- Green energy has been a hot topic as prices climb, and these three stocks stand to benefit
- First Solar (FSLR): Two major plants will be coming online significantly boosting production
- Clearway Energy (CWEN): Coming off an incredible 2021 with aggressive asset expansion and financial flexibility
- Brookfield Renewable Partners (BEP): Robust existing asset base and portfolio of projects
The renewable energy industry has been booming, and green energy stocks should take to the skies over the next decade, presenting an incredible long-term investment opportunity.
Concerns surrounding climate change are forcing governments across the globe to throw their resources into the green energy sector. According to Bloomberg, more than $755 billion was invested in the energy transition last year, a 21% bump from 2020.
The decarbonization of the world’s economy is estimated to cost over $100 trillion over the next 30 years.
In August last year, the U.S. Senate passed a whopping $1.2 trillion infrastructure plan, allocating substantial funding to accelerate green energy investments.
Experts consider it a downpayment on the colossal amount of spending needed to decarbonize the economy. With that being said, here are three green energy stocks that are pushing the needle for the sector.
|BEP||Brookfield Renewable Partners||$33.87|
First Solar (FSLR)
Two massive new plants will be coming online for the company by next year with its next-generation Series 7 panels. Once the manufacturing of its 3.3 gigawatt Ohio facility is complete, it will become one of the largest integrated solar photovoltaic (PV) developers.
The company plans to make headways in the Indian solar PV market, which could grow exponentially by 2024. First Solar will be constructing its second Series 7 plant in Tamil Nadu, India, which will be complete by the second half of 2023.
India is looking to double its solar PV manufacturing capacity by 2024, so the Tamil Nadu plant initiative fits well within its expansion efforts. FSR stock has an incredible growth runway ahead, powered by multiple catalysts.
Clearway Energy (CWEN)
Clearway Energy (NYSE:CWEN) is one of the leading renewable energy pure-plays in the U.S. It operates an extensive wind, solar and natural gas portfolio and district energy assets.
The company significantly increased its green energy asset base along with free cash flows last year. Its free cash flows closed out at an enormous $550 million, a 30.60% improvement from last year.
Moreover, it ended the year with $820 million in growth investments.
Fiscal 2022 could perhaps be an even stronger year for asset expansion on the back of the company’s sale of its thermal business. It expects net proceeds of $1.35 billion coupled with investment capital of $750 million. This provides the company with enough financial flexibility to execute its objectives.
Moreover, management plans to achieve the upper range of its 5% to 8% dividend growth objective by 2026. It offers an amazing 4.40% yield with a consistently growing payout. Also, the stock trades at 2.33 times forward sales, an amazing number considering its growth trajectory in recent years.
Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners (NYSE:BEP) is another top pure-play renewable power business globally. Its portfolio consists of hydroelectric, solar, wind and energy storage facilities across multiple continents totaling over 21,000 megawatts of installed capacity.
Moreover, its development pipeline also constitutes 62,000 megawatts. With a robust pipeline of growth projects, the firm will likely perform incredibly well for years to come.
The company has been growing its business at a stable pace. Revenue growth has averaged 5% in the past five years.
More importantly, its margins have increased by double-digit percentages resulting in healthy free cash flow expansion. Last year was an anomaly for the business, as its capital expenditures weighed down its free cash flows.
Furthermore, BEP stock offers an eye-catching 3.30% dividend yield. Hence, the stock is perhaps suitable for both growth and income-oriented investors.
On the date of publication, Muslim Farooque 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