It’s long past time to start considering clean energy stocks for future growth. It goes without saying that clean energy is the future and investors should position their portfolios to capitalize on the green revolution that is gathering steam around the world.
A forecast by accounting firm Deloitte says that the clean energy sector should accelerate rapidly this year as U.S. President Joe Biden’s administration rejoins the Paris Climate Accord, starts investing $2 trillion in clean energy and begins laying the groundwork to get America to net-zero carbon emissions by 2050.
Allied Market research forecasts that the global clean energy market will be worth $1.5 trillion by 2025. As we move towards greater use of electric vehicles and solar-powered homes, several companies that are focused on renewable sources of energy are poised to benefit.
In this article, we look at four clean energy stocks for this year and beyond.
- NextEra Energy (NYSE:NEE)
- Sunrun (NASDAQ:RUN)
- Plug Power (NASDAQ:PLUG)
- Brookfield Renewable Partners (NYSE:BEP)
Clean Energy Stocks: NextEra Energy (NEE)
Juno Beach, Florida-based NextEra Energy is the largest renewable-energy company in the United States and produces more clean energy from wind and solar power than any other company in the world.
While these facts should be enough to entice environmentally conscious investors, NextEra Energy is also an extremely well-run business that has been in continuous operation since 1925 and today has annual revenues of $20 billion.
NEE stock, which split on a four-for-one basis on October 26 of last year, should be a prime beneficiary of the Biden administration’s focus on climate change and lessening Americans’ use of fossil fuels.
The stock should also get a lift from rising energy prices this year. At around $74 a share, NEE is currently trading at the same level it was at following the stock split last fall. However, analysts agree that NextEra Energy is a great long-term investment given the intensifying focus on clean energy.
Morgan Stanley said that Sunrun has been the victim of an industrywide sell-off in recent weeks and noted that, at its current price cresting $57, RUN stock represents excellent value with lots of upside potential.
The company provides residential solar panels and home batteries throughout the U.S. As such, it also stands to benefit if Congress passes a new law that subsidizes the cost for consumers to install rooftop solar panels on their homes. Subsidies could take the form of tax credits for rooftop systems and stand-alone tax credits for solar storage.
Many industry observers feel that these types of subsidies will be a key part of the Biden administration’s efforts to get Americans to adopt and use cleaner forms of energy. RUN shareholders are hoping this turns out to be the case.
Clean Energy Stocks: Plug Power (PLUG)
New York-based Plug Power designs and manufactures hydrogen fuel cell systems that help power electric vehicles.
After a strong start to the year, PLUG stock peaked at $75.49 at the end of January and has since fallen 55% and lost all of its gains year-to-date.
Plug Power shares are now trading at $34, which is disappointing, but analysts say investors should stick with this company as the long-term upside far outweighs the short-term downside.
One of the main reasons for PLUG stock’s current pullback is that the share price had advanced exponentially over the past year. After the Covid-19 crash of March 2020, Plug Power’s stock rose 2,245% to its 52-week high of $75.49.
In March 2020, Plug Power’s stock was worth $3.22. The shares also sold off after the company announced that it had found accounting errors in its financial results for 2018, 2019 and the first three quarters of 2020.
Plug Power has been forthcoming about the accounting issues and is working to resolve them. As such, the current correction should end in the near-term.
After that, Plug Power can continue its focus on developing systems that allow electric vehicles to recharge in a few minutes rather than several hours — technology that has the potential to revolutionize the industry.
Brookfield Renewable Partners (BEP)
Canadian-based Brookfield Renewable Partners is a leading clean energy company. Like NextEra Energy, Brookfield focuses on wind, water (hydro) and solar power generation.
Currently, the company operates more than 5,000 generating facilities that, combined, can power five million North American homes. While more than half (64%) of the company’s electricity generation comes from hydro, Brookfield Renewable is aggressively expanding its wind and solar capabilities.
BEP stock should make a great long-term addition to any portfolio given that it is perfectly positioned to gain from the clean energy revolution that is now beginning in earnest.
In the past two years, Brookfield Renewable Partners stock has more than doubled to around $42 a share. While the stock is 17% off its 52-week high of $49.87, investors should look to buy the dip and hold this stock for the long haul.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.