Clean and renewable energy is the centerpiece of President Joe Biden’s $2.25 trillion infrastructure plan. Many clean energy stocks saw a little pop on the news.
The president has called publicly for investments in electric vehicles, renewable power and the electric grid as a means of combating climate change and helping the U.S. reach its carbon dioxide reduction goals.
This is great news for clean energy companies and their shareholders. In the coming years, many companies that are focused on renewable power sources such as wind, water and sun should benefit as the U.S. moves away from fossil fuels and embraces clean energy.
This is a market that is forecast to be worth $1.51 trillion by 2025, according to Allied Market Research.
That’s a big market opportunity and one that energy companies are scrambling to capitalize on. In this article, we look at three clean energy stocks seeing green now and into the future.
Clean Energy Stocks Seeing: NextEra Energy (NEE)
NextEra Energy is the largest electric utility in the U.S., supplying power to half the homes in Florida.
The company is a hybrid energy conglomerate. It owns and operates natural gas, nuclear energy and oil power generating plants but is also the world’s largest generator of renewable energy from wind turbines and solar panels.
Investors who own shares of NEE stock literally get exposure to the entire continuum of power generation.
NextEra Energy’s stock has an impressive long-term track record, providing investors with a 20% return over the past year and a gain of 137% in the last five years. However, NEE stock has been under pressure since it undertook a four-for-one stock split on October 26 last year.
So far in 2021, the share price is down 1% at $73.32. Today, the stock is trading at the same level it was at immediately after splitting.
However, analysts forecast brighter days ahead for NextEra Energy. The median price target on the stock is $90, suggesting a potential 23% gain from current levels.
NextEra Energy is expected to be a beneficiary of the Biden administration’s climate initiatives in coming years. Buy NEE stock while it’s still on sale.
Sunrun (RUN)
Investors looking for the hottest clean energy stocks right now can end their search at Sunrun.
Wall Street analysts have been tripping over themselves lately to upgrade their share price targets on RUN stock.
On June 16, investment bank Morgan Stanley (NYSE:MS) became the latest to raise its target. Calling Sunrun “the most compelling clean energy stock,” Morgan Stanley analyst Stephen Byrd raised his target on the shares to $91 from $86 previously.
The median price target on the stock is now $81 for a potential gain of 46% in the coming 12 months.
What has analysts going gaga over the provider of residential solar panels and batteries is the market opportunity that lies ahead of Sunrun.
Increasing demand for renewable energy, government rebates to encourage solar panel installations, and the integration of electric vehicle charging into home energy systems all work in Sunrun’s favor.
Sunrun recently announced a deal with the Ford Motor Co. (NYSE:F) that will see Sunrun act as the “preferred installer” of home charging stations that accompany Ford’s F-150 Lightning electric truck.
While RUN stock has risen 184% in the last 52-weeks, it is actually down 20% year-to-date at its current price of $56.10 a share. However, the stock has rallied about 10% since the Morgan Stanley upgrade.
Clean Energy Stocks: Brookfield Renewable Energy (BEP)
Looking north now to neighboring Canada and Brookfield Renewable Partners. The company is one of the biggest clean energy companies in the world.
Brookfield has more than 200 hydroelectric power plants, 100 wind farms and more than 550 solar facilities. Combined, Brookfield Renewable Energy’s assets generate 21 gigawatts of power (which is a lot), and the company claims to have another 27 gigawatts in its development pipeline.
In addition to its appeal among clean energy stocks, Brookfield Renewable is also notable for its dividend payouts.
The company has raised its annual dividend every year since 2012, growing it at a compound annual rate of 6%. Brookfield’s dividend yield is currently a hefty 3.1%.
BEP stock has risen 45% in the past year and 146% over the last five years. But this year, the share price is down 14% at $37.93 a share.
Investors should view the current downturns as a buying opportunity. The median price target on the stock is $43.50, which would give investors a 15% gain from today’s price.
Disclosure: On the date of publication, Joel Baglole held a long position in RUN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
