The shift from traditional energy to fossil fuels was pivotal but unsustainable and polluting.
Now, a transition to renewables, like solar and wind, is vital. They are expected to replace coal by 2050, and potentially even gas and oil, with more ambitious climate goals.
True, investor interest in renewable energy stocks may have waned, but the sector still holds substantial growth potential. Despite recent stagnation, the ongoing shift toward renewable energy promises significant returns in the coming years. Investing in undervalued renewable energy stocks now could yield substantial gains.
Thus, let’s examine some of the best to consider owning for the long-term.
Brookfield Renewable (BEP)
Brookfield Renewable Partners (NYSE:BEP) boasts a strong global presence and stands to gain from growing demand for renewable energy. The company excels in hydro, wind, and solar power, and manages assets efficiently through long-term power purchase agreements.
BEP is a global leader in renewable power and sustainability solutions, with a diverse portfolio spanning hydroelectric, wind, solar, and more across five continents. BEP stock, up 17% year to date (YTD), aims to overcome a June setback, with potential targets at $30.30, $31, and $32.50-plus.
Additionally, Brookfield Renewable posted strong Q1 earnings of $424 million, driven by robust operational performance and a 15% growth in their asset management business. In fact, their focus on insurance solutions is also fruitful, enabling reinvestment. The company aims to further expand and is planning to acquire shares of American Equity Investment Life Holding Company (NYSE:AEL), reaffirming their commitment to a sustainable future.
Jinkosolar Holding Company (JKS)
JinkoSolar (NYSE:JKS) leads in solar energy. China’s solar power production is set for a 30% increase, backed by JinkoSolar’s innovation.
In fact, Q2 results surpassed expectations with $3.06 EPS (vs. $2.26 estimated) and $4.23 billion in revenue (vs. $210 million expected). They delivered 18,613 MW, up 28.5% sequentially and 76.7% year over year (YOY).
And, JinkoSolar’s advanced N-type modules account for 58% of shipments and are projected to reach 60-65% in the near future. The company’s integrated operations provide cost advantages, and its global manufacturing presence helps mitigate regulatory risks and tariffs. The recent U.S. ban on Chinese solar imports has not affected JinkoSolar.
Further, JKS anticipates strong growth with full-year module shipments expected between 70-75 GW. The stock trades at a low multiple and avoided recent U.S. tariffs. Also, it’s a leader in environmental initiatives. Potential for significant upside remains as bearish momentum wanes.
Enphase Energy Inc. (ENPH)
Enphase Energy (NASDAQ:ENPH) leads in microinverters and solar systems for homes and businesses. Recent guidance challenges aside, it’s a solar industry contender. The company faced 2023 declines due to solar industry challenges, despite strong YOY growth. Clearly, it’s a long-standing micro-inverter solar leader.
In Q2, it surpassed profit estimates but slightly missed revenue projections. Q3’s outlook, $550 million to $600 million, falls below the $746 million consensus. This is due to inventory management, notably in the U.S. residential market, and European seasonal trends.
In fact, the company aims to utilize tax credits for manufacturing jobs and boost micro-inverter production to 10M per quarter. Revenues reached $711 million, a 34% YOY increase, with earnings per share coming in at $1.09, up 102%. Enphase’s valuation has significantly decreased from its 2022 peak, with its price-earnings ratio dropping from over 200-times to under 30-times over the past two years.
On the date of publication, Chris MacDonald 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.
