While hydrocarbons still power the world, increasingly, green and sustainable infrastructure is flexing its muscle. In full disclosure, the idea that all energy sources will be sustainable might be a stretch. Nevertheless, the sector is booming and with rising investments, it’s a good idea to consider the best renewable energy stocks.
Fundamentally, the narrative comes down to scientific realities. An overwhelming consensus of scientists agree that climate change is real. Further, earth is practically speaking the only planet that can sustain human life. We must be good stewards of our home. In order to promote zero-emission goals and other climate-forward initiatives, renewable infrastructure will be part of the discussion.
Second, due to innovations such as artificial intelligence, global energy demand has only increased. Because of this dilemma, green and sustainable energy infrastructure will almost be integrated into the broader discussion because of the need for greater supply. Combined with political and ideological winds favoring the movement, these best renewable energy stocks stand on fertile ground.
NextEra Energy (NEE)
Falling under the broader regulated electric utility sector, NextEra Energy (NYSE:NEE) through its subsidiaries generates, transmits, distributes and sells electric power to retail and wholesale customers in North America. It generates said power through a variety of means, such as wind, solar, natural gas and nuclear. It also develops and operates long-term contracted assets.
I can’t say that NextEra is the most exciting idea among the best renewable energy stocks. However, it belongs on this list in part due to its storied status. In addition, it’s a consistent financial performer. In the past four quarters, the company posted an average earnings per share of 81.3 cents. This print translated to an average earnings surprise of 9.53%.
During the trailing 12 months (TTM), EPS came out to $3.66 on revenue of $27.13 billion. During the most recent quarter, the year-over-year growth rate in EPS and sales came out to 8.7% and down 14.7%, respectively.
For fiscal 2024, experts see 7.6% EPS expansion to $3.41. Revenue may dip 1% to $27.85 billion. Still, let’s not ignore the forward annual dividend yield of 2.92%.
Ormat Technologies (ORA)
One of the most intriguing names among the best renewable energy stocks, Ormat Technologies (NYSE:ORA) specifically falls under the renewable utilities space. Primarily, the company specializes in the geothermal and recovered energy power business. It also features a energy storage business unit. The real long-term moneymaker could be the geothermal unit, though, which involves extracting practical power from the earth’s core.
A key advantage of geothermal infrastructure – aside from the earth producing effectively unlimited energy – is that it’s largely out of sight, out of mind. That’s unlike the ugly wind turbines that represent eyesores for surrounding neighborhoods. Geothermal is more of a speculative mechanism at the moment. Still, Ormat’s financials are quite decent, producing an earnings surprise of nearly 22% in the past four quarters.
In the TTM period, Ormat generated EPS of $2.21 on revenue of $868.36 million. In the most recent quarter, it posted earnings and revenue expansion of 32.9% and 21%, respectively. For fiscal 2024, analysts see modest decline in EPS to $2.04. However, the top line could rise by 7.6% to $892.1 million.
Clearway Energy (CWEN)
One of the more speculative ideas among the best renewable energy stocks to buy, Clearway Energy (NYSE:CWEN) is largely appropriate for those who want to take big swings at the plate. Falling under the renewable utilities ecosystem, Clearway features a mix of conventional and renewable energy generation projects. Mostly, the mix consists of wind, solar and natural gas.
Since the start of the year, CWEN stock dropped more than 11% of equity value. In the past 52 weeks, it’s down almost 16%, which hasn’t provided much confidence for prospective investors. At the same time, there might be a case that Clearway is presently undervalued. Right now, shares trade at 2.19X trailing-year sales. Between the first quarter of 2023 to Q1 2024, the average price-to-sales ratio landed at 2.42X.
Still, it’s a risky proposition. During the TTM period, Clearway’s net income reached $77 million on revenue of $1.29 billion. However, the most recent quarterly sales growth was almost 9% down. Nevertheless, analysts rate CWEN a consensus strong buy with a $31 average price target. That implies almost 29% upside potential.
Finally, a forward dividend yield of 6.81% just might entice market gamblers.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
