In this article, we will be looking at the 15 best clean energy stocks to invest in. You can skip our detailed analysis of the energy industry and its future outlook by clicking to see the 5 Best Clean Energy Stocks to Invest In.
Clean energy refers to any energy generated from renewable sources that have zero emissions to limit pollution in the environment when used. It can also be energy saved by the implementation of energy efficiency measures for later use. Evidently, solar, wind, hydroelectric, and other such types of energy are considered clean, green, or alternative energy forms.
Nowadays, there is a much greater focus on the use of clean energy over traditional non-renewable energy. This had led to the start of what can be considered a clean energy revolution in the US, China, Europe, and in several countries in the developing world. This revolution is followed by the steady growth of the renewable energy sector. A report by Facts and Factors claimed that the market size for this sector was valued at about $1.089 billion in 2019 and will grow to approximately $1.911 billion by 2026, growing at a CAGR of 8.3% during the forecast period. This is a testament to the above claim that the clean energy sector is expected to continue to become larger and more profitable.
This growth can primarily be attributed to the attitude of governments across the globe towards the adoption of clean energy measures. With increasing global pressure to care for the environment in light of climate change concerns and international agreements such as the Paris Agreement from 2016, global actors like the US have tripled their clean energy deals between 2015 to 2020, as per the American Cities Climate Challenge. New, environmentally-friendly trends are developing in various industries as well, with the automobile sector focusing on electric vehicles (EVs). According to the International Energy Agency, by mid-2020, about 17 countries had managed to set 100% zero-emission vehicle targets for themselves, to be achieved by 2050.
According to a Fortune Business Insights report, the global EV market size was estimated to rise to $985.72 billion by 2027, growing at a CAGR of 17.4%. Companies such as Tesla, Inc. (NASDAQ: TSLA) and Ford Motor Company (NYSE: F) are taking over the EV stage as around 10 automobile manufacturers around the world were reported to have invested $200 billion into the manufacture of EVs, according to a KPMG report published this year. The International Energy Agency’s technology report from June 2020 also mentioned that EV sales crossed the 2.1 million mark in 2019, surpassing the record of 2018 and bringing the total EV stock to 7.2 million cars. These vehicles accounted for about 2.6% of global car sales in 2019. According to Cox Automotive, by the first quarter of this year, EV sales rose by 81%.
The focus on clean energy and the resulting profitability of the sector has made it a lucrative investment option for today’s investors. The Wall Street Journal has reported that in the first quarter of 2021, investment funds with even a partial environmental mandate had assets reaching a total of $2 trillion. Moreover, two of the biggest banks in the US also pledged about $4 trillion for climate-oriented financing in the upcoming decade. Green finance is slowly beginning to take over the world, a reality that is unsurprising, as governments, companies, and individuals all over the world are attempting to take environmentally-friendly steps in every direction, as mentioned above.
Just like the energy markets, the hedge fund industry is also going through massive changes. 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.
In light of this, stocks like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE) are steadily gaining headway leading the path into the renewable energy sector. We have thus compiled a list of the best clean energy stocks to invest in. We took into account hedge fund sentiment (based on our data of 800+ hedge funds), analysts’ ratings, fundamentals and future growth potential while choosing these stocks.
Photo by Jason Blackeye on Unsplash
Best Clean Energy Stocks to Invest In
15. ReneSola Ltd (NYSE: SOL)
Number of Hedge Fund Holders: 3
ReneSola Ltd (NYSE: SOL) is a solar power-focused renewable energy company. It has three segments: Solar Power Project Development, EPC services, and Electricity Generation Revenue. The company also develops community solar gardens and ranks 15th on our list of the best clean energy stocks to invest in.
This May, it was reported that ReneSola Ltd (NYSE: SOL) raised its revenue substantially in the first quarter because of various projects in Hungary and Utah. The adjusted income for Q1 rose to $3 million, coming in better than the net loss of $2 million last year. In the first quarter of 2021, ReneSola Ltd (NYSE: SOL) had an EPS of $0.05, beating estimates by $0.07. Its revenue came in at $22.77 million, representing a 7.62% growth year over year and beating estimates by $2.77 million.
By the end of the first quarter of 2021, 3 hedge funds out of the 866 tracked by Insider Monkey held stakes in ReneSola Ltd (NYSE: SOL). The total value of their stakes was roughly $146 million. This is compared to the previous quarter’s 3 hedge fund holders with a total stake value of approximately $138 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
14. Canadian Solar Inc. (NASDAQ: CSIQ)
Number of Hedge Fund Holders: 17
Canadian Solar Inc. (NASDAQ: CSIQ) is a renewable energy company focused on manufacturing solar ingots, wafers, cells, modules, and other solar power products. The company has two segments: Module and System Solutions, and Energy. It ranks 14th on our list of the best clean energy stocks to invest in.
On June 24th, Canadian Solar Inc. (NASDAQ: CSIQ) announced that it had acquired a $59.7 million facility with Banco Santander to support growth in the global energy business, while also commenting on plans for expansions of the company’s project development pipelines in Africa, Europe, and the Middle East. In the first quarter of 2021, Canadian Solar Inc. (NASDAQ: CSIQ) had an EPS of $0.36, missing estimates by $0.03, and revenue of $1.09 billion. The latter represented a 31.94% growth year over year and beat estimates by $49.14 million. The stock has gained 102.14% in the past year as well.
By the end of the first quarter of 2021, 17 hedge funds out of the 866 tracked by Insider Monkey held stakes in Canadian Solar Inc. (NASDAQ: CSIQ). The total value of their stakes was roughly $96.4 million. This is compared to the previous quarter’s 14 hedge fund holders with a total stake value of approximately $118 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
13. SunPower Corporation (NASDAQ: SPWR)
Number of Hedge Fund Holders: 18
SunPower Corporation (NASDAQ: SPWR) is a solar power company operating globally to provide solar solutions. The company operates through its Residential, Light Commercial, Commercial and Industrial Solutions, and Others segments. It ranks 13th on our list of the best clean energy stocks to invest in.
On June 3rd, The CEO of SunPower Corporation (NASDAQ: SPWR) commented on the potential of the rooftop market of about 100 million US homes. He also commented on the solar business being “ripe” for digital innovation, which would help simplify things in buying solar and solar-related products. In the first quarter of 2021, SunPower Corporation’s (NASDAQ: SPWR) EPS was $0.05, beating estimates by $0.03, and its revenue came in at $305.78 million, missing estimates by $0.98 million. The stock has gained 5.59% in the past 6 months and 9.76% year to date.
By the end of the first quarter of 2021, 18 hedge funds out of the 866 tracked by Insider Monkey held stakes in SunPower Corporation (NASDAQ: SPWR). The total value of their stakes was roughly $182 million. This is compared to the previous quarter’s 24 hedge fund holders with a total stake value of approximately $345 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
12. Renewable Energy Group, Inc. (NASDAQ: REGI)
Number of Hedge Fund Holders: 21
Renewable Energy Group, Inc. (NASDAQ: REGI) is a renewable energy company providing lower-carbon transportation fuels in the US and internationally. It converts natural fats, oils, and greases into advanced biofuels for sale and operated through its biomass-based Diesel, Services, and Corporate and Other segments. The company ranks 12th on our list of the best clean energy stocks to invest in.
On June 9th, Renewable Energy Group, Inc. (NASDAQ: REGI) began gaining more than it had in the past 3 months because of a rating upgrade. Citigroup began covering the stock and gave it a Buy rating alongside a $90 price target, resulting in its popularity. In the first quarter of 2021, Renewable Energy Group, Inc. (NASDAQ: REGI) had an EPS of $0.88, beating estimates by $0.72. Its revenue of $539.74 million represented a rise of 13.71% year over year and beat estimates by $0.30 million. The stock has gained 179.34% in the past year.
By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Renewable Energy Group, Inc. (NASDAQ: REGI). The total value of their stakes was roughly $163 million. This is compared to the previous quarter’s 16 hedge fund holders with a total stake value of approximately $66.8 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
11. Brookfield Renewable Partners L.P. (NYSE: BEP)
Number of Hedge Fund Holders: 24
Brookfield Renewable Partners L.P. (NYSE: BEP) owns a portfolio of renewable power generating facilities in North America, Colombia, Brazil, Europe, India, and China. Brookfield Renewable Partners L.P. (NYSE: BEP) primarily makes use of hydroelectric, wind, solar, and biomass sources to generate electricity. The company ranks 11th on our list of the best clean energy stocks to invest in.
This June, Credit Suisse bumped Brookfield Renewable Partners L.P. (NYSE: BEP) to an Outperform with a $45 price target, with analyst Andrew Kuske commenting that the stock is well-positioned in the energy industry. On April 16th, Brookfield Renewable Partners L.P. (NYSE: BEP) brought in $683.6 million by selling its onshore wind unit in Ireland and the UK. This May, the company also declared its dividend of $0.3038 per share with a forward yield of 3.24%, payable on June 30th. In the first quarter of 2021, the EPS for Brookfield Renewable Partners L.P. (NYSE: BEP) was -$0.24, while its revenue came in at $1.02 billion, representing a 28.79% increase year over year and beating estimates by $92.07 million. The stock has gained 43.4% in the past year.
By the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in Brookfield Renewable Partners L.P. (NYSE: BEP). The total value of their stakes was roughly $223 million. This is compared to the previous quarter’s 20 hedge fund holders with a total stake value of approximately $277 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
ClearBridge Investments, an investment management firm, mentioned Brookfield Renewable Partners L.P. (NYSE: BEP) in its first-quarter 2021 investor letter. Here’s what they said:
“U.S. renewables utility Brookfield Renewable was another detractor. Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada and domiciled in the U.S., focused on international hydro, solar, wind and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi-technology renewables business makes it an attractive partner. Its development pipeline stands at 18,000 megawatts, providing confidence the company can meet its targeted double-digit cash flow growth through to 2025. Shares moderated amid expectations of rising bond yields, and a cool-off on the green trade.”
10. First Solar, Inc. (NASDAQ: FSLR)
Number of Hedge Fund Holders: 24
First Solar, Inc. (NASDAQ: FSLR) is a renewable energy company focusing on solar power. It provides photovoltaic solar energy solutions in the US, Japan, France, Canada, India, Australia, and internationally. First Solar, Inc. (NASDAQ: FSLR) operates through its Modules and Systems segments and ranks 10th on our list of the best clean energy stocks to invest in.
On June 10th, Citi analysts raised their EBITDA estimate for First Solar, Inc. (NASDAQ: FSLR) to $625 million from the previous $555 million figure, in light of the company’s increased module production. The firm also reiterated its Buy rating for the stock alongside the $100 price target put on it. Bank of America also upgraded First Solar, Inc. (NASDAQ: FSLR) to Buy this May, with a $91 price target because of the company’s positive earnings in the first quarter. According to the Wall Street Journal, the company itself also announced on June 9th that it would be spending about $680 million to build a new solar panel factory in Ohio. The factory is expected to produce 3 GW of power in a year or enough energy to power 570,000 homes.
By the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in First Solar, Inc. (NASDAQ: FSLR). The total value of their stakes was roughly $304 million. This is compared to the previous quarter’s 34 hedge fund holders with a total stake value of approximately $406 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
White Brook Capital, an investment management firm, mentioned First Solar, Inc. (NASDAQ: FSLR) in their first quarter 2021 investor letter. Here’s what they said:
“First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”
9. Clearway Energy, Inc. (NYSE: CWEN)
Number of Hedge Fund Holders: 24
Clearway Energy, Inc. (NYSE: CWEN) is a renewable energy company operating in the US. By March 2021, the company had about 4,200 net MW of installed wind and solar generation projects alongside 2,500 new MW of natural gas generation facilities. The company ranks 9th on our list of the best clean energy stocks to invest in.
This May, Clearway Energy, Inc. (NYSE: CWEN) announced its quarterly dividend of $0.329 per share, representing a 1.5% increase from its previous $0.324 dividend. The forward yield of the new dividend is 4.76%. In the first quarter of 2021, the EPS for Clearway Energy, Inc. (NYSE: CWEN) was $0.03, beating estimates by $0.4, while its revenue came in at $237 million. The stock has gained 15.46% in the past year.
By the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in Clearway Energy, Inc. (NYSE: CWEN). The total value of their stakes was roughly $232 million. This is compared to the previous quarter’s 22 hedge fund holders with a total stake value of approximately $ 286 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
8. Plug Power Inc. (NASDAQ: PLUG)
Number of Hedge Fund Holders: 25
Plug Power Inc. (NASDAQ: PLUG) provides hydrogen fuel cell turnkey solutions for the electric mobility and stationary power markets in the US and Europe. Plug Power Inc. (NASDAQ: PLUG) is focused on proton exchange membrane fuel cell and fuel processing technologies, alongside related hydrogen and green hydrogen generation infrastructure. The company ranks 8th on our list of the best clean energy stocks to invest in.
On June 30th, RBC initiated its coverage of Plug Power Inc. (NASDAQ: PLUG) with an Outperform rating and a $42 price target. Analyst Joseph Spak commented that the stock’s rich valuation is justifiable in light of the company’s growth potential. In the first quarter of 2021, Plug Power Inc. (NASDAQ: PLUG) had an EPS of -$0.12, while its revenue came in at $71.96 million, growing by 76.31% year over year and beating estimates by $5.34 million. The stock has gained 2.27% year to date and 347.61% in the past year.
By the end of the first quarter of 2021, 3 hedge funds out of the 866 tracked by Insider Monkey held stakes in Plug Power Inc. (NASDAQ: PLUG). The total value of their stakes was roughly $612 million. This is compared to the previous quarter’s 21 hedge fund holders with a total stake value of approximately $734 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
7. Sunnova Energy International Inc. (NYSE: NOVA)
Number of Hedge Fund Holders: 26
Sunnova Energy International Inc. (NYSE: NOVA) is a residential solar and energy storage service provider in the US. Sunnova Energy International Inc. (NYSE: NOVA) offers operations and maintenance, alongside monitoring, repairs, replacements, and equipment upgrades, among other services. Sunnova Energy International Inc. (NYSE: NOVA) ranks 7th on our list of the best clean energy stocks to invest in.
In the first quarter of 2021, Sunnova Energy International Inc. (NYSE: NOVA) had an EPS of -$0.27, and its revenue came in at $41.28 million. The stock has also gained 84.77% in the past year and has a market cap of $3.95 billion.
By the end of the first quarter of 2021, 26 hedge funds out of the 866 tracked by Insider Monkey held stakes in Sunnova Energy International Inc. (NYSE: NOVA). The total value of their stakes was roughly $327 million. This is compared to the previous quarter’s 32 hedge fund holders with a total stake value of approximately $684 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), this is a good clean energy stock to invest in.
6. SolarEdge Technologies, Inc. (NASDAQ: SEDG)
Number of Hedge Fund Holders: 32
SolarEdge Technologies, Inc. (NASDAQ: SEDG) is a developer of direct current optimized inverter systems for solar photovoltaic installations worldwide. SolarEdge Technologies, Inc. (NASDAQ: SEDG) offers power optimizers, communication devices, and smart energy management solutions for residential, commercial, and small utility-scale solar installations and inverters. It ranks 6th on our list of the best clean energy stocks to invest in.
This May, SolarEdge Technologies, Inc. (NASDAQ: SEDG) was upgraded to Buy from Neutral at Goldman Sachs with a $290 price target in light of the company’s solid fundamentals. Analyst Brian Lee has also commented that the stock’s selloff was “overdone.” In the first quarter of 2021, SolarEdge Technologies, Inc. (NASDAQ: SEDG) had an EPS of $0.98, and its revenue came in at $405.49 million, beating estimates by $9.92 million. According to the Wall Street Journal, the stock has Buy ratings from 13 analysts.
By the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey held stakes in SolarEdge Technologies, Inc. (NASDAQ: SEDG). The total value of their stakes was roughly $420 million. This is compared to the previous quarter’s 28 hedge fund holders with a total stake value of approximately $458 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), and NextEra Energy, Inc. (NYSE: NEE), SolarEdge Technologies, Inc. (NASDAQ: SEDG) is a good clean energy stock to invest in.
Richie Capital Group, an investment management firm, mentioned SolarEdge Technologies, Inc. (NASDAQ: SEDG) in their first-quarter 2021 investor letter. Here’s what they said:
“Our biggest detractors for the quarter included SolarEdge Technologies (SEDG – down 11.2%) – The Smart Energy solar company declined during the quarter along with most other solar energy stocks due to concerns over higher interest rates. Higher interest rates will make it more expensive for businesses and consumers to borrow money for residential and commercial solar projects. We expect interest rates to be somewhat of a headwind for years to come. However, the stronger underlying trends are in their favor. We expect SEDG to be a net winner from the Biden Administration’s infrastructure plan which focuses on Clean Energy.”
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Disclosure: None. 10 Best Clean Energy Stocks to Invest In is originally published on Insider Monkey.
