SPECIAL REPORT The Top 7 Stocks for 2024

3 Climate Change Stocks to Profit From the Eco-Trends Boom

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  • Stocks focused on the overall goal of caring for the environment stand to turn big profits.
  • NextEra Energy (NEE): This company is the world’s largest generator of energy from wind and solar.
  • First Solar (FSLR): This leading solar stock has risen over 200% from the last five years.
  • Toyota Motor Corp. (TM): The Japanese automaker has turned its focus to electric vehicles under a new CEO.
stocks to profit from climate change - 3 Climate Change Stocks to Profit From the Eco-Trends Boom

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After a summer of record heat, raging wildfires, and extreme flooding around the globe. And the impacts of climate change are being felt even more acutely. Insurance giant Swiss Re estimates that climate change could cost the global economy $23 trillion by 2050.

Corporations around the world are becoming involved with mitigating change. Understandably, companies focused upon helping the world lessen its dependence on fossil fuels are attracting attention from governments and investors.

Whether wind, solar, or hydropower, alternative energy stocks are looking to reduce impact on the ozone layer. This is causing investor eyes to follow them. Equally hot are stocks of electric vehicles and related infrastructure tools.

Let’s explore three climate change stocks to profit from the eco-trends boom.

NextEra Energy (NEE)

An image of engineers analyzing wind turbines over the hill, data imposed over the image
Source: ConceptCafe/Shutterstock

Investors looking for a buying opportunity should consider NextEra Energy (NYSE:NEE).

The company’s share price is down nearly 20% year to date (YTD), though NEE stock is up 62% over five years. Also, the stock has a low price-earnings (P/E) ratio of 16. It even pays a strong quarterly dividend of 47 cents a share, which gives it a yield of 2.76%. While NEE is a major  U.S. and Canadian electricity provider, it’s also the world’s largest generator of renewable wind and solar energy.

Lagging this year, the company is targeting 9% earnings growth for the company’s current fiscal year. This represents about 50% greater than average 6% earnings growth of most U.S. utilities. Wolfe Research recently called NextEra Energy a “best-in-class, high-growth utility” and praised the company’s strong balance sheet. They gave an “outperform” rating on NEE stock and an $89 price target, which is 32% higher than where the shares currently trade.

First Solar (FSLR)

First Solar logo on smartphone in front of computer screen with graphs. FSLR stock
Source: IgorGolovniov / Shutterstock.com

First Solar (NASDAQ:FSLR) continues to outperform.

The stock has risen 27% over the last 12 months and is up 235% over five years. They are outpacing the gains seen in many mega-cap tech companies in the same time period.

First Solar makes solar panels and covers the entire life cycle of the products it manufactures. The company even takes care of the financing and end-of-life recycling of its solar panels sold to both residential and commercial customers.

FSLR remains one of the best performing solar stocks available to investors. However, the big run by the company’s stock has driven the valuation up. FSLR stock currently trades at a sky high P/E ratio of 111. Thus, the share price is currently 30% below its 52-week high. No dividend is being offered by the company, which has been a going concern since 1999.

Yet, First Solar remains a strong growth stock that is continuing to take market share in the fast moving solar industry.

Toyota Motor Corp. (TM)

Toyota motor corporation logo on dealership building
Source: josefkubes / Shutterstock.com

Under new CEO Koji Sato, Toyota Motor Corp. (NYSE:TM) has finally gotten serious about electric vehicles.

This past June, the Japanese automaker announced a new, comprehensive EV strategy. The plan includes a goal of achieving sales of 1.5 million electric vehicles per year by 2026. Additionally, it anticipates selling 3.5 million battery-powered vehicles annually by 2030.

Also, the company is developing a method for mass producing solid-state batteries for EVs, aiming to commercialize the technology by 2028. Toyota is targeting a minimum driving range of 1,000 kilometers (621 miles) on a single battery charge for all of its future electric vehicles.

The new focus on EVs represents a major shift for Toyota. It formerly concentrated on developing gas-electric hybrid vehicles. Analysts and investors have praised TM’s shift towards fully electric cars, trucks and SUVs. The stock has risen 38% since the EV strategy was unveiled in June, bringing its five year gain to 50%.

On the date of publication, Joel Baglole 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.


Article printed from InvestorPlace Media, https://investorplace.com/2023/09/3-climate-change-stocks-to-profit-from-the-eco-trends-boom/.

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