It’s safe to say that in general green energy and green energy stocks are in a long-term bull market. As time goes on, people everywhere are becoming increasingly conscious of a greener economy and environmentalism at large.
Green energy is a blanket term which encompasses many things. If you’re like me, “green energy” first conjures up images of solar panels. For others it might be electric vehicles, biofuels or any other product and service that helps reduce our impact on the planet.
The recent United Nations global climate summit in Glasgow is a great example of green energy and the market. For some, claims that COP26 was our “last, best hope” ring a bit too alarmist. But, in any case, the positive news is that at the conference, industry leaders and heads of state showed up in force. Their promises to take action show that climate issues have the market’s attention. That’s a strong sign for the sector.
Pressure to become more environmentally responsible is a clear mandate for companies. Those that heed the call will see the market reward their stockholders. That momentum will continue into 2022, making these seven stocks worth your time.
- Capstone Green Energy (NASDAQ:CGRN)
- Amyris (NASDAQ:AMRS)
- Clearway Energy (NYSE:CWEN)
- Azure Power Global (NYSE:AZRE)
- ChargePoint (NYSE:CHPT)
- Hannon Armstrong Sustainable Infrastructure (NYSE:HASI)
- Enphase Energy (NASDAQ:ENPH)
Green Energy Stocks: Capstone Green Energy (CGRN)
Capstone Green Energy is an investment that inherently carries a bit more risk. It does trade below $5, so technically it is a penny stock. The encouraging news there is that all four analysts with current coverage rate it a “buy.” They also give it an average target price of $13. There’s plenty of upside to be sure.
Capstone Green Energy provides a suite of clean energy solutions. Its products include energy conversion technology, storage solutions, and a range of hydrogen based products. Further, it provides energy-as-a-service (EaaS), basically energy maintenance, monitoring and management.
The company is well aware of the shifting consumption patterns of younger demographics. A recent presentation highlights the idea that “Gen Z, which comprises a third of the world’s population, is willing to pay 50%-100% more for sustainable products compared to older generations.” That’s a broader call for investing in green energy in general, not only CGRN stock.
The company has recently rebranded, but its financial position isn’t terrible relative to its stock price. In the second quarter (September end), Capstone Green Energy recorded $17.2 million in revenue and a $6.0 million EBITDA loss. That isn’t great, but if the company can drive more demand for its higher margin EaaS business losses could turn positive overnight.
Amyris is a company focused on synthetic bioscience solutions. So, it doesn’t strictly deal with ‘green energy’. Instead, the company provides cleaner ingredients for consumer brand products.
Amyris creates biosynthetic versions of chemicals used in cosmetics, shampoos, fragrances, sweeteners, and skincare products. And it has its own line of products.
Essentially, the company provides greener products, which should make it interesting to investors broadly interested in green energy.
Amyris is a bit of a contrarian pick here. AMRS stock fell off a cliff on Nov. 8. It was that day that the company announced it was offering $400 million of senior convertible notes due in 2026. That offering ultimately was upsized to $690 million by a week later.
Amyris also reported Q3 earnings on Nov. 8. Revenues hit $36.5 million in the quarter, up from $27.6 million a year prior. It is fair to characterize Amyris as a risky, buy-the-dip play. If the company can direct those proceeds from the senior notes toward growth, there’s reason to be excited.
That’s because AMRS stock carries a target price of nearly $21, but trades for less than $6 now.
Green Energy Stocks: Clearway Energy (CWEN)
Clearway Energy is a company with over 8,000 megawatts of energy-producing assets. Of those 8,000 MW of energy assets, 4,700 are installed wind and solar generation projects. That makes Clearway Energy one of the largest U.S. renewable energy owners. The company has a presence across 25 states.
CWEN stock is a fairly safe play for green energy investors. It offers a chance at strong price appreciation balanced by a dividend yielding 3.58%. Its recent earnings report confirmed that the company is on track to continue to do well.
“In the near term, Clearway remains on track to meet its financial objectives. Year to date, results are in-line with our performance sensitivities and the growth outlook into 2022 is on target as our sponsor’s remaining 2021 construction projects and the recently announced acquisition of the remaining interest in the Utah Solar Portfolio are all expected to close by year end.”
The closing of the Utah property will be helped by the company’s $1.9 billion sale of its thermal business. And the firm remains confident that dividend increases will be near the upper end of the 5%-8% target.
Azure Power Global (AZRE)
There are at least two immediate reasons to be bullish on Azure Power Global. The first is simple target price projections which suggest AZRE stock could nearly double from current levels.
The second is that Azure Power is an Indian firm that pioneered solar energy in the massive South Asian nation. India is a perhaps overlooked region when it comes to renewable energy. Azure developed the first private utility scale solar project in 2009. But it is a significant player and solar is leading the way, as JMK Research noted: “India’s overall installed renewable energy capacity has reached 101.53 GW as of September 30, 2021. Solar energy, with a 46% share, is the biggest contributor to this capacity, followed by wind energy (39%), biomass (10%) and small hydro (5%).”
Azure power’s most recent earnings were attractive as well. The firm posted $59.7 million in revenue, up 13% YoY, and $49.3 million in EBITDA, up 11% YoY.
Azure Power also has the second-largest portfolio of solar power in India, about 30% of which is operational. Once fully operational, Azure Power could move significantly higher. So, the narrative then is strong current growth with the potential for much more significant growth moving forward.
Green Energy Stocks: ChargePoint (CHPT)
ChargePoint is the pure-play, publicly traded EV charging station stock with the biggest valuation. Its market capitalization currently sits at $7.6 billion. It is one of the early leaders in the space which makes it strongly worth considering for green energy enthusiasts.
Emerging infrastructure plays generally make sense. Those who control the movement of things tend to capitalize. ChargePoint is an EV charging leader with 118,000 activated ports, 5,400 of which are in Europe. The company also counts 3,700 DC fast chargers among that total.
The company is expecting between $225 million-$235 million in revenue in 2021 after it raised guidance following strong Q2 results. That alone is encouraging, and next year the growth is slated to continue.
The 15 analysts covering ChargePoint expect the firm to record approximately $370 million in 2022 revenues. There are even suggestions that the figure could reach as high as $414 million.
Hannon Armstrong Sustainable Infrastructure Capital (HASI)
Hannon Armstrong Sustainable Infrastructure Capital’s business is pretty much explained by its name. The firm provides capital and specialized expertise to the sustainable infrastructure market.
The firm is relatively young, having been incorporated in 2012. But it’s also relatively stable for a firm of its age, and recently began providing a modest dividend yielding 2.37%. Current investors are very well apprised of what to expect from that dividend moving forward, “The Company also expects that annual dividends per share will grow at a compound annual rate of 3% to 5% from 2021 to 2023, relative to the 2020 baseline of $1.36 per share, which is equivalent to a 2023 midpoint of $1.53 per share.”
Hannon Armstrong touts itself as the first U.S. public company solely dedicated to investments in sustainable infrastructure markets. It manages $8 billion in assets in total.
Analysts expect HASI stock to trade around $70 in the future, higher than current $60 levels.
Green Energy Stocks: Enphase Energy (ENPH)
Enphase Energy is the most recognizable name on this list of green energy stocks. The California solar power firm carries a market capitalization in excess of $30 billion and is often talked about.
More specifically, the company focuses on micro inverter-based solar energy storage systems. In fact, it is the world’s leading supplier of such systems. Enphase is a strong company financially.
It posted record revenues in Q3, which hit $351.5 million, and a net income of $21.8 million. The company sold nearly 2.6 million micro inverters in the quarter along with 65 megawatt hours (MWh) worth of its branded storage systems.
Enphase anticipates that record $351.5 million of Q3 revenue to rise to between $390 and $410 million in Q4. It also anticipates shipping 90 MWh of storage systems, a 38.5% increase sequentially.
The company is dealing with multiple issues including snarled supply chains and rising costs, but expect it to continue to thrive.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.