Get Your Green With These 3 Renewable Energy Stock Picks
The bullish case for renewable energy stocks arguably comes down to one central theme: rising relevance.
For years, scientists and former Vice President Al Gore have been warning Americans and the global community about climate change. Recently, the narrative has picked up steam as the data becomes all the more undeniable. So, that’s one key reason why renewable energy stocks have picked up interest – it’s good for all of us.
Another factor that bolsters the bullish case for the green sector is geopolitics. We’ve seen firsthand that dependency on foreign sources of energy can leave us compromised and vulnerable. By their very nature, however, renewable energy can be sourced anywhere. That helps the planet and may even mitigate geopolitical blackmail.
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And while there will likely always be room for hydrocarbons, more jurisdictions are pushing for green and sustainable solutions. With that, below are three renewable energy stocks to consider.
Ormat Technologies (ORA)
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One of the more intriguing ideas among renewable energy stocks, Ormat Technologies (NYSE:ORA) primarily focuses on geothermal energy. It’s basically what it sounds like — heat from within the earth that’s converted for practical deployment. Further, because the heat is continuously being produced inside the earth’s core, it’s legitimately a sustainable source of energy.
At the moment, geothermal only accounts for about 0.4% of electricity generation in the U.S. That doesn’t seem like a lot because it isn’t. However, as political pressures build to develop renewable energy infrastructures, Ormat would be well positioned for growth. Further, the geopolitical realm is only getting more tense with flashpoints erupting in multiple areas. Thus, it’s never been more important to diversify our energy supply chain.
Looking ahead, analysts anticipate that current-year revenue will land at $888.2 million, up 7.1% from last year. Further, in 2025, experts estimate that sales will reach just under $975 million. Overall, Wall Street experts rate ORA a consensus moderate buy with a $75.63 price target, implying 16% upside potential.
NextEra Energy (NEE)
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A top-tier name among renewable energy stocks, NextEra Energy (NYSE:NEE) has made considerable investments in green solutions. According to its website, NextEra operates under the directive to lead the decarbonization of America. It’s already done much to achieve this lofty goal, with $85 billion to $95 billion in planned investments in U.S.-based infrastructure through 2025. As well, it seeks a 99% reduction in dependency on foreign oil.
To be sure, though, NEE has had a rough outing due to high inflation and high interest rates crimping the renewable energy industry. Since the start of the year, NEE stock lost more than 10% of equity value. Over the trailing year, it’s down 21%. Not helping matters is that analysts anticipate sales of only $27.76 billion in 2024, down 1.3% from last year.
Still, the high-side estimate calls for $30.73 billion in revenue. In addition, the experts believe that NEE could hit $68.89 per share, translating to about 25% upside. Therefore, speculators should keep NextEra on their radar.
Brookfield Renewable (BEP)
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A publicly traded limited partnership, Brookfield Renewable (NYSE:BEP) owns and operates renewable power assets. Along with 100 wind farms and over 550 storage facilities, Brookfield owns over 200 hydroelectric plants. According to the Department of Energy, hydropower represents one of the oldest and largest sources of renewable energy, which leverages the natural flow of moving water to generate electricity.
Right now, hydroelectric facilities account for 28.7% of total U.S. renewable electricity generation. This translates to 6.2% of total U.S. electricity generation, thus demonstrating Brookfield’s relevance. Still, BEP stock has had trouble in the market, losing nearly 14% since the January opener. In the past 52 weeks, it also lost 14%, reflecting the volatile nature of the green space.
Also, analysts see current-year revenue landing at $5 billion, down about 1% from last year. However, they anticipate a recovery to occur in 2025, with sales projected to reach $5.7 billion by then.
Still, analysts also believe that shares will reach $29.14 over the next 12 months. So, growth could potentially come early for BEP.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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