These 7 Clean Energy Stocks Are Poised for a Breakout in 2024
As we forge into 2024, the imperative for a global energy transition is more pressing than ever. Consequently, clean energy stocks 2024 isn’t just a buzzword; it’s an investment beacon for investors looking to make a difference while potentially reaping substantial returns. These renewable energy stocks for 2024, despite the collective tardiness in addressing climate change, are poised to deliver powerful results for savvy investors.
Furthermore, companies specializing in solar, wind, hydroelectric, and geothermal energy are at the forefront of this movement. Investing in renewable energy stocks is more than a financial decision; it’s a commitment to delivering environment-friendly initiatives and a bet on disruptive technology to reshape our world effectively. With that said, let’s dive into the world of clean energy stocks in 2024, where potential meets responsibility.
Clean Energy Stocks 2024: NextEra Energy (NEE)
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NextEra Energy (NYSE:NEE) is a titan in renewable energy with massive wind and solar projects, which continue to help it outshine its sector. After an impressive performance in 2023, the company’s fourth-quarter beat estimates across both lines set a bullish tone for the rest of the year. This surge resulted in an EPS of 52 cents, eclipsing Wall Street estimates while beating revenue estimates by $557 million to $6.88 billion. Moreover, the firm cleverly capitalized on a 14% dip in natural gas prices, thanks to ample storage and an unpredictably mild winter. This development has fueled NextEra’s fourth quarter triumph and set a snappy pace for its future financial landscape.
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Looking ahead, with ambitions to bolster its adjusted EPS by a steady 6% to 8% annually through 2026 from 2024 levels, NEE stock could prove to be remarkably lucrative. Additionally, it yields a dazzling 3.2%, raising its payouts for 28 consecutive years, along with a 5-year growth rate of 11%.
Clearway Energy (CWEN)
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In the bustling arena of renewable energy stocks, Clearway Energy (NYSE:CWEN) stands out for its substantial footprint of over 5,500 net megawatts (MW) of wind and solar facilities nationwide and 2,500 net MW of natural gas generation plants. As one of the largest renewable energy providers in the U.S., Clearway has mastered the art of churning out reliable and stable cash flows that comfortably cover its attractive dividend. The company’s operational excellence shines through its robust business performance, marked by more than 4.5% growth in revenues and EBITDA over the past five years.
Diving deeper into its financial allure, Clearway’s dividend yield stands at a compelling 5.8%, with a targeted annual growth between 5% and 8%. The investment case grows stronger with a 6.4% yield, complemented by a 5-year growth rate of 4% and an impressive track record of four years of consecutive payout growth. Moreover, the stock trades at an enticing valuation that’s hard to overlook trading under four times trailing twelve-month cash flows, a figure 45% lower than the sector median.
Furthermore, according to my esteemed InvestorPlace colleague Rich Duprey, the company anticipates a 7% dividend hike in 2024 but assures investors of its dividend’s stability, having secured its funding through 2026.
First Solar (FSLR)
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As we pivot to 2024, First Solar (NASDAQ:FSLR) emerges as a standout choice among green energy stocks, demonstrating impeccable resilience and potential long-term growth. Despite the turbulence in the solar energy sector in 2023, First Solar is gearing up for a monumental transition year. As a juggernaut in manufacturing photovoltaic (PV) solar panels, the firm has not only weathered the storm but has made incredible long-term strides, investing heavily in the solar energy sphere. This includes a remarkable commitment of $2.8 billion in CAPEX towards new solar projects, aiming to add an impressive 7.9 GW generating capacity.
Financially, First Solar’s prowess is unmistakable. The recent quarterly report paints a picture of powerful growth, with sales soaring to $801 million, a notable 27.37% increase year-over-year. The company’s earnings narrative is equally compelling, with EPS hitting $2.5, exceeding expectations by 46 cents. A striking 645.8% surge in net income vividly illustrates the firm’s profitability and efficiency. Moreover, with fiscal 2023 projections indicating more than 30% top-line growth and operating income anticipated to range between $770 million and $870 million, the company’s outlook paints a heartening picture ahead.
Dominion Energy (D)
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Dominion Energy (NYSE:D) is most likely to be a focal point in the utility stock discourse for 2024, capitalizing on its prominence as an established player in the utility sphere. This recognition brings widespread attention, bolstering its robust position in the market. Significantly, Dominion Energy distinguishes itself with a solid dividend yield of roughly 5.9%, making it one of the highest-yielding stocks in its category. Its performance further amplifies its appeal, with an impressive track record of more than 11.5% in sales and EBITDA growth over the last five years, underscoring its financial robustness.
Beyond its financial achievements, Dominion Energy is carving a niche as a key renewable energy stock. This transformation is driven by its substantial pivot towards clean energy, marking significant advancements in solar and wind projects. The company’s ambitious target to achieve net-zero carbon and methane emissions by 2050 mirrors its dedication to sustainable practices.
Air Products (APD)
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Air Products (NYSE:APD) emerges as a standout hydrogen energy stock and a true beacon of consistent dividend growth. With a commendable yield of 2.7%, it boasts an impressive history of increasing its payout for 41 consecutive years. Moreover, as a pivotal force in the hydrogen sector, especially primarily for its contributions to hydrogen fuel production and infrastructure, APD demonstrates a commitment to advancing clean energy solutions.
However, the company’s prowess extends beyond hydrogen, with it operating a diversified portfolio spanning industrial gases, performance materials, and chemical solutions, catering to a wide array of sectors, including healthcare, energy, and manufacturing. Financially, the company’s excellence is clear. Its substantial net income margin of 19.5% and a return on common equity of 16% over the past five years, underscoring its operational efficiency and profitability.
CEO Seifi Ghasemi’s vision for the company further solidifies its stature with plans to return approximately $1.6 billion to shareholders in 2024. Hence, this blend of dividend consistency, sector leadership in hydrogen energy, and a diversified business model firmly establishes APD as a top clean energy stock.
Enphase Energy (ENPH)
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Enphase Energy (NASDAQ:ENPH) is a maestro in solar energy, producing innovative home energy solutions, including solar panels and batteries. Yet, ENPH treads a slightly contrarian path, with its stock price dipping 22% amidst solar industry concerns, notably installation slowdowns. However, it’s critical to discern that these headwinds, mainly with heightened interest rates and inflation in Europe, are cyclical shadows and not a reflection of ENPH’s long-term bull case.
Furthermore, ENPH’s financial metrics radiate strength. Its historical revenue growth, a staggering 57.9%, leaves the sector median far behind, with forward revenue growth also outpacing at 11.15%. Additionally, EBITDA growth projections are amazing, towering at 265.21% above its peers, with a healthy historical rate of 90.12%. Forward FCF growth further impresses at 30.90%. Trading at 16.2 times trailing twelve-month cash flows, 22% below the sector median, ENPH emerges as a remarkably resilient player.
Global X Lithium & Battery Tech ETF (LIT)
In the dynamic realm of energy investments, the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) emerges as a compelling contender. With a modest expense ratio of 0.75% and a bid/ask spread of just 0.11%, the ETF offers investors a holistic exposure to the lithium industry, covering the entire spectrum from mining to battery production.
The ETF boasts a powerful portfolio, including heavyweights the EV and lithium industries including BYD Co. (OTCMKTS:BYDDF), Piedmont Lithium (NASDAQ:PLL), and Standard Lithium (NYSEAMERICAN:SLI), among others. Despite a downtrend last year, LIT has delivered a stellar 70% gain over the past decade, showcasing its potential in a risk-on market climate. Moreover, LIT adds further to its attractiveness with a stable yield of 1.3% and a track record of six consecutive years of payouts.
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
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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