The future is green. As the government and companies continue to prioritize renewable energy and its uses worldwide, so should investors. In addition to investing with morals, investing in renewable energy exposes investors to one of the most potent and high growing fields. With a CAGR of nearly 10% in the next nine years, investing in renewable energy is investing in one of the highest growing industries. Below are three of the most undervalued renewable energy stocks to buy in April.
Array Technologies (ARRY)
Array Technologies (NASDAQ:ARRY) is an American renewable energy company focusing primarily on solar tracking solutions. They are the world leader in solar tracking solutions and are present all over the U.S., Europe, Asia, Africa and Australia. Through their cutting-edge innovation, they help PV panels maximize energy output using their DuraTrack single-axis tracker technology.
The company is rapidly growing and recently showed plans to invest $50 million into a second solar tracking facility in Albuquerque. Array Technologies recently was involved in one of the largest solar projects in the U.S., providing trackers for over 750 MWdc in solar panels and showing the size of impact the company can have. The financial state of the company further supports the buy thesis.
Despite being on the smaller side, they can constantly reach profit. Array Technologies is a reliable company fiscally averaging a profit margin of over 10%. It has the privilege of paying profits to pay off debt and invest in R&D to gain a stronger foothold. They also have over $350 million in cash, providing funds to fall back on and easily pay most of their debt.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) focuses on manufacturing solar panels, utility-scale PV power plants and supporting devices. The company is a leader in the highly competitive solar space and is constantly innovating and perfecting its offerings. First Solar has invested over $1.5 billion in R&D, mostly from a $1.1 billion investment in a manufacturing facility in Iberia Parish, Louisiana. Building this facility allows the company to increase its manufacturing limits to over 3.5 gigawatts, placing it as one of the most potent solar companies in the world.
The company’s rapid growth as a more developed company is a testament to First Solar’s potential. First Solar is investing billions aggressively to beat out struggling competitors and be at the forefront of the solar race. Financially, it is also a sound investment. The company has a P/E ratio of 21.43, which is nearly half of the P/E ratio of the industry average of 37.4, showing the company is undervalued. Their revenue growth is also beyond impressive and unmatched, reaching over $1.16B in 2023 Q4 from just under $550 million in 2023 Q1.
Brookfield Renewable (BEP)
Brookfield Renewable (NYSE:BEP) is a leading American company in hydroelectric power production. Through owning various forms of energy, including primarily hydroelectric but also solar and wind, they sign long term PPAs, selling the bulk of their energy and providing them with solid and stable returns. The company has slowly expanded through acquisition and constant expansion of energy output.
The company’s financial standing further enforces the buy rating. It provides a hefty dividend of almost 6%, and is constantly increasing. At the same time, they aim to increase their dividend by 5% to 9% each year, providing immense value to investors from an already good investment. Even though the company is not consistently profitable yet, this will soon change, a catalyst that will prove the stock is worth more than the current discount it is trading for.
On the date of publication, Tomas Levani 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.
