzle is crucial. And that’s where Generac comes in. It makes generators of all sizes, from utility scale to consumer scale. When California utilities were shutting off power in the middle of summer due to fires and massive load spikes, Californians started to realize the value of generators that were off the grid.
GNRC even offers systems for homes that store the energy derived from solar panels for later use, essentially creating a nearly self-sufficient energy system off the grid.
This once-boring company is now sexy. It’s up 123% in the past year and 324% in the past two years. GNRC also has an “A” rating and a strong buy recommendation in my Portfolio Grader.
SolarEdge Technologies (SEDG)
Another piece of the solar power system that most people don’t initially think about is how you get energy from the panel to operating inside your house or office building. It’s not a direct feed.
The energy derived from solar or wind power is generated in direct current (DC). But houses and offices operate on alternating current. Also, the power that is generated doesn’t show up at 120 volts.
That’s where SolarEdge Technologies comes in. It is one of a handful of companies that sells inverters that turn DC to AC and also step down the current so it can be used inside a building. And the more solar that gets put up, especially on the commercial and consumer levels, the more inverters and complementary equipment SEDG sells.
The stock is up more than 240% in the past year and will continue to rise as solar demand rises. It’s also a great ESG play.
SEDG has an “A” rating in my Portfolio Grader.
This is one of the oldsters in the solar sector. SunPower has been around since 1985. And it should be no surprise it’s located in sunny San Jose, California. But its operations now stretch across the U.S. and beyond.
The company builds PV panels, but its big business is installing systems for consumers as well as commercial buildings. It now counts Lowe’s (NYSE:LOW), Walmart (NYSE:WMT), Duke Energy (NYSE:DUK), the U.S. Postal Service and other major corporations as its customers. This kind of status with big corporations that own massive buildings is a key advantage. You have to sign a lot of single-family homes to equal one warehouse job.
SPWR is up 365% year-to-date, yet it’s still trading at a P/E of 53. It has an “A” rating and a strong buy recommendation in my Portfolio Grader.
Ballard Power Systems (BLDP)
One of the big sectors right now is hydrogen fuel-cell technology. This is the next wave in motive power. What’s more, it’s even greener than electric vehicles.
Basically, hydrogen passes through a membrane that moves the hydrogen through one side of the cell and the oxygen through another. They generate heat, electricity and water. You don’t have to use electric utilities to generate electricity to charge them. They make their own electricity from hydrogen, with zero emissions.
It has taken years for this theory to reach a pragmatic place. And now, the investment dollars are rolling in. Ballard Power Systems is one of the pioneers of this technology and finally stands to benefit for all its work.
BLDP stock is up 207% in the past year, but this sector continues to attract investors. It has a “B” rating in my Portfolio Grader.
Antero Midstream (AM)
There’s one thing that’s absolutely necessary for extracting oil and natural gas from underneath the shale basins around the U.S. — water. By forcing water down the drill pipe, it can help fracture the shale and displace the oil and natural gas in the well.
Two of the lowest-cost shales for energy extraction are the Utica Shale and the Marcellus Shale. Antero Midstream provides water pipelines and resources to its partner company for fracking these shales in West Virginia, Pennsylvania and Ohio.
Even as investors turn to ESG investing and more green companies, fracking and natural gas production are still important sectors. And AM is a key strategic player in this region.
The stock is up 40% in the past year and has a massive 14.6% dividend on top of that. This final pick on my list of energy stocks to buy has a “B” rating in Portfolio Grader.
On the date of publication, Louis Navellier has long positions in GNRC and SEDG in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.