Stock price performance
Source: YCharts
The major operators, SunPower Corporation (NASDAQ:SPWR) and First Solar, Inc. (NASDAQ:FSLR) have exhibited a price appreciation of 314% and 189% in the last year. This significant price increase reflects that the investors are confident of the two companies’ potential to register future revenue growth and net margin growth as more and more residential and commercial sites continue to shift to installing solar panels for electricity supply.
As the global focus increasingly shifts to utilization of renewable energy, owing to the growing awareness of clean nature and its pros, among the masses regarding the solar utility providers, mainly SunPower Corporation (NASDAQ:SPWR) will see its revenues boost coupled with widening net margins.
Sempra Energy (NYSE:SRE) operates as an energy services company. The company’s gas and electric company segment is involved in the generation, transmission, and distribution electricity; and sale, distribution, and transportation of natural gas. On June 20, in response to growing national interest in the environmental and economic benefits of natural gas vehicles (NGVs), Southern California Gas (SoCalGas), American Gas Association (AGA) and other partners released five videos aimed at highlighting the advantages of natural gas as a source of clean, plentiful and reasonably priced American fuel.
Lately, Duke Energy Corp (NYSE:DUK) also concluded the purchase of two solar power projects from Solar World. The company has invested higher than $2.5 billion to expand its commercial wind and solar business, ever since 2007.
Future outlook
In the light of the recent legislation passed by the U.S. government and its likely future implications, I would advise buying the stock of SunPower Corporation (NASDAQ:SPWR) as a long term investment. First Solar, Inc. (NASDAQ:FSLR) also holds significant potential but would offer a lower positive return compared to SunPower, as highlighted by its forward P/Es. However, the investor return will take the form of price return only.
Sempra Energy (NYSE:SRE) is also a potential investment. It is likely to generate superior returns in the next few years as the public becomes more informed about the advantages of NGVs and shifts to utilizing natural gas to meet their energy needs. Also, the company provides a regular income stream in the form of a rising dividend year-on-year. In 2013, the company is expected to raise annual dividends by 5%.
Awais Iqbal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Solar Companies See a Bright Future in the U.S. originally appeared on Fool.com is written by Awais Iqbal.
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