First Solar, Inc. (FSLR), SunPower Corporation (SPWR), Green Plains Renewable Energy Inc. (GPRE): Can Renewables Renew the Life of Your Portfolio?

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First Solar, Inc. (NASDAQ:FSLR)How do you get power to your house? I know it comes to mine through a combination of coal, wind, and solar. There may be some people reading this who are 100% renewable, and then there’s likely others who are the polar opposites. The question that we’re here to answer, though, is whether or not we can make money from the companies powering renewable energy.

Finding the companies

Finding renewable-energy companies that are publicly traded is actually quite a hard task. I wanted to make sure that we had a bit of diversity in what we’re looking at. Unfortunately, most of the weird and wacky companies are just too small to even consider exploring. So, here I bring you the most diverse bunch available.

We have, fighting out of the solar corner, First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR). Meanwhile, in the ethanol-power corner, we have Green Plains Renewable Energy Inc. (NASDAQ:GPRE). So, while it’s not the most diverse bundling of companies, we do get a look at three of the biggest names in renewables.

“If you’re not first, you’re last” – Ricky Bobby

I’m not sure why that quote is there, it just popped into my mind when thinking about First Solar. It probably makes even less sense when you consider that First Solar, Inc. (NASDAQ:FSLR) is far from profitable.

First Solar, Inc. (NASDAQ:FSLR) manufactures solar modules using its proprietary technology. These modules are then sold around the planet. The problem with the company is that it is trying to sell people things that are constantly dropping in price as the technology improves. This is something that is bound to lead to further declines in free cash flow as time goes on.

When it comes to sales of these photovoltaic cells, First Solar, Inc. (NASDAQ:FSLR) is doing quite well. The company sold approximately $3.4 billion worth around the world in 2012. That’s a value that has been consistently on the rise for the last decade. The real problem for the company comes when you look at its net income.

First Solar, Inc. (NASDAQ:FSLR)’s net income is incredibly shaky. This is because of the ever-declining prices of photovoltaic cells. First Solar has lost money in each of the last two years, but prior to that it was making more than $500 million on approximately $2.5 billion in revenue.

Unfortunately for First Solar, Inc. (NASDAQ:FSLR), the company’s analysts don’t believe a comeback is likely. Analysts have actually forecast growth over the next five years of -22.5%. I don’t need to tell you that this is something we won’t want to be investing in.

Won’t get fooled again?

Let’s see if we have better look with SunPower Corporation (NASDAQ:SPWR). This company offers a bit more than First Solar in that it designs, manufacturers, delivers, installs, and even monitors power units for residential and commercial customers. Whoa, that was a mouthful.

Unfortunately, right off the bat, we see that SunPower Corporation (NASDAQ:SPWR) is losing money. Unlike First Solar though, there was considerable growth in net income over the last year, which could potentially brighten the days of SunPower Corporation (NASDAQ:SPWR)’s investors (I think that pun may have been intended.)

Analysts are a bit more positive on this company; their overall rating for it is a ‘hold;’ that’s better than the ‘sell,’ which was carried by First Solar.

Looking at the growth numbers analysts have given, we can see that they actually believe growth will occur over the next half-decade to the tune of 7.5%. That’s not beating the S&P 500 as a whole (9.9%), but it is a start.

What if it’s dark out?

If it’s dark out, you’re likely not keeping the power going. Don’t you worry though, Green Plains Renewable Energy Inc. (NASDAQ:GPRE) has your back. The company is one of the largest producers of ethanol fuel in the United States, which makes the company worth right around $400 million.

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