Our planet is constantly facing great challenges, and natural resources are part of them. Energy is absolutely vital in our society, but we know the traditional fuel sources that allow us to generate energy are limited. For that, companies are working, researching and constantly developing methods to create renewable energy. They not only create different sources of energy production but also contribute to a cleaner world. Here are three undervalued renewable stocks, where you can invest if you want to participate in this sector.

NRG Energy (NRG)

One of the most committed companies in the world of renewable energy is NRG Energy (NYSE:NRG). Its commitment can be recognized by its positive financial track record, including a modest $1.15 billion share buyback in 2023.

The company remains ever-forward-looking, with a focus on growth for 2024, where its financial outlook already exceeds the expectations offered during the 2023 Investor Day Plan. This year’s capital allocation plan, allocating $1.16 billion for shareholders and $500 million for debt reduction, confirms its commitment to maximizing value.

During the third quarter, NRG had a GAAP net income of $343 million. The completion of the $1.75 billion sale of STP adds a positive point to the company’s financial position.

In addition to these good numbers, the recent Senior Notes Offering is worth up to $600 million, reflecting a strategic move to optimize its debt structure.

NRG is not sitting idle, of course. If it has its sights set on the future, the company needs to make strategic moves. Currently, through its Direct Energy subsidiary, NRG is renewing ties with the Western Pennsylvania Energy Consortium, which makes it a contributor to the sustainability goals of Pittsburgh.

SolarEdge (SEDG)

This company is undoubtedly an incredible business, attracting the attention of investors in the smart energy sector. SolarEdge’s (NASDAQ:SEDG) performance during the third quarter of 2023 is evidence of its financial strength. Its revenues reached $725.3 million, driven by a $676.4 million contribution from the solar segment.

In addition to those good revenues, SEDG maintained an incredible gross margin of 24.0% in the solar segment. Without a doubt, to achieve that margin, a company must have a wonderful operating skill. Of course, SolarEdge has it.

Among its most recent releases were the SolarEdge 330 kW Inverter and the H1300 Power Optimizer. These wonderful products stand out for their completely flexible installation options, allowing them to obtain a better return on investment, utilize incredible security features and monitor at the module level.

SEDG’s innovation also encompasses energy storage, where its SolarEdge Home Battery joins Xcel Energy’s (NASDAQ:XEL) Renewable Battery Connect program in Colorado. SolarEdge Home Battery owners can earn incentives.

SolarEdge’s focus on reducing the Levelized Cost of Energy (LCOE) is evident. Its 330 kW inverter allows for 99% efficiency, 200% DC oversizing and an integrated PID rectifier, helping the company meet the goal of reducing BoS costs by up to 50%.

Vistra (VST)

Last but not least, we have Vistra (NYSE:VST), also a key player in the renewable energy sector.

During the third quarter, the company reported wonderful numbers, where its financial success was evident with a net income of $502 million and net income from continuing operations of $519 million.

For 2023, VST expects adjusted EBITDA from continuing operations and adjusted free cash flow from continuing operations amid $3.95 billion to $4.10 billion and $2.35 billion to $2.50 billion, respectively. Vistra certainly knows what it is doing and has its financial goals straight.

To continue talking about the company’s successes, its generation fleet achieved an incredible 98% commercial availability during the challenging ERCOT summer conditions.

Also, its subsidiary, TXU Energy, received accolades as a 5-star retailer for 12 consecutive months, no less. That, once again, confirms its stability and strength in the sector.

But it doesn’t stop there. VST’s subsidiary entered into a multi-year partnership to provide electricity to the University of Houston System. That partnership will not only ensure electricity supply to the university but will also provide it with substantial investments in scholarships and energy efficiency projects.

As of this writing, Gabriel Osorio-Mazzilli did not hold (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.