Renewable energy has exploded in the last two decades or so as more people realise the damage being done by traditional electricity production means. The cost of solar, wind and energy storage has also come down and played a huge role in helping people switch to green energy. The green and renewable energy industry is expected to see continuing growth for the foreseeable future and if you are an investor looking for green stocks to invest in, there are lots of companies whose stock you could own.
Below, we will explore a few of these companies and look at some reasons why these companies’ stocks should be in your portfolio.
Canadian Solar is among the biggest manufacturers of inverters, solar panels and related equipment. The company also has several solar power production power plants around the world in addition to providing battery storage solutions to their customers. Because of the strong market position of the company, it is a strong favourite among investors.
The company’s revenues are expected to increase by over 70% in 2021 which makes it a very lucrative option. There is also strong contentment with the company’s valuation, with the company’s stock sitting at about $52 and expected to keep rising as the company’s revenue increases and its valuation is adjusted upwards.
A minor point for investors to note is that polysilicon prices are rising and this has caused the company to increase its price upwards. This has led to some instability in its stock price in the past year or so, but seasoned investors see this as a good thing because if the company can increase revenue through its price hikes, then its valuation will rise and its stock price will increase.
The company is also expected to have a lot of free cash towards the end of 2021 as it realigns its capital expenditure, meets its financial obligations and pays out the dividends on the stocks its investors hold.
Clearway Energy says that its mission is to make it easy for everyone – individuals and businesses alike – to have access to green energy. The company has over 25 renewable energy projects in the United States, with its power generating assets including solar and wind power generation. The company also provides power storage solutions to its customers.
The reason the company is in such a strong position is its community solar farm model. Through this model, the business provides power to small businesses, individuals and commercial customers through a subscription. These customers then get energy credits that they use to lower their power and other utility bills. The idea is that the communities where these solar farms are built get to own part of the farms instead of installing the solar panels themselves.
The company has already built over 100 of these community farms and it says that more farms are coming soon. In areas where its clients need something more robust, Clearway Energy also installs solar panels in car parks, roofs and carports to meet the energy needs of its clients which include Whole Foods and Arizona State University.
This company will continue to see growth as more people see the need for solar and as more people switch to it. Clearway Energy pays a dividend of 4.9%. Because this stock does 1.4% better than investing in the S&P, the consensus among experts is to buy.
Algonquin power is a huge power generating and distribution company operating two subsidiaries; Liberty Power and Liberty Utilities. Liberty power owns a stake in about 35 green energy power stations which include wind, hydroelectric and solar production stations. Once these stations produce the power, it is distributed through Liberty utilities to their customers. Liberty utilities is also involved in gas and water distributions as well as wastewater treatment.
One of the reasons why this is one of the best green stocks to consider is because the company has distributed dividends diligently for the past nine years. Additionally, the dividends have grown by over 60% in the last five years, making them one of the fastest growing stock dividends in the market.
The company has also experienced a compounded annual growth rate over the past nine years, with its growth rate hitting 21% at its highest in that time. This cannot be attributed to a spike caused by the global pandemic because the company’s valuation has been increasing for about 11 years now.
The company is a strong contender not only because of its strong dividend stocks but also because it has over 267,000 electrical customers as well as about 370,000 gas connection customers.
This company has seen such growth because it can control all parts of its business, which is mainly seen in its power generating business where it provides end-to-end customer service. Investors can purchase Algonquin Power and other green dividend stocks through WealthSimple. WealthSimple has a commission-free trading platform that allows you to trade and invest in stocks so you don’t have to pay exorbitant fees and commissions. They also have an automated investment service, WealthSimple Invest, and a cryptocurrency investment tool, WealthSimple Crypto, in their suite of tools created with investors in mind to help them make and grow their money. They also have a suite of financial advisors standing by to provide investment advice and guidance.
Brookfield Renewable Partners
Brookfield Renewable Partners is an absolute powerhouse in the green energy space, currently owning over 5300 power generating plants. Its main focus is hydro energy, with its facilities located all over the globe and the company being worth more than US$52billion.
The company has a healthy mix of hydro and other renewable energy production means meaning that the company offers a lot of security to investors. The company’s dividend payments might not be as high as others on this list, but the company’s compounded annual growth rate tells you a lot about why its stock is worth it. The company is growing at a rate of over 22.5% year-on-year even when dividend payouts are factored in. The stock’s attractiveness is further compounded by the fact that the company has a healthy balance sheet and the company has been growing for years.
The one reason to be wary about its stock is that the company tends to lower its payouts when its revenue falls. This is not a great look, but the good thing is that it increases its dividends on revenue growth so that investors are in the positive in the long term.
Atlantica Sustainable Infrastructure
Atlantica Sustainable Infrastructure has put a lot of its revenue in renewable energy. It owns solar generating facilities and farms all over the world. Even if the company is located in the United Kingdom, it still has renewable interests and assets in North and South America as well as parts of the Middle East and Asia.
One of the advantages that this company has over the other companies above is that most of its revenue is tied to long-term contracts. These contracts average 16 years which means the company will continue seeing a stable cash flow for the foreseeable future. All of their projects, both completed and uncompleted, are fully financed so investors do not have to worry about the company taking money out of its reserves to fund these investments or seek additional external funding.
The company has strong cash funds available for distribution outlook, it is making steady investments, and the business is highly visible, all of which will help the company keep growing and make its stocks some of the best green stocks to buy according to experts.
If you missed out on investing in Tesla, you have another opportunity to invest in electric vehicles through Nio. Nio is a Chinese company producing electric vehicles that rival Tesla’s. The company has stated that it seeks to bring its solid-state battery to the market in 2023. With the advertised 620-mile range, these batteries will have a longer range than Tesla’s and this is something all investors should be excited about.
The company has also announced that it is looking to get into Europe through Norway and if it can have a foothold in Europe, then it might become Tesla’s competitor or replacement in the region. With the demand for Neo’s cars expected to continue increasing, investors should keep an eye out for any weaknesses in the stock as these will present a very lucrative investment opportunity.
Another thing that the company has going for it is that there are so many car companies in Europe that are struggling to get a slice of the electric vehicle market share. If Nio is able to dominate, as it is poised to do, then these small car manufacturers will get out of the market which will lead to an insane valuation of Nio. The consensus is to buy Nio’s stock and to do so right now.
If you are looking to invest in green stocks, you have the option of choosing between green electric generating companies or green electric vehicle manufacturers. Whatever you choose, there are lots of options that will fit in your portfolio and give you returns for years to come.