This might be the best time to dip your toe into solar stocks.
Solar energy is one of the fastest-growing industries in the world, as more countries and companies invest in renewable sources of power to combat climate change and reduce their dependence on fossil fuels.
According to the International Energy Agency, solar photovoltaic capacity increased by 26% in 2022, reaching 1300 terawatt hours globally. The IEA projects that solar PV will account for 22% of global power capacity by 2027.
Although higher gas and oil price spikes made solar stocks rally in 2022, as energy prices retreated in 2023, enthusiasm for renewables has temporarily dampened.
Still, investors who want to capitalize on the renewable energy trend, should begin looking now into the best solar energy stocks in the market.
Therefore, here are three solar stocks with high prospects to reap investors returns in 2024.
SunPower Corporation (SPWR)
In operation for over 30 years, SunPower Corporation (NASDAQ:SPWR) is a leading manufacturer of high-efficiency solar panels and systems for residential, commercial, and utility-scale customers.
The company also offers energy storage, software, and financing solutions to help customers optimize their solar investments. SunPower’s breadth of solutions are complemented by its vast global presence.
SunPower has been growing its revenue and earnings at a robust pace in the past two years, driven by strong demand for its products and services across all segments.
In 2022, the company reported revenue of $1.7 billion, up 54% year-over-year, and adjusted earnings per share of $0.59, up 1861% YoY. In the first half of 2023, the company generated revenue of $903 million, up 18% YoY.
Compared to last year’s quarterly results, revenue growth in 2023 has definitely compressed. This is because of the broader macro-environment, which has not stimulated demand for novel products, like solar technology.
Despite short-term headwinds, SunPower has the ability to outperform in 2024 and beyond. A favorable policy environment in the U.S. and abroad will play a key role in the company’s future performance.
Shares are down more than 60% year-to-date, which makes this one of the more tempting solar stocks out there.
Enlight Renewable Energy Ltd. (ENLT)
Enlight Renewable Energy (NASDAQ:ENLT) is an Israeli company that develops, builds, and operates renewable energy projects, primarily in solar and wind power.
The company has a vast portfolio of projects with a total capacity of more than 19 GW in 11 countries, including Israel. In the beginning of this year, the company had its initial public offering and was able to raise $252 million from primary investors.
An IPO and 19 GW of total energy capacity in its portfolio are only a couple of areas where the company has achieved remarkable growth. Enlight has grown annual revenues substantially thanks to its successful execution of its project pipeline and its entry into new markets.
In 2022, the company reported revenue of $192 million, up 88% YoY, and EPS of $0.25, up 109% YOY. The company’s quarterly earnings have been hit or miss this year.
In the first quarter, revenue came out strong with 103% year-over-year growth, while net income was up 275% year-over-year. However, in the second quarter, that growth compressed.
Revenues increased by 32% from the same period in 2022, while net income growth remained strong.
While Enlight’s near-term outlook looks choppy due to lower electricity prices, the company’s outlook in the long-term remains robust, as it aims to reach 4.6 GWh and 3.6 GWh of operational projects by the end of 2025.
The company has a diversified project pipeline across various geographies and technologies, with a focus on emerging markets with high solar potential and attractive regulatory frameworks.
Canadian Solar Inc. (CSIQ)
Canadian Solar (NASDAQ:CSIQ) is one of the world’s largest solar module manufacturers and project developers.
The company produces high-quality solar modules for residential, commercial, industrial, and utility-scale customers worldwide, including in Asia, the Americas, and Europe.
Canadian solar also develops high-quality solar power and energy storage systems for residential, commercial, industrial, and utility-scale customers worldwide.
Similar to the two entries above, Canadian Solar had impressive revenue and earnings growth in the past two years, which was fueled by a strong global demand for solar energy and projects.
In 2022, the company reported revenue of $7.5 billion, up 41% YOY, and EPS of $3.44, up 136% YOY. Canadian Solar has a bright growth outlook for 2024 and beyond, as it continues to expand its production capacity and improve its cost structure and efficiency.
In the first quarter of this year, the solar company beat earnings on an EPS-basis. Canadian Solar also now expects total revenues to come between $9.0 and $9.5 billion, which is up from the previous guidance that had given a wider range of $8.5 to $9.5 billion.
With positive secular trends and good fundamentals, Canadian Solar should be on investors’ radars.
On the date of publication, Tyrik Torres 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.
