10 Best Green Energy Penny Stocks to Buy Now

6. Montauk Renewables (NASDAQ:MNTK)  

Number of Hedge Fund Holders: 13  

Market Capitalization as of September 4: $646.25 Million  

Montauk Renewables (NASDAQ:MNTK) is a leader in the green energy sector and specializes in the conversion and delivery of green energy from waste sources. With over 30 years of experience, Montauk Renewables (NASDAQ:MNTK) has established itself as a pioneer in the landfill gas-to-energy industry, converting biogas from landfills into renewable natural gas (RNG) and electricity. The company has expanded its operations into the agricultural sector, focusing on anaerobic digestion (AD) technologies that convert waste from dairy and swine farms into RNG.

The demand for RNG is expected to rise and the regulatory environment is increasingly favorable for RNG producers. The California Low Carbon Fuel Standard (LCFS), alongside similar programs in states like Oregon, Washington, and New Mexico, provides incentives for low-carbon fuel production. Montauk Renewables’ (NASDAQ:MNTK) dairy and swine RNG projects have exceptionally low carbon intensity (CI) scores, with dairy RNG averaging -340 gCO2e/MJ and swine RNG at -347 gCO2e/MJ.

The U.S. Environmental Protection Agency (EPA) estimates that there are over 8,000 farms in the U.S. that could be viable candidates for biogas recovery systems, offering an energy potential of over 170 million MMBtu per year. Montauk Renewables (NASDAQ:MNTK) is well-positioned to capture a significant share of this market, particularly in dairy and swine farm RNG production as only a small fraction of existing farms currently produce RNG.

Over the next 5-10 years, Montauk Renewables (NASDAQ:MNTK) is expected to capture an increasing share of the RNG market, driven by its low-CI projects and favorable regulatory environment. The company’s focus on high-return projects further support its long-term growth prospects, with potential cash paybacks on capital investments ranging from 2-5 years.

Analysts expect the company’s earnings to grow by 58% this year and have a consensus on the stock’s Buy rating, setting an average share price target at $6.31, which represents an almost 35% upside potential from its current level. As of the second quarter, the stock is held by 13 hedge funds and the stakes amount to $15.87 million. Hosking Partners is the largest shareholder in the company with stocks worth $4.40 million as of June 30.