In this article, we will discuss the 11 best renewable energy stocks to buy right now.
As concerns regarding global warming and climate change arise, governments around the world are pouring billions of dollars into the renewables sector to reduce their carbon footprint. According to BloombergNEF, over $755 billion was invested in the energy sector globally, of which $366 billion was attributed to the renewables sector, up 6.5% from 2020. According to Renewable Energy Market Outlook 2030, the global renewable energy market was valued at $881.7 billion in 2020 and is projected to reach $1.97 trillion by 2030, growing at a CAGR of 8.4% from 2021 to 2030. The renewable energy sector is booming and renewable energy stocks are expected to soar over the next decade, which presents an attractive investment opportunity for retail investors and elite hedge fund owners alike.
The Ukraine Conflict Causes Renewable Stocks To Soar
The Russian invasion of Ukraine has catalyzed the growth of renewable stocks. On February 24, 2022, when Russia launched the invasion in Ukraine, several renewable energy stocks jumped, and have since been on an upwards trajectory. Solar energy solutions provider Sunrun Inc. (NASDAQ:RUN) went up by 22%, solar equipment manufacturer Enphase Energy, Inc. (NASDAQ:ENPH) gained 16%, and solar panel maker First Solar, Inc. (NASDAQ:FSLR) spiked 6.4% within 24 hours of the invasion.
The sanctions on Russian oil and gas, coupled with the climate change targets set by economies around the world, are driving the growth of renewable energy stocks such as Sunrun Inc. (NASDAQ:RUN), First Solar, Inc. (NASDAQ:FSLR), NextEra Energy, Inc. (NYSE:NEE), and Enphase Energy, Inc. (NASDAQ:ENPH).
Photo by Jason Blackeye on Unsplash
Our Methodology
To determine the 11 best renewable energy stocks to buy right now, we did a careful assessment of the renewable energy industry and identified the major players. We then looked at each company’s product portfolio, investor networks, and earnings reports. We made use of Insider Monkey’s database to derive the hedge fund sentiment for each stock and then narrowed down our selection to stocks that are most popular among investor circles today. We also gave weight to the analyst sentiment for each stock and included analyst ratings for each entry.
Without further ado, let’s look at the 11 Best Renewable Energy Stocks to Buy Right Now.
11 Best Renewable Energy Stocks to Buy Right Now
11. Canadian Solar Inc. (NASDAQ:CSIQ)
Number of Hedge Fund Holders: 18
Canadian Solar Inc. (NASDAQ:CSIQ) manufactures and markets solar power products in North America, South America, Europe, South Africa, the Middle East, Australia, Asia, and internationally. The company operates through two segments: Module and System Solutions, and Energy. On March 17, 2022, Canadian Solar Inc. (NASDAQ:CSIQ) released its earnings report for the fiscal fourth quarter of 2021. The company reported revenues of $1.53 billion, up 46.90% year over year from $1.04 billion. The company’s earnings per share were reported at $0.17, outperforming market consensus by $0.04. As of April 3, 2022, Canadian Solar Inc. (NASDAQ:CSIQ) has gained 12.29% over the past six months and boasts a market capitalization of $2.27 billion.
On March 28, 2022, Citi analyst J.B. Lowe raised his price target on Canadian Solar Inc. (NASDAQ:CSIQ) to $45 from $40 and maintained a Buy rating on the shares, in light of the company’s strong fourth-quarter 2021 earnings results.
The hedge fund sentiment for Canadian Solar Inc. (NASDAQ:CSIQ) is positive. Insider Monkey’s database shows that 18 hedge funds were bullish on Canadian Solar Inc. (NASDAQ:CSIQ) at the close of the fourth quarter of 2021, having stakes worth roughly $39.5 million in the company. This is compared to 12 hedge funds in the third quarter of 2021, with stakes worth $35.7 million. As of March 11, 2022, Ken Griffin’s Citadel Investment Group was the leading shareholder in Canadian Solar Inc. (NASDAQ:CSIQ) having stakes worth $9.44 million in the company.
10. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 20
SunPower Corporation (NASDAQ:SPWR) offers solar, storage, and home energy solutions to customers primarily in the United States and Canada. This March, SunPower Corporation (NASDAQ:SPWR) announced a multi-year exclusive agreement with Landsea Homes Corp (NASDAQ:LSEA) in which the company will provide solar technology solutions to Landsea Homes across the nation. Moreover, homebuyers in Arizona, Florida, and Texas will also be offered to add this technology to their new homes.
On March 31, 2022, SunPower Corporation (NASDAQ:SPWR) hosted an analyst day in which it laid out its $1 billion capital plan. Morgan Stanley analyst Stephen Byrd pointed out that he sees multiple drivers for long-term margin improvement and long-term trends that will be profitable for SunPower Corporation (NASDAQ:SPWR) after looking at the company’s capital plan. Stephen Byrd reiterated an Equal Weight rating and a $21 price target on the company’s shares.
At the close of the fourth quarter of 2021, SunPower Corporation (NASDAQ:SPWR) was spotted on 20 hedge fund portfolios with stakes amounting to roughly $118.09 million. Of these, D E Shaw was the most prominent shareholder in SunPower Corporation (NASDAQ:SPWR), having stakes worth more than $67.4 million in the company.
Like Sunrun Inc. (NASDAQ:RUN), First Solar, Inc. (NASDAQ:FSLR), NextEra Energy, Inc. (NYSE:NEE), and Enphase Energy, Inc. (NASDAQ:ENPH), SunPower Corporation (NASDAQ:SPWR) is a renewable energy stock with significant upside potential.
9. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 21
Brookfield Renewable Partners L.P. (NYSE:BEP) owns a portfolio of renewable power generating facilities in North America, Colombia, Brazil, Europe, India, and China. This February, Brookfield Renewable Partners (NYSE:BEP) declared a quarterly cash dividend of $0.32 per share, up 5.3% from the prior dividend of $0.30. The dividend was payable by March 31, 2022, to shareholders of record on February 28, 2022. As of April 3, 2022, Brookfield Renewable Partners L.P. (NYSE:BEP) has a forward dividend yield of 3.12% and has gained 12.99% over the past six months.
On February 1, 2022, Brookfield Renewable Partners L.P. (NYSE:BEP) announced that it has entered into a 40-year escalating electricity purchase agreement with Lievre Power. Under the terms of the agreement Hydro-Quebec, the company’s Canadian subsidiary, will purchase the output of the Lievre hydroelectric facilities in Quebec with 263 megawatts of capacity. The facilities will generate roughly 1.5 terawatt-hours annually, the amount of energy used to power 90,000 homes.
Brookfield Renewable Partners L.P. (NYSE:BEP) is rising in popularity among analysts and investor circles. This April, BMO Capital analyst Ben Pham raised his price target on Brookfield Renewable Partners L.P. (NYSE:BEP) to $42 from $38 and maintained an Outperform rating on the shares. By the end of the fourth quarter of 2021, 21 hedge funds held stakes worth more than $234.36 million in the company. This is compared to 17 hedge funds in the previous quarter with stakes worth $145.16 million. The analyst and hedge fund sentiment for Brookfield Renewable Partners L.P. (NYSE:BEP) is positive.
As of March 21, 2022, Select Equity Group owns the most shares of Brookfield Renewable Partners L.P. (NYSE:BEP), making it the most prominent stakeholder in the company. The fund’s stakes amounted to $40.59 million, which makes up for 0.11% of its 13F portfolio.
8. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 23
Plug Power Inc. (NASDAQ:PLUG) is a leading provider of hydrogen fuel cell solutions in North America and internationally. This March, the company reported its revenues for the fiscal fourth quarter of 2021, which came to $161.91 million, outperforming market consensus by $4.12 million. As of April 3, 2022, Plug Power Inc. (NASDAQ:PLUG) has gained 16.53% over the past six months and boasts a market capitalization of $16.38 billion.
On March 28, 2022, Plug Power Inc. (NASDAQ:PLUG) announced that McDermott International Ltd., an engineering solutions provider for the energy industry, will be building two 500,000-gallon double-wall liquid hydrogen spheres for Plug Power Inc.’s (NASDAQ:PLUG) hydrogen production facility in New York. The production facility is expected to produce 45 metric tons of green liquid hydrogen per day, making it the largest green hydrogen facility in North America.
Plug Power Inc. (NASDAQ:PLUG) is rising in popularity among analysts and elite hedge funds alike. This January, Susquehanna analyst Biju Perincheril initiated coverage of Plug Power Inc. (NASDAQ:PLUG) and gave the stock a Positive rating with a $26 price target. The analyst sees significant upside for Plug Power Inc. (NASDAQ:PLUG) as its renewable hydrogen ecosystem develops over time, and cites the company’s ability to provide completely functional renewable-energy solutions from electrolyzers to hydrogen fuel cells. By the end of the fourth quarter of 2021, Plug Power Inc. (NASDAQ:PLUG) was spotted on 23 hedge fund portfolios that held stakes worth $281.98 million in the company.
As of the fourth quarter of 2021, DE Shaw was the largest stakeholder in Plug Power Inc. (NASDAQ:PLUG). The fund’s stakes amounted to $166.17 million, which covers 0.13% of its investment portfolio.
7. Sunnova Energy International Inc. (NYSE:NOVA)
Number of Hedge Fund Holders: 25
Sunnova Energy International Inc. (NYSE:NOVA) provides residential energy services in the United States. Last December, B. Riley analyst Christopher Souther named Sunnova Energy International Inc. (NYSE:NOVA) among the top solar and storage ideas heading into 2022. The analyst commented that the growth opportunities are compelling over the medium and long term as the global transition to cleaner energy and technologies accelerates. As of December 31, 2021, Sunnova Energy International Inc. (NYSE:NOVA) operates a fleet of residential solar energy systems with a power output of 1,140 megawatts.
On February 23, 2022, the company reported that its revenue for the fiscal fourth quarter of 2021 was valued at $65.02 million, up 70.99% year over year from $38.02 million. Moreover, this February Sunnova Energy International Inc. (NYSE:NOVA) announced that it is extending its strategic collaboration with Generac Holdings Inc. (NYSE:GNRC). This will enable Sunnova Energy International Inc. (NYSE:NOVA) to add its partner’s newly updated technology including energy storage units, standby home generators, microinverters, and load managers to its offerings.
By the end of the fourth quarter of 2021, Sunnova Energy International Inc. (NYSE:NOVA) was spotted on 25 hedge fund portfolios that had total stakes worth $149.91 million in the company. Of these, Electron Capital Partners is the most prominent shareholder in the company as of March 9, 2022. The fund’s stakes in Sunnova Energy International Inc. (NYSE:NOVA) were valued at roughly $38.15 million, representing 1.95% of Electron Capital Partners’ Q4 2021 investment portfolio.
6. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 25
Bloom Energy Corporation (NYSE:BE) manufactures and installs solid-oxide fuel cell systems that generate electricity on-site. This February, the company reported that its revenue for the fiscal fourth quarter of 2021 came to $342.47 million, up 37.33% year over year, and outperformed market consensus by $33.53 million. As of April 3, 2022, Bloom Energy Corporation (NYSE:BE) has gained 45.12% over the past six months and boasts a market capitalization of $4.35 billion.
The analyst and investor sentiment for Bloom Energy Corporation (NYSE:BE) is positive. Insider Monkey’s data shows that at the close of the fourth quarter of 2021, 25 hedge funds were bullish on Bloom Energy Corporation (NYSE:BE) and held stakes worth more than $92 million in the company. This is compared to 18 positions in the third quarter of 2021, with stakes of roughly $43 million.
On February 28, 2022, Susquehanna analyst Biju Perincheril upgraded Bloom Energy Corporation (NYSE:BE) to Positive from Neutral and raised his price target to $33 from $18, in light of the current geopolitical situation. The analyst commented that the current geopolitical tensions can be a key driver for hydrogen-fuel adoption in European and other markets.
As of March 24, 2022, Marshall Wace LLP was the dominating stakeholder in Bloom Energy Corporation (NYSE:BE) having stakes worth more than $24.6 million. The investment covers 0.04% of the fund’s Q4 2021 investment portfolio.
Investors are bullish on Bloom Energy Corporation (NYSE:BE). Other renewable energy stocks that have bullish investor sentiment include Sunrun Inc. (NASDAQ:RUN), First Solar, Inc. (NASDAQ:FSLR), NextEra Energy, Inc. (NYSE:NEE), and Enphase Energy, Inc. (NASDAQ:ENPH).
5. Sunrun Inc. (NASDAQ:RUN)
Number of Hedge Fund Holders: 31
Here is what Horizon Kinetics had to say about Sunrun Inc. (NASDAQ:RUN) in its Q2 2021 investor letter:
“What this table did not cover is valuation. What’s expensive, what’s cheap? A good business that is too expensive is not a good investment. The most expensive business in the table is Sunrun. Sunrun is the nation’s largest residential rooftop solar panel system seller/installer. Sunrun’s valuation might also shed Thumbnail valuation.
To start at the top of the income statement, Sunrun shares trade at 10.3x revenues. The most profitable company in the S&P 500, Microsoft, trades at 13x revenues. Sunrun operates at a loss. Obviously, not only is tremendous growth anticipated, but tremendous profitability, too.
Let’s simply accept that investors have correctly anticipated Sunrun’s future success and make that the starting point for a valuation exercise.
If, 10 years from now, Sunrun is ultimately valued at 25x net income, and if today’s $9.5 billion valuation is appropriate, that would require $380 million of net income ($9,500 million ÷ 25).
Let’s say Sunrun will have the same net profit margin as the average S&P 500 company, which is 10%. That means it would need $3,800 million of sales to generate that level of earnings ($380 mill ÷ 10%).
Since sales are now $920 million, they would have to rise by 4.1x in the next 10 years. That would require annual sales growth of 15.2%.
You see how neatly that all works: investors accept the company’s 10-year, 15% annual sales growth projections, and if a 10% net profit margin and a P/E of 25x earnings are reasonable, then the company will have a $9.5 billion market cap at that time. Except that is the current price. That means a 10-year
return of zero.In order to get a 10% annualized return from the stock, Sunrun would need to be priced at a P/E of 65x its earnings 10 years from now, if at a 10% net margin. Or it would have to have some combination of lower P/E and higher growth and/or higher profit margin.
In the meantime, this is Sunrun’s recent pattern of revenue growth and profitability (the company did recently increase its estimate of installed-capacity growth in 2021 from 20-25% to a new estimate of 25% to 30%).
For the time being, Sunrun loses an extraordinary amount of money, an amount that has been getting larger. Perhaps there are scale economies that will manifest in the future, so that it will attain profitability. Perhaps from the roughly one-half of Sunrun’s revenues that are from long-term customer service
agreements that run up to 25 years. For now, though, the company would seem to require a lot of external financing, and that is one of the greatest of business risks.”
4. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 34
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is an Israel-based provider of power optimizers, solar inverters, and monitoring systems for photovoltaic arrays. This April, Wells Fargo analyst Michael Blum raised his price target on SolarEdge Technologies Inc. (NASDAQ:SEDG) to $399 from $361 and maintained an Overweight rating on the shares. The analyst sees upside for SolarEdge Technologies Inc. (NASDAQ:SEDG), following the company’s investor day, on which the company presented long-term target revenue and profitability guidance for the solar business along with unveiling new products to be launched in the second half of 2022. Blum commented that the company is bound for growth as global battery adoption rates increase and there is a consistent expansion of the residential and commercial solar markets.
On February 15, SolarEdge Technologies, Inc. (NASDAQ:SEDG) reported that its revenues for the fiscal fourth quarter of 2021 came to $551.92 million, outperforming market consensus by $1.96 million. The company reported earnings per share of $1.10. As of April 3, 2022, SolarEdge Technologies, Inc. (NASDAQ:SEDG) has gained 26.47% over the past six months and boasts a market capitalization of $17.79 billion.
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is becoming a popular renewable energy stock pick among investors. By the end of Q4 2021, 34 hedge funds were bullish on SolarEdge Technologies, Inc. (NASDAQ:SEDG), having stakes worth more than $766.5 million. This is compared to 33 hedge funds in Q3 2021, with stakes worth roughly $594.4 million. It can be concluded from these numbers that the hedge fund sentiment for the stock is positive.
As of March 30, 2022, Impax Asset Management is the most prominent shareholder in SolarEdge Technologies, Inc. (NASDAQ:SEDG), having stakes worth more than $210.83 million in the company, up 1% from its previous stakes of $198.2 million. The investment covers 0.77% of Impax Asset Management’s Q4 2021 investment portfolio.
3. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 36
First Solar, Inc. (NASDAQ:FSLR) manufactures solar panels and provides utility-scale photovoltaic power plants and supporting services that include finance, construction, maintenance, and end-of-life panel recycling. This January, Raymond James analyst Pavel Molchanov upgraded First Solar, Inc. (NASDAQ:FSLR) to Market Perform from Underperform without a price target. On March 31, 2022, SunPower Corporation (NASDAQ:SPWR) announced that it is in talks with First Solar, Inc. (NYSE:FSLR) jointly to develop residential solar panels, after which First Solar, Inc.’s (NYSE:FSLR) share price spiked by 2%. As of April 3, 2022, the company is worth $8.93 billion on the open market.
On March 1, 2022, First Solar, Inc. (NASDAQ:FSLR) released its earnings report which detailed the company’s earnings for the fiscal fourth quarter of 2021. According to the report, First Solar, Inc. (NASDAQ:FSLR) generated revenues of over $907.32 million, up 48.93% year over year. The company’s earnings per share were valued at $1.23, beating EPS estimates by $0.17.
First Solar, Inc. (NASDAQ:FSLR) is growing in popularity among elite hedge funds. As of March 11, 2022, Renaissance Technologies is the top shareholder in First Solar, Inc. (NASDAQ:FSLR), having stakes worth more than $46.5 million in the company. In addition to Renaissance Technologies, 35 other hedge funds held stakes in the company by the end of the fourth quarter of 2021. The total value of these stakes was roughly $200 million.
2. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 50
Enphase Energy, Inc. (NASDAQ:ENPH) operates as an energy technology company headquartered in California. The company provides software-driven home energy solutions for solar generation, home energy storage, and web-based monitoring and control systems. On March 31, 2022, Enphase Energy, Inc. (NASDAQ:ENPH) announced its plans to expand battery storage in Oklahoma. The company is witnessing growing demand for its energy systems in Oklahoma and is offering residents and homeowners the option to install its IQ8 Microinverters, which can provide solar power during power outages.
This February, Enphase Energy, Inc. (NASDAQ:ENPH) reported its earnings for the fiscal fourth quarter of 2021. The company generated revenues of $412.72 million, up 55.84% year over year, and outperformed market consensus by $12.84 million. The company’s earnings per share for the quarter came to $0.73, beating expert EPS estimates by $0.14. As of April 3, 2022, Enphase Energy, Inc. (NASDAQ:ENPH) has gained 41.96% over the past six months and has a market capitalization of $27.58 billion.
Enphase Energy, Inc. (NASDAQ:ENPH) is gaining popularity among analysts and investor circles. On March 14, 2022, Piper Sandler analyst Kashy Harrison raised her price target on Enphase Energy, Inc. (NASDAQ:ENPH) to $237 from $227 and maintained an Overweight rating on the shares. Moreover, By the end of the fourth quarter of 2021, 50 hedge funds held stakes in Enphase Energy, Inc. (NASDAQ:ENPH) worth more than $763.2 million.
As of March 23, 2022, D E Shaw is the largest shareholder in Enphase Energy, Inc. (NASDAQ:ENPH) having stakes worth more than $182.92 million in the company. The investment covers 0.15% of D E Shaw’s Q4 2021 investment portfolio.
1. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 55
NextEra Energy, Inc. (NYSE:NEE) is the largest renewable energy company by market capitalization. The company boasts a power generation capacity of more than 58 gigawatts and generates power through its wind, solar, nuclear, coal, and natural gas facilities. As of April 3, 2022, NextEra Energy, Inc. (NYSE:NEE) has a market capitalization of $168.23 billion and has gained 8.00% over the past six months. This March, KeyBanc analyst Sophie Karp gave NextEra Energy, Inc. (NYSE:NEE) an $87 price target, and upped her rating on the shares to Overweight from Sector Weight.
On January 25, 2022, NextEra Energy, Inc. (NYSE:NEE) released its earnings report for the fiscal fourth quarter of 2021, in which the company beat EPS by $0.01. The company reported earnings per share of $0.41 and generated quarterly revenues of $5.05 billion, up 14.81% year over year.
Insider Monkey’s database tracks 924 elite hedge funds as of the fourth quarter of 2021, of which 55 hedge funds held long positions in NextEra Energy, Inc. (NYSE:NEE) at the close of Q4 2021. The total value of these funds’ stakes amounted to roughly $2.61 billion, up from $2.37 billion in the third quarter of 2021 when 53 hedge funds held stakes in the company. The hedge fund sentiment for NextEra Energy, Inc. (NYSE:NEE) is positive.
As of March 29, 2022, Ken Fisher’s Fisher Asset Management is the dominating stakeholder in NextEra Energy, Inc. (NYSE:NEE). The fund’s stakes in the company were valued at over $1.4 billion, a 4% increase from the fund’s previous stakes of $1.14 billion in the company. NextEra Energy, Inc. (NYSE:NEE) represents 0.78% of Fisher Asset Management’s 13F portfolio.
You can also take a look at 15 Biggest Renewable Energy Companies and Stocks and 10 Best Renewable Energy Stocks to Buy Now.
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Disclosure: None. 11 Best Renewable Energy Stocks to Buy Right Now is originally published on Insider Monkey.
