Discerning investors are locking their radars onto the top renewable energy stocks in navigating the rapidly transforming energy landscape. These stocks aren’t just bright spots on the horizon; they represent critical pillars underpinning the global shift towards clean, sustainable power.
The International Energy Agency forecasts a surge in electricity demand, set to rev up this year, propelled by the proliferation of electric vehicles, green hydrogen, and data centers. This uptick isn’t merely a blip, as renewables are set to become the primary electricity source by 2025.
Hence, the potential of this green revolution extends beyond the planet’s well-being. Investors picking high-potential renewable energy stocks today strategically position themselves for long-term profits. As such, placing renewable energy winners in your portfolio isn’t just good stewardship; it’s a savvy financial move.
Livent Corp (LTHM)
Livent Corp (NYSE:LTHM) is a vanguard of high-purity lithium hydroxide production, positioning itself in the fast-growing EV battery market. Its robust first-quarter performance, with earnings per share of 60 cents on $235.5 million in sales, underscores its strong operational efficiency.
Moreover, it lifted its full-year EBITDA guidance to between $530 million and $600 million, smashing past predictions. Growth rates across both lines have been incredible in the past year, and forward estimates are mighty encouraging for the firm.
The upcoming merger with Allkem Ltd., an all-stock $10.6 billion deal due by year-end, adds another feather to Livent’s cap. The tie-up will result in the third-largest lithium producer globally, which could effectively leverage the prevailing tight supply and robust demand. Consequently, these merging entities are on course to unlock massive long-term growth.
First Solar Inc (FSLR)
First Solar Inc (NASDAQ:FSLR) remains resilient in the solar tech space despite dwindling residential demand at this time. The company, boasting diversified offerings, is forging ahead on the back of secular tailwinds. The ambitious goal of the U.S. government to double renewable energy production for electricity in the next 30 years offers massive opportunities for First Solar.
Interestingly, the firm has strategically shifted its focus onto U.S. utility providers, with an impressive 30% of the market. It positions First Solar as a linchpin in the rollout of net-zero initiatives, particularly in states such as California. As more states and nations hop on the bandwagon of green policies, the firm is in pole position to effectively capture the snowballing demand for solar solutions. Moreover, First Solar stands to gain significantly with the economy on the mend and the spotlight pivoting to solar innovation.
Shoals (SHLS)
Shoals (NASDAQ:SHLS) boasts a powerful portfolio of products designed to supercharge solar platform performance effectively. Leading the pack is its Big Lead Assembly, a stripped-back wiring system primed to streamline energy transfer from solar panels to the power grid. It enables the firm to simplify and boost solar energy harnessing, setting a new standard in the field.
The company’s sturdy business performance speaks volumes, boasting a steady net income margin of 12.4% and a whopping sales growth rate of 30.2% over the past five years. CEO Jeffrey Tolnar proudly announced record-breaking figures during the first quarter earnings call, led by soaring growth in sales, gross profit, and adjusted net income.
With its eyes on the horizon, Shoals predicts another wave of triumphs in the upcoming quarter. Its top line is projected to swell by a jaw-dropping 47% to 56% year-over-year. Meanwhile, it forecasts its adjusted EBITDA to reach an impressive range of $145 million to $160 million.
Maxeon (MAXN)
Maxeon (NASDAQ:MAXN) is a leading China-based solar module producer that has been one of the top players in its niche. Concerns over the Chinese economy and U.S. residential solar policy have cast a shadow on the stock’s future value. Nevertheless, its year-to-date gains stand at an impressive 71%.
Even with California reducing payments for electricity produced through rooftop solar systems, the overall U.S. residential solar installations remain on an uptrend this year. Moreover, Maxeon’s last quarter performance remains a beacon of strength, with the company’s top line surging by an amazing 43% year-over-year.
Moreover, U.S. investors appear to harbor a more optimistic outlook for Maxeon than its peers. This is especially true given Maxeon’s sizable exposure to the rapidly growing European solar sector. According to Tipranks analysts, the company stands as a strong buy with an estimated upside of 39% from its current levels.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) has established its position as a key player in the buzzing green hydrogen realm. It essentially pioneered a holistic green hydrogen ecosystem with e-mobility, material handling, and stationary power applications involving EV charging, positioning the firm uniquely in the renewable energy sphere.
The firm’s ambitious growth blueprint, unveiled by CEO Andy Marsh, propels it to achieve annual sales of a whopping $20 billion by 2030, a significant leap from the expected $1.4 billion this year. This ambitious projection attests to the company’s confidence and underscores its vast potential in the green hydrogen market.
The Inflation Reduction Act is bolstering its prospects. It offers tax credits designed to speed up the deployment of green hydrogen in the U.S. Additionally, the firm has been effectively securing contracts in Europe, a region currently spearheading hydrogen infrastructure development. These developments reflect the company’s massive growth trajectory, which continues to grow on the back of company initiatives.
Orsted (DNNGY)
Denmark-based, Orsted (OTCMKTS:DNNGY) focuses on constructing offshore wind turbines and has quickly ascended to the ranks of the top renewable energy stocks. Its built a robust business, boasting solid growth across both lines over the past several years. For instance, its three-revenue growth is at 28.6%, surpassing more than 70% of its peers. Consequently, it has solidified its financial positioning, with a debt-to-EBITDA of 2.87, better than 65% of its competition.
It wrapped up 2022 with a bang, with operating income leaping to $1.6 billion from $1.3 billion in the previous year and revenue surging to a robust $19 billion from $11.9 billion. This financial robustness accentuates Orsted’s lucrative position in the green energy landscape.
Moreover, the firm is branching out into other realms, with an appetite for massive ventures, which aligns seamlessly with Europe’s green energy mandates and escalating demand for new power sources. An example includes its e-methanol plant currently under construction in Sweden and plans to establish an impressive 15 gigawatts of offshore wind turbines in Sweden by 2032.
Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners (NYSE:BEP) has an impressive global footprint and is well-positioned to ride the renewable energy wave. The firm specializes in hydroelectric power, wind, and solar energy. It is poised to reap colossal long-term benefits from the anticipated surge in global demand for electricity, particularly renewable sources.
Moreover, Brookfield showcases its finesse in managing unique assets through long-term fixed-rate contracts, known as power purchase agreements, selling the energy generated by its assets to electric utilities and other interested parties.
This strategy is already paying dividends, shown by its solid first quarter results, marked by an impressive 16.7% year-over-year rise in revenue and a 13% year-over-year increase in funds from operations per unit, topping off at $275 million. Speaking of dividends, BEP stock yields an enticing 4.6%, with 2 years of consistent dividend growth. As we advance, the firm believes its new projects this year are expected to fuel a net increase of $70 million in its FFO, making it a beacon among renewable energy stocks.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines