Renewable energy is becoming an exciting venture. The field is helping to preserve the environment and creates new industries, and may make electric cars more affordable. If you want to get your investment portfolio involved in the green revolution, you can start by investing in these top renewable energy stocks.
Investing In Top Renewable Energy Stocks
The global economy is slowly switching power sources, gradually backing away from fossil fuels toward renewable energy sources. Many people have personal or ethical reasons to invest in renewable energy. But helping the planet isn’t the only potential benefit of including renewable energy in your portfolio. Investing in alternative energy can help diversify your holdings as well.
Renewable energy itself is becoming more affordable, making it more enticing to buyers and potential investors. Clean energy is the future and investors should position their portfolios to capitalize on the green energy revolution that is gathering momentum around the globe.
Top 5 renewable energy stocks to watch:
1. First Solar (NASDAQ:FSLR)
First Solar has developed, financed, engineered, constructed and currently operates many of the largest grid-connected Photovoltaic (PV) power plants around the globe. These larger modules produce electricity at a lower cost per watt than the traditional silicon-based panels.
They also perform better in more extreme environments. Such, as in hot and humid conditions as well as shedding snow and debris quicker. Another factor that makes First Solar stand out in the panel manufacturing sector is its strong balance sheet. The company regularly carries a large net cash position, which provides it with interest income.
Most of their competitors, on the other hand, have lots of debt on their balance sheets and are therefore paying interest to third-party lenders. First Solar’s financial strength not only further reduces its costs but it also provides the ability to continue expanding its manufacturing capacity.
2. NextEra Energy (NASDAQ:NEE)
NextEra Energy is the owner of Florida Power & Light Company. Which is the largest rate-regulated electrical utility in the United States as measured by retail electricity produced and sold. Which helps make NextEra one of the top renewable energy companies in the world.
It seeks a target of 100% carbon pollution-free electricity by 2035 with new clean water and air standards. They are taking steps to reduce methane emissions. NextEra is the holder of one of the highest credit ratings among the largest electric utilities.
It also controls NextEra Energy Partners (NYSE:NEP), which provides additional investment opportunity. Due to it’s ability to sell contracted clean energy assets to its affiliate for cash to reinvest in new opportunities.
3. Brookfield Renewable Partners (NYSE:BEP)
Brookfield Renewable Partners operates one of the world’s biggest publicly traded renewable energy platforms. Its portfolio consists of over 5,300 generating facilities in Europe, Asia, North America and South America. Brookfield is one of the bigger renewable energy companies. It sells most of the power it produces under long-term, fixed-rate power purchase agreements (PPAs).
Those contracts provide it with steady cash flow, which it uses to pay an attractive dividend and invest in expanding its portfolio. The company also holds a strong balance sheet with one of the best investment-grade bond ratings in the renewable energy sector, along with lots of cash and available credit to help finance growth.
Brookfield has the financial clout and capability to invest $800 million to $1 billion per year into expanding its renewable energy portfolio through 2025, with a focus on new solar energy developments. These investments show potential for annual growth in cash flow growth per share of 10% to 16%.
It supports yearly increases in its dividend of 5% to 9%. It makes this pick one of the best renewable energy stocks to invest in.
4. Sunrun (NASDAQ:RUN)
San Francisco-based Sunrun recently got an impressive upgrade from investment bank Morgan Stanley (NYSE:MS), which raised its rating on the stock to “overweight” and slapped an $86 price target on it.
Morgan Stanley said that Sunrun was a victim of an industry-wide sell-off in recent weeks and noted that, at its current price cresting $57, RUN stock represents excellent value with lots of upside potential.
Sunrun was formed in 2007, and pioneered residential solar service. They currently have over 550,000 current customers in 22 states, DC & Puerto Rico.
5. Vestas Wind Systems (NASDAQ:VWDRY)
Vestas Wind Systems is a Danish company, manufacturer, seller, installer, and servicer of wind turbines that has installed 132 gigawatts of wind turbine capacity in 83 countries. The company stands out among its competitors. Infrastructure and green energy could provide uncorrelated opportunities as renewable energy strategies have been particularly resilient to the impact of the pandemic. Green energy solutions will continue to grow.
The Future Is Bright For Top Renewable Energy Stocks
Renewable energy companies that generate free cash flow and have strong balance sheets have a significant advantage over financially weaker rivals. They have greater access to the capital needed for financial growth. Therefore, investors should focus their attention on financially strong clean energy companies.
The undeniable growth potential of the renewable energy sector provides the opportunity for any company focused on the industry to thrive. Currently, the clean energy sector represents a massive opportunity for investors. However, you must pick stocks carefully, since not all will capture the full extent of this opportunity.
When considering an investment, look for a strong balance sheet and a solar energy-focused growth profile. These key factors could give a company the power to generate higher returns.