General Electric Company (GE): Does the Power of Wind Belong in Your Portfolio?

The company has gone back and forth between being in the red and in the black. For the most part it has been in the red. In the past five years 2011 was the only year in which Vestas was cash flow positive. Although to be fair, Gamesa has also not proven its ability to produce profits for an extended period of time either.

Vestas is the leading supplier of wind power in South Africa. The company has received three orders this year for its turbines to be built in the sub-Saharan nation. The most recent came on August 1, when the company won an order to supply 105 megawatts of turbines to a wind farm operated by Innowind, a subsidiary of Electricite de France.

Foolish final thoughts

At the present time, pure play wind power producers are struggling to turn a profit. Both Gamesa and Vestas have, however, produced profits in the past, albeit inconsistently. Investors with a need to turn a quick profit that don’t like surprises had best look elsewhere.

But for those investors with a long term horizon, who are willing to stomach some risk, wind power presents an opportunity that deserves consideration. The potential of the industry is undeniable. Countries are realizing that they need to produce power in a way that preserves the planet for our ancestors.

According to Gamesa’s 2012 report, worldwide installed turbine capacity was 282,430 megawatts. Cumulative capacity increased by nearly 20% in 2012 alone. Wind power does not appear to be just a passing fad.

For investors with low risk tolerance looking to diversify into wind energy, General Electric Company (NYSE:GE) is your best bet. It’s a solidly profitable enterprise that pays a 3.1% dividend. Those looking for a high risk, high reward scenario ought to take a look at Gamesa and Vestas. Those two companies are not consistent profit producers, but that all could change if the world continues installing wind turbines at the current rate.

The article Does the Power of Wind Belong in Your Portfolio? originally appeared on Fool.com is written by Ryan Palmer.

Fool blogger Ryan Palmer has no position in any of the stocks mentioned in this article. The Motley Fool owns shares of General Electric. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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