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3 Stocks to Gain Traction From Clean Energy Revolution

Vedika Agarwal
·5 min read

Rising awareness against emission has resulted in Clean Energy Revolution with advanced countries across the globe trying to find out ways to generate clean energy and cut down on their carbon footprint. Fossil fuel, primarily coal, provided majority of the energy needed for building modern civilization and silently contributed to the massive greenhouse gas emission that caused climate change.

Usage of new technology and the lookout for options to harness the clean energy sources available in nature to produce electricity is taking the global clean energy mission forward. Major technological development and ongoing research & development activities are supporting this energy revolution. Per the U.S. Department of Energy, major contributors to this conversion to clean energy resources are wind energy, utility scale solar projects, distributed solar generation, LED lightings and Electric Vehicles (EV).

Going by the recent U.S. Energy Information Administration (EIA) release, electricity generation from renewable energy sources is expected to increase from 18% in 2019 to 20% in 2020 and further to 22% in 2021. The expansion of renewables’ share in total power generation is the result of planned additions to wind and solar generating capacity.

The companies belonging to the Zacks Utilities sector are also participating in the clean energy race. These players are voluntarily setting targets to reduce their toxic emissions more than the amount required by the state law or shift their operations to a more environmentally sustainable kind.

According to Frost & Sullivan’s findings, on a global scale, investments in the renewable energy sector are expected to rise to $3.4 trillion by 2030 including an estimated investment of $2.72 trillion in solar and wind energy sectors.

Stocks That Benefit From This Transition

The clean energy revolution will create opportunities for companies belonging to different industries, which will be instrumental to bring about the changes. Copper will play a very crucial role to deliver clean energy and support the smooth transition to low carbon economy. Per International Copper Association (ICA) findings, copper will aid in reducing global carbon emission by 16% and more than 70% of global copper will be utilized to deliver electricity within 2030. Per ICA data, EVs will require nearly four times more copper than normal combustion engines and renewable energy will need four to five times more copper compared to traditional fossil fuel generation. This in a way will offer ample scope for Freeport-McMoRan Inc. FCX, which currently has a Zacks Rank #3 (Hold) and skyrocketed 124.2% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here The Zacks Consensus Estimate for 2021 earnings has moved 7.3% north to $1.90 per share in the past 60 days.


 

Per EIA, wind is the fastest growing renewable energy source in the United States and it is gaining traction globally. Wind assets are being installed onshore and offshore and resorting to Global Wind Energy Council (GWEC) report, more than 205 gigawatts (GW) of new offshore wind capacity will be added over the next decade. GE Renewable Energy, a division of General Electric GE, is among the largest global producers of wind turbines, which are technically superior and lower the cost of production. The company introduced Haliade-X, the most powerful offshore wind turbine in the world, which will help make offshore wind a more cost-effective agent of power generation and the company will reap benefits from increasing demand for offshore wind turbines. General Electric currently has a Zacks Rank of 3 and surged 54.3% in the past six months. The Zacks Consensus Estimate for 2021 earnings has been revised 7.1% upward to 30 cents per share in the past 60 days. Also, its long-term (3-5 years) earnings growth rate is pegged at 4.25%.

Moreover, per a Taiwanese market research company PV Infolink, the global solar photovoltaic panel demand is expected to grow approximately 15% and is poised to reach a total capacity of 143.7 GW in 2021. First Solar, Inc. FSLR, the leading producer of solar modules and systems, is replacing its legacy manufacturing fleet over the next several years with the new Series 6 module to expand its Series 6 manufacturing capacity to 6 GWs by 2020-end and 8 GWs by 2021-end. This new series of modules will further curb the costs of setting up utility scale solar projects. Given the buoyancy in demand for solar modules and the company’s efforts to ramp up manufacturing capacity, it is likely to benefit in the long-run. First Solar is currently Zacks #3 Ranked and soared 85.7% in the past six months. The Zacks Consensus Estimate for 2021 earnings has moved 5.1% north to $3.52 per share in the past 60 days. Also, its long-term earnings growth rate stands at 17.40%.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>


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First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
FreeportMcMoRan Inc. (FCX) : Free Stock Analysis Report
 
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