There are many compelling reasons to invest in the best green energy stocks in July, or in any other month. According to Investopedia, one of the big reasons is a global push toward “Net Zero carbon emissions” by the year 2050. Much of the world is transitioning away from fossil fuels and toward energy sources that emit less carbon. And in order for the world to reach that net-zero goal, we’re going to have to make changes in how we power things.
For one, current data suggest that investment in renewables will need to triple in order for the net-zero emissions goal to be met. That strongly implies that the recent push for greener energy sources is more than just a fad.
Secular trends in energy use and the push for greener sources will continue in the coming years and decades. That means that the stocks and companies listed above should continue to perform well over the longer term.
And in the shorter term, these best green energy stocks are also likely to receive increasing attraction as the war in Ukraine continues to affect gas and oil prices.
|TAN||Invesco Solar ETF||$71.06|
|BEP||Brookfield Renewable Partners||$34.65|
Bloom Energy (BE)
Bloom Energy (NYSE:BE) engages in a unique niche within the green energy marketplace. The company manufactures a product called the Bloom Energy server. Bloom Energy servers convert natural gas or biogas into electricity by utilizing an electrochemical process that does not involve combustion.
That unique process aside, one of the primary reasons to consider investing in Bloom Energy is the current potential returns.
Based on its target stock price of over $24 and current price of under $18, there’s around 38% upside.
Another of the primary reasons to consider investing in Bloom Energy this month is that it continues to make progress in the European market. The European market itself is noted for being more accepting of green energy overall, and Bloom Energy has proven that to be the case with its June partnership with Ferrari (NYSE:RACE) in Italy. Ferrari is committed to utilizing Bloom Energy servers in order to reach carbon net neutrality by 2030
The general description of Albemarle (NYSE:ALB) as a company and stock is one focused on the development, manufacturing and marketing of chemicals for a variety of consumer markets. But that isn’t the reason that most people are interested in Albemarle currently.
Instead, the interest primarily has to do with the electric vehicle market and Albemarle’s position as a leading producer of lithium.
It’s difficult to say that ALB stock will necessarily jump in July. However, it’s reasonable to expect that might be the case.
Albemarle increased its full-year guidance back in May after renegotiating variable price contracts with its customers. That revised guidance means that both net sales and EBITDA figures for 2022 have significantly improved. For example, net sales guidance previously ranged from $5.2 to $5.6 billion. After the revision, that range moved up to between $5.8 to $6.2 billion.
However, keep in mind that there’s no immediate signal that the markets will prefer lithium producers in July as opposed to any other month.
However, if conditions change and lithium has some sort of catalyst then Albemarle will be among the first stocks to rise.
Simply following the price chart for Enphase (NASDAQ:ENPH) throughout 2022 indicates that ENPH stock is difficult to pin down. Overall, it’s up a very respectable 6% year-to-date. But that ride hasn’t been without serious volatility. Though it now approaches $200, it dipped below $120 in late January, only to move quickly upward, peaking above $215 by early April. It has seesawed back and forth since.
That might scare many investors away. However, given overwhelming analyst support and a target price of $225.86, meaning upside of over 16%, there’s reason to be positive.
On top of that, Enphase has produced earnings beats in each of the last four quarters.
Whether it jumps significantly higher in July remains to be seen. But it’s fair to assume that Enphase will trend upward over time. The company is undergoing rapid growth. It should see revenues increase more than 50% in 2022 and before tapering to 30% growth in 2023.
Both cases imply secular trends that favor Enphase as an investment.
Invesco Solar ETF (TAN)
Picking the winners and losers from any given sector is often difficult. In an industry like green energy, this could be especially difficult, as it’s a relatively young industry and companies that exist now may not exist tomorrow. That’s why Invesco Solar ETF (NYSEARCA:TAN) makes sense.
The Invesco Solar ETF is designed to track the performance of The Mac Global Solar Energy Index. Enphase, which I mentioned above, represents the largest holding in this ETF.
Year-to-date, TAN stock has fallen from the $78 level to around $71 at present. The positive here is that it has a relatively low expense ratio of 0.66%, or 66 cents per $10,000 invested annually.
The other positive is that the Invesco Solar ETF has performed very well over the prevailing three-year, five-year, and 10-year periods.
Over each of those time frames, it has outperformed its benchmark, sometimes significantly.
The reason to buy SunRun (NASDAQ:RUN) stock in July is that Goldman Sachs (NYSE:GS) had given it the thumbs up in late June.
Analyst Brian Lee maintains a “buy” rating for SunRun based on what he sees as better execution which is positively affecting growth and margins.
Lee simultaneously downgraded his ratings for two of SunRun’s competitors, Sunnova Energy (NYSE:NOVA) and SunPower (NASDAQ:SPWR).
The bullish thesis for SunRun in July, then, is that investor capital could flee from the previous two mentioned shares and into SunRun based on Lee’s advocacy.
RUN stock currently trades below $25 but the Goldman Sachs analyst believes it is worth $36, implying substantial upside over the next year.
The average target price for RUN stock is an even higher $46.98.
XPeng (NYSE:XPEV) stock will continue to be volatile. It represents EV stocks, growth and China. Any of those categories are highly sensitive to market news. So when you combine all three, XPEV could logically move up, or down, very quickly.
The reason to believe it might move upward in July is rooted in reports related to deliveries from May. A Barron’s report from late May suggested that XPeng is expected to deliver between 31,000 and 34,000 vehicles in the second quarter.
The company delivered 10,125 in May when all was said and done. There’s reason to believe that sales could be heating up quickly, though, as electrification trends in China are rising quickly. That could mean that EV sales jumped substantially as lockdowns ended.
If that’s the case, XPeng could be at the higher end of that sales range predicted in May.
Brookfield Renewable Partners (BEP)
The bullish thesis around Brookfield Renewable Partners (NYSE:BEP) stock can be found at the beginning of this article. That is, the notion that investment in green energy will need to triple in order for those 2050 global net-zero carbon goals to be met.
Brookfield is essentially headed toward that goal currently. Its portfolio of projects includes hydroelectric, solar, wind and storage facilities across multiple geographies and totals more than 21,000 megawatts of capacity. Its pipeline of current projects is expected to total roughly 69,000 megawatts of energy when installed.
BEP stock is another analyst favorite with reasonable upside based on price expectations. Its broad-reaching impact and diverse holdings make it a safe bet in green energy for the long-term investor.
On the date of publication, Alex Sirois 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.