Renewable energy has become increasingly popular. Indeed, this sector is critical in tackling key issues such as climate change and energy independence. That said, while most renewable energy companies have positive catalysts and long-term prospects, their stocks are often undervalued due to unnecessary macro fears about the industry’s future. Nevertheless, this presents an incredible chance for investors to pick up undervalued renewable energy stocks at multi-year lows.
The recent upswing in clean energy stocks we’ve seen in the market reflects growing demand and awareness of geopolitical concerns. Russia’s confrontation with Ukraine points to the dangers of relying on regimes with politically-unstable administrations for core energy needs. Thus, a newfound understanding has brought in a surge of capital to green energy investments, providing a unique opportunity for investors to support a cleaner, more sustainable future.
|BEP||Brookfield Renewable Partners||$27.86|
JinkoSolar (NYSE:JKS) is an incredibly attractive investment opportunity. Not only is the company the largest solar panel maker in the world, but it is also perfectly-situated to gain substantially from the escalating public demand for renewable energy sources in multiple countries, such as China, the E.U., and the U.S. Accordingly, JinkoSolar is likely to experience substantial growth in value over time as our society continues its shift toward more sustainable practices.
JinkoSolar has been taking market share at an incredible rate, with consistent growth in its top- and bottom-line results. Currently, the company holds a 12.8% market share in the solar P.V. cell market, which is predicted to grow at a 13.6% CAGR until 2027. Jinko’s assets are growing significantly quicker than its liabilities, leaving the company with a massive cash position of over $2 billion. With its attractive price combined with a positive near-term outlook, JinkoSolar is a great option for investors looking to reap the rewards from the rapidly-growing solar sector.
General Electric (GE)
General Electric’s (NYSE:GE) renewables unit is leading the way with innovative technology like its Haliade-X offshore wind turbine. This highly sought-after turbine has propelled the company to great success.
Notably, this wind turbine has resulted in the GE winning a major contract for the Dogger Bank project off the coast of England. Construction is already underway, with 277 turbines on order from GE, and profits are soon follow. It’s an exciting time for all associated with this project, particularly General Electrics Renewables Department, which stands to benefit greatly from the Dogger Banks’ many successes.
General Electric’s prospects are looking brighter than ever, with the company’s Power and Aviation units set to experience considerable growth due to surging demand for electricity and travel. As more power plants are being built to meet the increasing need for electricity, GE’s Power unit can look forward to increased orders and revenue. Similarly, with more people wanting to travel after months of restrictions, GE’s Aviation unit will likely benefit due to pent-up demand. This upturn in both sectors will pay many dividends for investors down the road.
Ørsted (OTCMKTS:DNNGY) is a prime opportunity for the adventurous investor, providing an array of renewable energy projects with an international scope. As one of Denmark’s largest energy firms, Ørsted has established itself as a global leader in offshore wind power. This is a company that also doesn’t sit on its hands, continuously seeks growth opportunities. The company’s 3,000 MWs of onshore wind power across its U.S.-based farms is just the beginning of its vision under the ongoing shift to green energy.
The company owns roughly 22% of the world’s offshore wind generation capacity, and its portfolio contains some of the largest wind farms in Europe. Ørsted is expected to bring substantial amounts of capacity online in Vietnam, France, Japan, The U.S., and other countries in short order. Year-over-year revenue growth numbers have surged over 111%, with its 5-year average revenue growth of over 15% during the period. Additionally, its stock trades at 2.3-times trailing-twelve-month sales, 80% lower than its 5-year average.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is making tremendous contributions to the green energy revolution by focusing on the hydrogen revolution. Plug not only manufacturers fuel cells for warehouse vehicles like forklifts, but the company also builds plants that produce green hydrogen. Additionally, with its recent business development, Plug Power has become a major supplier of electrolyzers used to make green hydrogen. It is forming innovative partnerships, including with European car manufacturer Renault, to promote green transport further.
Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) are leading the charge in clean energy with their recent investments in green hydrogen from Plug. Moreover, the company also unveiled a deal to supply hydrogen truck maker Nikola with green hydrogen. Plug Power continues to attract high-profile customers, posting double-digit revenue growth in the past several quarters. Similarly, its order backlog increased by almost 45% sequentially in its third quarter.
Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners’ (NYSE:BEP) strong track record of margin growth and its impressive portfolio of renewable energy assets puts it in a prime position to take advantage of the rapidly-growing clean energy market. I think this will deliver impressive returns to investors over time.
Rising electricity prices have further insulated the company from rising commodity prices, solidifying its status as one of the top investments in this space. Notably, Brookfield generates the bulk of its revenues from 14-year contracts, which has helped maintain its lofty margins.
On average, the firm’s gross profit and EBITDA margins have grown over 60% in the past five years. On top of that, it boasts a remarkable dividend profile that’s growing consistently, while maintaining a payout ratio of roughly 60% to 70% of its funds from operations. The company’s dividend yield of over 4.7% should continue growing based on its profitability and liquidity positioning.
Atlantica Sustainable (AY)
Atlantica Sustainable (NASDAQ:AY) is on a mission to become one of the top names in sustainable energy. With an impressive 41 assets providing renewable energy, efficient natural gas, water projects, and transmission and transport solutions, Atlantica is leading responsible energy production worldwide. With operations spanning three continents, its global reach and commitment to renewable energy sources are second-to-none.
Atlantica Sustainable has been enjoying a very positive year. The company’s growth is remarkable, with 4,155 gigawatt hours (GWh) of renewable energy produced and 1,229 miles of transmission lines in operation. Operating cash flow is up by almost 17%, which is higher than expected. This impressive performance ensures that the company’s 6.6% yield is highly secure and sustainable over time. Investors have certainly taken note of these promising results, as well as Atlantica’s seven-year dividend growth streak.
Ormat Technologies (ORA)
Ormat Technologies (NYSE:ORA) supplies renewable geothermal energy technology. The company has built over 190 power plants and installed facilities with a combined output of over 3,200 megawatts (MW). Since the start of the year, ORA has gained 15%, outperforming other clean energy stocks.
Ormat Technologies is setting the bar high for other companies in the renewable energy sector. Indeed, not only have its shares increased 27% this year, but the company also forecasts that its geothermal and solar power can be expanded by 18% by the end of 2023. Such impressive future growth could make Ormat Technologies one of the leading names in U.S. renewable storage sectors.
Hopefully, these ambitious forward forecasts will materialize. Investors stand to benefit from the company’s growth profile and relatively impressive valuation at these levels. That’s because according to Fortune Business Insights, the global geothermal market “is projected to grow from $62.65 billion in 2022 to $95.82 billion by 2029.”
On the date of publication, Muslim Farooque 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.