No matter where you stand on clean energy or climate change, there's no question that the world is moving towards renewable energy solutions. The transition is inevitable for the simple reason that many of the world's most developed nations are throwing money at the sector.
The good news for investors is that, while some clean energy stocks have already seen tremendous growth, the sector is still just scratching the surface of what it will be in the future. Here are some statistics that illustrate the potential growth of this sector.
According to Beyond Market Insights, the global renewable energy market is forecast to grow at a compound annual growth rate (CAGR) of 22.5% between 2022 and 2030. That would put the total value of the market at approximately $1.1 trillion.
Allied Market Research projects an even bigger opportunity. The firm forecasts a global renewable energy market that is valued at $1.9 trillion by 2030.
That makes this a good time to accumulate shares in some attractively priced stocks. And that's the focus of this special presentation. We're looking at seven clean energy stocks that make great investments for a greener future.
Quick Links
- Brookfield Renewable Partners
- ChargePoint
- Plug Power
- Albemarle
- Enphase Energy
- General Electric
- Oneok
#1 - Brookfield Renewable Partners (NYSE:BEP)
Investing in Brookfield Renewable Partners LP (NYSE: BEP) is a way for investors to take an all-of-the-above approach to clean energy. The company is a pure-play subsidiary of Brookfield Asset Management Ltd. (NYSE: BAM) and has a portfolio that includes wind, hydroelectric, solar, and energy storage assets. That gives you exposure to a diverse range of clean energy products in one company.
In the company’s fourth-quarter earnings report, Brookfield Renewable announced it had invested or agreed to invest up to $12 billion in a variety of clean energy projects. This is a record amount that the company plans to deploy over the next five years. The company says that’s about half the growth target for that period.
BEP stock is down 19% in the last 12 months. But investors are still enjoying a 43% gain since March 2020 (the start of the Covid-19 pandemic). The company is expecting to average approximately 18% earnings growth over the next five years. Earnings growth is a solid predictor of share price growth. So that adds credibility to the consensus price target of the analysts tracked by MarketBeat. They give the stock a $39.78 price target, which is a 45% gain from the current level.
About Brookfield Renewable Partners
Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities primarily in North America, Colombia, and Brazil. The company generates electricity through hydroelectric, wind, solar, distributed generation, and pumped storage, as well as renewable natural gas, carbon capture and storage, recycling, cogeneration biomass, nuclear services, and power transformation.
Read More - Current Price
- $24.98
- Consensus Rating
- Buy
- Ratings Breakdown
- 7 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $31.78 (27.2% Upside)
#2 - ChargePoint (NYSE:CHPT)
You may be unsure about which electric vehicle stock (if any) to invest in. However, this is a sector you can’t afford not to invest in. At least on a national scale, one missing link is a charging infrastructure. That’s where ChargePoint, Inc. (NYSE: CHPT) comes in.
Investing in CHPT stock is also an indirect way to invest in the growth of EVs. The federal government is offering consumers tax rebates for buying EVs. And while the supply is limited now, many manufacturers will be significantly increasing their supply by 2025, and certainly by 2030.
And analyst research concludes that if the United States wants 100% passenger EV sales by 2035, then there will need to be approximately $40 billion dollars invested in publicly accessible charging infrastructure over the next 10 years.
To put that into context, ChargePoint produced less than $500 million in revenue in the trailing 12 months at this writing. And as the market share leader, it stands to get a significant chunk of that $40 billion even with other competitors in this space.
About ChargePoint
ChargePoint Holdings, Inc, together with its subsidiaries, provides electric vehicle (EV) charging networks and charging solutions in the North America and Europe. The company serves commercial, such as retail, workplace, hospitality, parking, recreation, municipal, education, and highway fast charge; fleet, which include delivery, take home, logistics, motor pool, transit, and shared mobility; and residential including single family homes and multi-family apartments and condominiums customers.
Read More - Current Price
- $1.10
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 11 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $2.47 (125.9% Upside)
#3 - Plug Power (NASDAQ:PLUG)
Another clean energy sector to keep an eye on is hydrogen. This leads to the next stock on this list, Plug Power Inc. (NASDAQ: PLUG). Investors may be familiar with the company’s hydrogen fuel cells that are used by companies such as Walmart Inc. (NYSE: WMT) and Amazon.com, Inc. (NASDAQ: AMZN). The company is also “the leading provider of comprehensive hydrogen fuel cell (HFC) turnkey solutions.” This allows
Plug Power provided investors with a business update on January 25, 2023. Analysts must have liked what they heard because five of them reiterated their buy ratings on PLUG stock. The company continues to generate revenue which has been increasing by double digits for the last several quarters.
That being said, Plug Power is not yet profitable, and the company’s earnings per share (EPS) are getting worse on a year-over-year (YOY) basis. But the long-term outlook for hydrogen remains bullish which is reflected in the PLUG stock price, which is up over 730% in the last five years.
About Plug Power
Plug Power Inc develops hydrogen and fuel cell product solutions in North America, Europe, Asia, and internationally. The company offers GenDrive, a hydrogen-fueled proton exchange membrane (PEM) fuel cell system that provides power to material handling electric vehicles; GenSure, a stationary fuel cell solution that offers modular PEM fuel cell power to support the backup and grid-support power requirements of the telecommunications, transportation, and utility sectors; ProGen, a fuel cell stack and engine technology used in mobility and stationary fuel cell systems, and as engines in electric delivery vans; GenFuel, a liquid hydrogen fueling delivery, generation, storage, and dispensing system; GenCare, an ongoing Internet of Things-based maintenance and on-site service program for GenDrive fuel cell systems, GenSure fuel cell systems, GenFuel hydrogen storage and dispensing products, and ProGen fuel cell engines; and GenKey, an integrated turn-key solution for transitioning to fuel cell power.
Read More - Current Price
- $1.92
- Consensus Rating
- Hold
- Ratings Breakdown
- 8 Buy Ratings, 11 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $4.52 (135.5% Upside)
#4 - Albemarle (NYSE:ALB)
Another way to invest in clean energy stocks is by investing in Albemarle Corporation (NYSE: ALB). The company is one of the leading lithium miners in the world. Lithium is a key component in the lithium-ion batteries that, for now, are standard in the EV sector.
Unlike some of the companies on this list, Albemarle is an established company with consistent revenue and, more importantly, growing earnings. That makes the stock the most expensive of the stocks on this list. But you know what they say about the difference between price and value. And ALB stock looks like a good value for investors.
The ability of the company to grow earnings is also good news for the company’s dividend. Although it’s been growing for 29 years, ALB’s dividend is below the industry average. But with the expectations for earnings to grow by an average of nearly 50% in the next five years, the company is likely to continue increasing its dividend.
About Albemarle
Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services.
Read More - Current Price
- $109.55
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 15 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $114.47 (4.5% Upside)
#5 - Enphase Energy (NASDAQ:ENPH)
Many analysts expect solar stocks to be a big winner as the Biden administration prioritizes clean energy technology in its budget. There are many solid options for investors. However, I think that Enphase Energy Inc. (NASDAQ: ENPH) has a story that’s worth studying.
Enphase doesn’t manufacture or install solar panels, but they impact the solar space in a significant way. The company’s IQ8 microinverters address a key limitation that solar panel owners face. That is, what happens at night or on cloudy days.
The answer comes from the microinverter that converts direct current (DC) power from solar panels to alternating current (AC) power. The microinverters also reduce the risk of a single-point failure. Enphase also offers a home solar battery storage solution and it’s even offering EV chargers.
Like many stocks in this sector, ENPH stock is down significantly from its 52-week high (which was also the all-time high). However, with the company just reporting strong revenue and earnings number, investors may be getting a nice second chance to generate significant profits from Enphase Energy.
About Enphase Energy
Enphase Energy, Inc, together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company offers semiconductor-based microinverter, which converts energy at the individual solar module level and combines with its proprietary networking and software technologies to provide energy monitoring and control.
Read More - Current Price
- $63.38
- Consensus Rating
- Hold
- Ratings Breakdown
- 14 Buy Ratings, 15 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $102.09 (61.1% Upside)
#6 - General Electric (NYSE:GE)
General Electric (NYSE: GE) is a name that’s familiar to many investors. But this is not your grandfather’s GE. The company is far from the conglomerate that Jack Welch built. In fact, the company just finished spinning off its Healthcare division into a separate company in January 2023.
Next will be a spin-off of its Aviation and Energy units in 2024. The Energy unit which will be named GE Vernova, is one of the leading names in wind turbines. The company manufactures its Haliade-X offshore wind turbine, which is netting significant business with an installed base of 7,000 gas turbines.
GE stock is currently trading near its 52-week high as well as near its all-time high. However, now is a good time to get into GE stock so that you can benefit when the stocks split off in 2024.
About General Electric
General Electric Company, doing business as GE Aerospace, designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. It also offers aftermarket services to support its products. The company operates in the United States, Europe, China, Asia, the Americas, the Middle East, and Africa.
Read More - Current Price
- $177.98
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $200.93 (12.9% Upside)
#7 - Oneok (NYSE:OKE)
The natural gas sector is expected to be one of the hottest clean energy sectors for several years. That makes a case for Oneok, Inc. (NYSE: OKE). Oneok is a midstream company that has assets that help gather, process, store, and transport natural gas liquids. The company connects natural gas liquid suppliers throughout the Northern Plains and Midwest. And the company is planning to expand its footprint to include operations in the Bakken region of the Northern Plans.
Russia’s invasion of Europe effectively cut off Europe from its key supplier of natural gas. The United States and other nations have been racing to increase output to meet this demand. This is clearly showing up in the revenue and earnings for Oneok, which have grown on a year-over-year basis in each of the last four quarters ending in November 2022. That trend is likely to continue as long as the need for natural gas remains strong.
About ONEOK
ONEOK, Inc engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude.
Read More - Current Price
- $113.16
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $100.38 (11.3% Downside)
The clean energy sector is diverse, and the opportunity is massive. Once again, it must be said that demand for renewable energy solutions is only going to increase. If you need any more evidence of this, look at the number of oil and gas companies that are making sure they aren't left out of this expensive game of musical chairs.
But if the thought of where to invest in clean energy is causing analysis paralysis, one option may be to look at an exchange-traded fund (ETF) focused on renewable energy. Some options include the iShares Global Clean Energy ETF (NYSEARCA: ICLN), the Invesco Wilderhill Clean Energy ETF (NYSEARCA: PBW), and the VanEck Low Carbon Energy ETF (NYSE: SMOG).
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