The 21st century is truly the time for battery stocks to shine!
The cheap battery stocks of today could provide the generational wealth of tomorrow. The world continues to increasingly rely upon them to meet climate needs. Everything is being electrified in the push to move away from hydrocarbons. As a result, we have a higher demand for batteries to store energy as well.
Battery stocks are growing in value every year as they continue to replace oil and coal. Some investors may look suspiciously at a stock that has risen over 1000% in a short time. Doesn’t that mean it’s clearly overbought?
Yet a rapidly growing company may indeed be undervalued if the market doesn’t appreciate its rapid and continued growth. And when improved technology and political will work together, decarbonization will continue to bring explosive growth. Some of the best cheap battery stocks are those that have already seen a massive run-up. But they’re still cheap because they have much further to run.
So with an eye toward the future, let’s examine these three battery stocks smart investors should buy now.
Enphase Energy (ENPH)
While Enphase Energy (NASDAQ:ENPH) is best known for its solar power micro-inverters, its batteries may help it achieve even higher highs.
With a wide variety of batteries for home storage, Enphase pairs solar power with battery backup quite efficiently. That makes them the clear choice for people reducing their carbon footprint. America and many of the world’s nations are struggling to achieve their climate goals. Subsidies and tax breaks have made solar power with batteries the perfect renewable energy for homeowners.
Although Enphase has already achieved explosive growth, its financial position makes it still a cheap battery stock. In Q2 2023 Enphase had revenue of $711 million, over a third more than its revenue of $530 million prior year. Likewise in Q2 2023, Enphase had net income of $157 million, over twice as much as its Q2 2022 net income of $78 million.
The bottom line? Enphase is growing by leaps and bounds every quarter. The world’s increasing focus on renewable energy to fight climate change means Enphase will have a growing business for years to come. And that makes them one of the best cheap battery stocks for smart investors.
Energizer (ENR)
Energizer (NYSE:ENR) is battery company famous for its “Energizer Bunny” advertising campaign. As a battery brand that has a strong mindshare in the public consciousness, they have the potential to grow earnings by smart cost cutting. Most known for personal batteries, ENR is a leader in car batteries and home-solar batteries.
In the news recently, Energizer caught political flack for its plan to close a Wisconsin factory and move production overseas. But such a move may be necessary to drive down production costs. Operating on thin margins and high volume, such cost savings will be needed to maintain future profits.
In terms of financial outlook, Energizer has been mostly stable. Their Q1 2023 earnings report showed net sales unchanged from a year earlier at $684 million. However, thanks to cost cutting, Q1 2023 net earnings grew to $40 million, up from prior year earnings of $19 million.
Energizer also offers a dividend, which at current prices sits at 3.24%, over twice the average of the S&P. So while revenue may not be growing, Energizer is exceptionally valuable for a dividend investor. The bottom line is that cost cutting, stability, and a good dividend make Energizer a wise second battery pick to buy.
NextEra Energy (NEE)
Let’s keep in mind that large battery infrastructure is also a need. Economies of scale mean large power providers are the best positioned to transition the world’s energy economy to renewables and batteries.
That’s where NextEra Energy (NYSE:NEE) comes in, having more energy storage than any other company in the U.S. At 2.67% according to current prices, the combination of good growth and a strong dividend makes NextEra a cheap battery stock for any investor. As continued growth is likely, NEE is planning to bring between 32,700 MW to 41,800 MW of renewable and storage capacity online between 2023 and 2026.
Financially, NextEra’s growth seems assured, as does the safety of its dividend. NextEra’s Q2 2023 earnings report showed operating revenue of $7.3 billion. That figure is over 40% greater than its Q2 2022 operating revenue of $5.2 billion. NextEra also reported Q2 2023 net income of $2.6 billion, over twice as much as prior year net income of $1.1 billion. Growing by leaps and bounds, this large-scale renewables plus storage battery makes it the third choice in my picks.
On the date of publication, John Blankenhorn did not hold (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.
