Though green energy stocks have had their trials and tribulations, the sector presents big rewards for those willing to risk the volatility. With the political and ideological winds favoring the green evolution, it’s a viable arena.
According to Precedence Research, the global renewable energy market reached a valuation of $970 billion in 2022. By 2032, the sector could exceed over $2.18 trillion. If so, such an expansion would represent a compound annual growth rate of 8.5% from 2023.
Of course, projections are not guarantees. Still, because of the ambiguity involved, this sector offer high-return potential. If you’re willing to gamble, below are the green energy stocks to consider.
NextEra Energy (NEE)
One of the powerhouse names among green energy stocks, NextEra Energy (NYSE:NEE) generates and distributes electric power to retail and wholesale customers. It generates electricity through various means, including wind and solar. In addition, NextEra develops, constructs and operates long-term contracted assets that consist of clean energy solutions.
To be sure, NextEra has had its fair share of ups and downs. However, on a financial note, the company has been consistently robust. In the past four quarters, NextEra’s average positive earnings surprise came out to 9.53%. For the current year, analysts are looking at earnings per share of $3.40, above last year’s result of $3.17.
On the top line, covering experts project revenue to reach $27.86 billion. While that’s about 1% down from last year’s print of $28.11 billion, the most optimistic target calls for $32.68 billion. In the following year, revenue on the high side could reach $34.34 billion.
Lastly, NextEra offers a forward annual dividend yield of 3.06%. Overall, NEE makes for one of the top green energy stocks to buy.
Brookfield Renewable (BEP)
Based in Toronto, Ontario, Canada, Brookfield Renewable (NYSE:BEP) owns a portfolio of renewable power generating facilities. It primarily operates in North America, Colombia and Brazil. It generates electricity through hydroelectric, wind, solar and pumped storage means. In addition, it offers renewable natural gas and carbon capture among other services.
Now, what makes BEP one of the riskier ideas among green energy stocks is the lack of consistency. In the first three quarters of last year, the average quarterly surprise came out to a loss of 515.27%. However, Brookfield redeemed itself partially in the fourth quarter with an EPS of 1 cent. The target called for a loss of 4 cents.
For fiscal 2024, analysts are anticipating a loss of 80 cents, an unfavorable expansion from last year’s loss of 32 cents. Further, growth is expected to be modest with sales of $4.97 billion. Last year, revenue was $4.92 billion.
However, fiscal 2025 calls for revenue of $5.7 billion, up 14.6% against 2024 projected sales.
Algonquin Power & Utilities (AQN)
Headquartered in Oakville, Ontario, Canada, Algonquin Power & Utilities (NYSE:AQN) operates in the power and utility industries. It operates two segments: Regulated Services Group and Renewable Energy Group. Primarily, Algonquin owns and operates a regulated electric, water distribution and wastewater collection business. It also provides natural gas utility systems.
As with Brookfield Renewable, Algonquin’s performance has been all over the map during fiscal 2023. The average earnings surprise came out to 3.75% below parity. For the current fiscal year, analysts are looking for EPS of 51 cents with a high-side target of 54 cents. Last year, the company posted earnings of 53 cents per share.
On the top line, revenue may reach $2.94 billion, which would be 8.9% above last year’s print of $2.7 billion. Not only that, the most optimistic forecast calls for sales of $3.16 billion.
What could really entice investors is Algonquin’s forward dividend yield of 6.99%. While the payout ratio is sky high, those who want to speculate on green energy stocks may find AQN attractive.
On the date of publication, Josh Enomoto 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.
