In this article, we will take a look at the 10 best alternative energy stocks to buy now. You can skip our comprehensive analysis of these companies, and go directly to the 5 Best Alternative Energy Stocks to Buy Now.
The global alternative energy industry has steadily gained traction, with more people attempting to implement renewable energy methods of producing, selling, and using energy. The global community is becoming less prone to accepting the uninhibited use of non-renewable energy sources such as coal or oil.
Alternative energy uses sustainable materials and processes to produce environmentally friendly and sustainable energy to be used and reused in the long run. The use of alternative energy sources is becoming more commonplace, with demand for alternative energy having risen in recent years, and foreseeably continuing to rise in the future. According to a study, the renewable energy market was worth $1046.6 million in 2019 and will generate almost $1594.7 million in revenue by 2026. The expected CAGR between 2020 and 2026 according to this report is 6.2%.
In this environment, alternative and renewable energy companies like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH) are getting a lot of attention from investors.
The growing popularity and demand for alternative energy sources have been attributed to the harmful greenhouse gases (GHGs) emitted from the use of non-renewable energy sources, primarily fossil fuels like coal and oil. Owing to the adverse impact GHGs have on the environment and the fact that non-renewable energy sources are limited and rapidly depleting, the global community is beginning to swiftly shift to the use of these alternative energy sources for the better. A good example to show how alternative energy sources are seeping into everyday life is the emergence of the electric vehicle (EV), manufactured by companies like Tesla, Inc. (NASDAQ: TSLA) and Workhorse Group Inc. (NASDAQ: WKHS). For instance, the Model S Plaid manufactured by Tesla, Inc. (NASDAQ: TSLA) and the C Series vehicles manufactured by Workhorse Group Inc. (NASDAQ: WKHS) are two examples of EVs that are taking over the automobile industry while presenting an alternative to harmful car fuel used in ordinary vehicles. A report compiled by BlueWeave Consulting stated that the market for EVs globally would grow from $121.8 billion in 2020 to $236.3 billion by 2021. This would represent a CAGR of 10.6%. According to the International Energy Agency, the number of EVs expected to be on the roads by 2030 is 145 million.
Apart from Tesla, Inc. (NASDAQ: TSLA) and Workhorse Group Inc. (NASDAQ: WKHS), numerous companies exist worldwide with an ever-growing focus on alternative energy sources, and the future seems bright for this industry.
The stocks listed in this article have been selected on the basis of their popularity among hedge funds based on the data of over 800 funds tracked by Insider Monkey. We also took into account the fundamentals, growth catalysts, analysts’ ratings and growth potential of these stocks.
Like the energy markets, the hedge fund industry is also going through drastic changes. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, let’s now take a look at the 10 best alternative energy stocks to buy now.
Best Alternative Energy Stocks to Buy Now
10. Avangrid, Inc. (NYSE: AGR)
Number of Hedge Fund Holders: 15
Forward P/E Ratio: 2.32
Avangrid, Inc. (NYSE: AGR) is an energy services holding company based in the US and operates through two segments called Networks and Renewables. The company generates renewable energy using onshore wind power alongside solar, biomass, and thermal power. It ranks 10th on our list of the best alternative energy stocks to buy now.
In May, Avangrid, Inc. (NYSE: AGR) disclosed plans to sell $4 billion worth of shares to Qatar Investment Authority and majority shareholder Iberdrola at the rate of $51.4 a share. Of these two players, the former was to buy $740 million worth of shares, while the latter was to purchase $3.26 billion worth of shares. The company’s first quarter report also revealed that it beat both EPS and revenue estimates for the quarter with a non-GAAP EPS of $1.14 leaving a $0.40 margin, and a $1.97 billion revenue demonstrated a 10.1% growth year over year, beating the $160 million revenue estimate.
According to the first quarter report, Avangrid, Inc. (NYSE: AGR) also had $334 million in earnings. The stock also gained 22.91% in the past 6 months and 21.76% year to date. As of the end of the first quarter of 2021, 15 hedge funds held stakes in Avangrid, Inc. (NYSE: AGR) worth over $58 million, up from the 10 hedge funds holding stakes in the company in Q4’20.
Like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH), Avangrid, Inc. (NYSE: AGR) is one of the best renewable energy stocks to buy.
9. NRG Energy, Inc. (NYSE: NRG)
Number of Hedge Fund Holders: 35
Forward P/E Ratio: 7.29
NRG Energy, Inc. (NYSE: NRG) is a US integrated power company. The company produces and sells electricity in residential, industrial, and commercial areas. NRG Energy, Inc. (NYSE: NRG) utilizes solar and battery storage among other energy sources to generate electricity. The company ranks 9th on our list of the best alternative energy stocks to buy now.
NRG Energy, Inc. (NYSE: NRG) quadrupled its revenue in the first quarter when compared to Q4’20 revenues. In the first quarter, the company’s revenue stood at $8.09 billion.
In the first quarter of 2021, 35 hedge funds hold stakes in NRG Energy, Inc. (NYSE: NRG) worth $1.6 billion. This signifies an increase from the 31 hedge funds holding stakes in the company worth $1.46 billion in Q420. Like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH), NRG Energy, Inc. (NYSE: NRG) is one of the best renewable energy stocks to buy.
8. The AES Corporation (NYSE: AES)
Number of Hedge Fund Holders: 51
Forward P/E Ratio: 16.67
The AES Corporation (NYSE: AES) is a power generation and utility company, operating power plants providing energy to industrial, commercial, and residential areas. The AES Corporation (NYSE: AES) uses solar, hydroelectric, and wind energy sources among a range of others to generate the electricity it provides. This company ranks 8th on our list of the best alternative energy stocks to buy now.
The AES Corporation’s (NYSE: AES) first quarter of 2021 report revealed revenue of $2.63 billion, which signified a growth of 12.4% year over year and beat revenue estimates of $260 million. The company’s non-GAAP EPS stood at $0.28. This April, the company also announced a $0.15 quarterly dividend per share, making the forward yield stand at 2.13%.
The AES Corporation (NYSE: AES) gained 21.5% in the past 6 months and 11.36% year to date. As of the first quarter of 2021, 52 hedge funds held stakes in the stock worth $1.54 billion, up from the 38 hedge fund holders holding stakes worth $9 million in Q4’20, illustrating an increase in hedge fund popularity for the stock as well.
Like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH), The AES Corporation (NYSE: AES) is one of the best renewable energy stocks to buy.
7. Public Service Enterprise Group Incorporated (NYSE: PEG)
Number of Hedge Fund Holders: 24
Forward P/E Ratio: 17.84
Public Service Enterprise Group Incorporated (NYSE: PEG) is an energy company operating mainly in the Northeastern and Mid-Atlantic US. The company ranks 7th on our list of the best alternative energy stocks to buy now with a forward PE ratio of 17.84.
In the company’s first quarter report, Public Service Enterprise Group Incorporated (NYSE: PEG) Q1 EPS beat the estimates by $0.17. The company had a revenue of $2.89 billion, showcasing a 4% growth year over year. Public Service Enterprise Group Incorporated (NYSE: PEG) also announced a $0.51 dividend this April, bringing the forward yield up to 3.21%. The new dividend will be payable on June 30th. The company also reported earnings of $648 million.
Public Service Enterprise Group Incorporated (NYSE: PEG) gained 9.2% in the past 6 months and 10.57% year to date. As of the end of the first quarter of 2021, 24 hedge funds hold stakes in the company worth $287 million, down from 28 hedge funds holding stakes in the company in Q420 worth over $374 million.
Like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH), Public Service Enterprise Group Incorporated (NYSE: PEG) is one of the best renewable energy stocks to buy.
6. Evergy, Inc. (NYSE: EVRG)
Number of Hedge Fund Holders: 30
Forward P/E Ratio: 19.33
Evergy, Inc. (NYSE: EVRG) is an electricity generating company, selling electricity in Kansas and Missouri. A few of the alternative energy sources this company utilizes in electricity generation include hydroelectric, solar, wind, and other sources. Evergy, Inc. (NYSE: EVRG) provides services to around 1.6 million customers and ranks 6th on our list of the best alternative energy stocks to buy now.
In February, Evergy, Inc. (NYSE: EVRG) entered an agreement with Bluescape Energy Partners, Elliott Investment Management L.P., and others. The agreement brought in approximately $115 million from Bluescape Energy Partners, who would be purchasing newly issued Evergy, Inc. (NYSE: EVRG) common shares. Additionally, in their first quarter report, the company revealed that it beat both EPS and revenue estimates by $0.07 and $500 million respectively. Evergy, Inc.’s (NYSE: EVRG) non-GAAP EPS stands at $0.55. The company’s $1.61 billion revenue showcases a 43.8% growth year over year. Evergy, Inc. (NYSE: EVRG) also reported earnings of $191.6 million.
The stock gained 17.24% in the past 6 months and 18.68% year to date. As of the end of the first quarter of 2021, 30 hedge funds held stakes in Evergy, Inc. (NYSE: EVRG) worth $1.19 billion, compared to the Q4’20 numbers of 33 hedge fund holders.
Like Tesla, Inc. (NASDAQ: TSLA), First Solar, Inc. (NASDAQ: FSLR), JinkoSolar Holding Co., Ltd (NYSE: JKS), NextEra Energy Inc (NYSE: NEE), Canadian Solar Inc. (NASDAQ: CSIQ), Workhorse Group Inc. (NASDAQ: WKHS) and Enphase Energy Inc (NASDAQ: ENPH), Evergy, Inc. (NYSE: EVRG) is one of the best renewable energy stocks to buy.
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Disclosure: None. 10 Best Alternative Energy Stocks to Buy Now is originally published on Insider Monkey.
