As the global economy shifts towards a more sustainable future, clean energy stocks are attracting increasing investor interest. These companies develop and deploy that harness renewable sources like solar, wind, energy storage, and hydropower.
Investing in clean energy offers the potential for life changing returns, even amidst the market skepticism. However, navigating the clean energy sector can be complex. Decarbonization efforts are in need of regulatory support and there are often geopolitical risks and supply chain disruptions that can impact growth. If you’re able to think long term and look far out into the future, clean energy stocks provide a unique opportunity for building wealth.
Now, let’s discover the three best clean energy stocks to buy now!
First Solar (FSLR)
First Solar (NASDAQ:FSLR) is an American solar panel manufacturer headquartered in Tempe, Arizona. The company just recently closed off a strong 2023 fiscal year, and management remains optimistic about revenue and earnings growth in 2024.
First Solar stands out among its competitors and this theory held true in the past year. The solar panel market and clean energy sector as a whole has suffered a major slump in demand. Higher interest rates heavily affected the frequency of construction projects, and many other solar companies like Enphase battled with declining revenue and earnings. However, this did not hold true for First Solar and the company expects to build on momentum this year.
In FY23, revenue increased 27% YOY to $3.3 billion. Net income came in at $830 million, or $7.74 per share. Management has continued to scale manufacturing capacity as well as invest in R&D to evolve their product roadmap. This includes the commitment of $1.1 billion for their new manufacturing facility in the United States. They have forecasted net sales of approximately $4.5 billion, with EPS in the $13.00 – $14.00 range.
Linde (LIN)
Linde (NASDAQ:LIN) presents a compelling opportunity for investors seeking exposure to the rapidly growing clean energy sector. The company’s profitability has been surging, and they present a unique opportunity to capitalize on the growing hydrogen market.
Linde supplies essential gasses to a wide range of industries from healthcare to manufacturing. The product portfolio includes more than 100 gasses and mixtures, and they’re a primary supplier of hydrogen, oxygen, nitrogen, and argon. This stability and diversification allows them to weather market fluctuations and supply chain headwinds, while capitalizing on the opportunities in the marketplace. Furthermore, the company has committed $1.8 billion to provide clean hydrogen to new and existing customers in the Gulf Coast.
The company also has a history of increasing its dividend, demonstrating its commitment to rewarding shareholders. Linde has continued to make strategic investments into clean energy, and plans to invest between $7-$9 billion by 2026. While the hydrogen market will be a major tailwind for growth, the company has the CAPEX for emerging technologies like carbon capture. While the valuation may appear high, Linde’s consistent performance and long term growth prospects make it stand out among its competition.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) should not be ignored when considering the best clean energy stocks with the potential to triple. The diversified energy company has a multi-decade track record of building and operating diversified clean energy assets.
Over the past decade, NextEra Energy has delivered a more than 10% CAGR in its adjusted EPS. The company boasts a significant renewable energy portfolio, which management is expanding on in the 2024 fiscal year. This includes adding 3,245 megawatts of additional solar and energy storage capacity. However, the true appeal lies in NextEra’s dividend growth trajectory.
Unlike many other utility and energy companies that offer a slightly higher dividend yield but stagnant growth, NextEra offers both. They have managed to grow their dividend at a 10% CAGR over the last decade. This growth trajectory is not anticipated to slow down anytime soon, as management forecasts 10% dividend growth in FY24. With a healthy dividend yield and promising growth prospects, NextEra is an incticing option for income-oriented investors.
On the date of publication, Terel Miles 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.
