At the end of 2022, global wind power generation accounted for roughly 7.33% of electricity production. However, the currency expansion rates still fall critically short of putting major nations on track to meet 2050 net-zero emissions goals. Recognizing the gap, the International Energy Agency has urged doubling the rate of wind power growth in coming years. This situation creates an opportunity to buy wind stocks at discounted prices before faster industry growth kicks in.
Below, I’ve highlighted three wind stocks to buy. All three come with buy ratings (or better) from analysts and are poised to ride the accelerating shift to renewable wind energy. Let’s get started.
General Electric Company (GE)
General Electric Company (NYSE:GE) has been around for over 130 years. Headquartered in Boston, this American multinational conglomerate manufactures jet engines, wind turbines, and medical machines for various industries.
GE’s most recent report indicates orders are up 18% year-over-year, hitting $17.9 billion. Meanwhile, adjusted revenue is $16.5 billion, up 18% from last year. Additionally, the stock’s EPS reached $0.82, exceeding estimates by 46.43%.
General Electric announced in 2021 that it would split the company between aviation, healthcare, and energy. Looking ahead to 2024, the company’s energy segment, GE Vernova, will spin off from the parent company in Q2, listed as GEV on the New York Stock Exchange. This precedent was set by GE HealthCare Technologies Inc. (NASDAQ:GEHC) which split off earlier this year and trades well above its IPO.
Analysts are bullish on GE, setting a high target of $150 and issuing GE a strong buy rating.
NextEra Energy, Inc. (NEE)
NextEra Energy, Inc. (NYSE:NEE) has become one of the world’s largest electric utility companies with over 58 gigawatts of power generation capacity. The company’s largest subsidiary is Florida Power & Light (FLP) which provides electricity to about 5.8 million customer accounts. However, most of NextEra’s rise is fueled by its fast-growing renewable energy business, NextEra Energy Resources (NEER) which focuses on global wind and solar power production.
NextEra also reported a solid third quarter. Impressively, NEE’s diverse portfolio generated over $20 billion in annual revenue last year. Total revenue was $7.17 billion with an EPS of $0.94, exceeding estimates by 9.3%. NEER had a remarkable 21% adjusted earnings surge, fueled by renewable energy investments. Adding 3,245 megawatts of renewable and storage to the backlog further emphasizes NEE’s commitment to sustainable energy.
With its 10.6% year-to-date adjusted EPS growth, a 3.19% dividend yield, and an estimated 64% upside potential based on analyst’s prediction of a $96 high, NEE could be an ideal investment. It’s no wonder analysts have been rating the company as a strong buy.
TPI Composite (TPIC)
TPI Composites (NASDAQ:TPIC) is a speculative pick for this list, since the company has manufactured turbine wind blades out of specialty materials since 2001. Headquartered in Scottsdale, Arizona, TPI operates factories globally and supplies over 38% of the international onshore wind market outside China. TPI predicts their wind blade production from 2018 to 2022 could reduce 1.7 billion metric tons of CO2 emissions globally.
In its Q3 report, the company reported a 3% decline in net sales to $373 million. This included a net loss of $72.8 million. Luckily, the loss was influenced by one-off events, including the Proterra bankruptcy and incremental warranty expenses. Their adjusted EBITDA shows the temporary setback, recording a loss of $27.4 million compared to the $5.1 million profit this quarter last year.
Despite these challenges, TPI actively addressed concerns through working capital initiatives, including the sale of a facility in China. These efforts have resulted in an unrestricted cash balance of $161 million.
Since the stock has taken quite the beating this year, this might be a good time to add TPIC to your portfolio. As I said, the loss was largely caused by the one-offs and seem to be in the past. And to be sure, analysts are still cautiously optimistic about the stock, issuing TPI a buy rating with a projected high price target of $8. This is far above the current price of around $2.48 per share. However, if you’re going to buy in, it might be best to keep the positions small until we have at least a few good quarters in the rear-view mirror.
As of the date of publication, Rick Orford did not have any positions (either directly or indirectly) 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.
