Energy stocks have been many investors’ favorites for a long time. The energy sector has various smaller industries and companies, such as oil, natural gas, coal, alternative energy, and many more. However, as our society grows more conscious of climate change and its devastating effects on our environment and nature, consumers and the government have been pushing more for clean energy sources.
For this reason, renewable energy has been one of the fastest-growing sectors in the past decades. The federal energy subsidies and incentives for renewable energy companies have more than doubled from $7.4 billion in 2016 to $15.6 billion in 2022. At $1.21 trillion in global market size in 2023, the industry is expected to grow at a compound annual growth rate (CAGR) of 17.2% between 2024 and 2030. Below are the three clean energy stocks investors should consider buying before the November surge.
Sunrun (RUN)
Sunrun (NASDAQ:RUN) is an American photovoltaic cell and systems producer based in San Francisco. This company specializes in battery energy storage products and is pioneering the growing solar industry.
One of the main challenges Sunrun faced since 2022 was macroeconomic conditions. Under rising interest rates, the American PV producer struggled to finance major solar projects while post-pandemic high inflation rates initially challenged Sunrun with pricing pressure. While a large comeback might be unattainable shortly, as interest rates start to go down to normal, Sunrun will be able to finance larger solar projects to help the company grow again.
While the renewable energy company is yet to be profitable, the most recent financial reports indicate that the finances are improving. For the first quarter of 2024, analysts anticipated earnings per share at a loss of 46 cents, but in reality, the company only recorded a 40-cent EPS loss. Although its financials are still far from ideal, the improving financials and revenue showcase a possibility of comeback.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is a New York-based hydrogen fuel company that specializes in developing hydrogen fuel-cell solutions that replace conventional batteries powered by electricity. While the stock price has almost halved since the beginning of the year, investors should be optimistic about Plug Power, especially considering its long-run growth potential.
The hydrogen fuel giant recently received $1.66 billion in conditional loan guarantees from the Department of Energy. According to the company and the government agency, the money will be used primarily to develop six green hydrogen pipelines. These newly created pipelines will supply numerous large corporations, which are the majority of Plug Power’s customers, with environmentally friendly hydrogen energy. This conditional loan guarantee partnership with the government agency will contribute to greater decarbonization in the U.S. and help Plug Power increase its competitiveness in the emerging market.
Linde (LIN)
Linde (NASDAQ:LIN) is the largest industrial gas company in the world. Based in Ireland, this industrial gas giant has been aggressively expanding into the hydrogen sector in attempts to capitalize in the growing renewable energy sector.
Linde’s strength comes from its diversified business model. Unlike most energy companies, instead of relying on a single energy source and taking a huge risk, Linde’s approach is investing in multiple energy sources to have a stable and steady income source.
Furthermore, analysts seem to be bullish about Linde’s stock. Nine out of 14 analysts have a buy rating for Linde while no analysts gave the company a sell rating. The average price target shows over 10% upside potential for the stock. As the hydrogen energy sector continues to expand, Linde will capitalize on the growth opportunity.
On the date of publication, Andy Kim 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.
