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Renewable Energy Titans: 7 Top Picks for Growth and Profitability

Despite the massive volatility in the stock market over the last year, there are many renewable energy stocks providing great value. Renewable energy is the future of the world. The popularity of the future of renewable energy is on a massive incline, and the renewable energy market is valued at ~$1 trillion and growing. As renewable energy increases in popularity, investors should keep an eye out for these stocks, spearheading the future for energy. The incentive to invest in renewable energy has rapidly increased since it can eliminate greenhouse gas emissions, and it is seen as a reliable and unlimited source of energy to slow the effects of global warming. This article will highlight seven renewable energy stocks investors should keep a lookout for.

Renewable Energy Stocks: Clearway Energy (CWEN)

the clearway energy (CWEN) logo on a web browser under a magnifying glass
the clearway energy (CWEN) logo on a web browser under a magnifying glass

Source: Pavel Kapysh / Shutterstock.com

Clearway Energy (NYSE:CWEN) owns and operates utility-scale solar, distributed solar, natural gas, wind turbines, and thermal generating assets across North America and is paving the way for the future of energy with reusable and reliable power. It has a generation capacity of about 4.22 gigawatts of energy and plans to increase it to 16.32 gigawatts by 2030. CNN Business analysts estimate that this stock will trade within a one-year price range of $23.00-$43.00, with an average of $29.00.

Clearway Energy has shown its commitment to its cause to save the environment by setting a goal for 2034 to make 90% of its electricity production carbon-free. Clearway Energy has a competitive advantage over its industry by overpowering the energy industry in innovation, dividends, and its hiring score, making it a reliable company compared to its competitors. Due to its innovation advantage, Clearway Energy is likely to see a rise in its stocks since it is most likely to transform the energy industry.

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Clearway Energy has a P/E ratio of 31.49x compared to the industry average of  4.956x. Clearway Energy has a compound annual growth rate of 3.5522% and has made $1.3 billion in revenue.

NextEra Energy, Inc (NEE)

Nextra Energy (NEE) website on a mobile phone screen
Nextra Energy (NEE) website on a mobile phone screen

Source: madamF / Shutterstock.com

NextEra Energy, Inc (NYSE:NEE) mainly produces solar and wind power across both the US and Canada while still having some products in energy storage and EV charging. With a greater push recently in the Inflation Reduction Act of 2022 to use renewable energy, NextEra has and will benefit even more than it already has. In fact, 18 Yahoo Finance analysts predict the stock to trade within a range of $55 to $102.80, with an average of $75.

Despite the high interest rates within the past year, NextEra Energy has added close to 21 gigawatts of clean energy to existing power grids with its new projects in the past year alone.

Also, while the renewable energy sector has fallen, NextEra has been able to stay afloat and even complete more projects.

Looking at the financials, NextEra has a discounted P/E ratio of 14.88x compared to its five-year average of 36.05x. In addition, its revenue has grown 30% and profit 67% in the past year, showing that NextEra is still alive and well. Growing this quickly and being undervalued is so hard to find, so buy NextEra while you still can.

Southwestern Energy Company (SWN)

swn stock
swn stock

Source: Shutterstock

Southwestern Energy Company (NYSE:SWN) is a large player in the natural gas exploration and production industry as it works to innovate and discover within the nation’s most prolific shale gas basins. Yahoo Finance analysts estimate it will trade within a one-year price range of $5 – $15, averaging at around $8.28.

With some of the company’s financial and valuation metrics in mind, Southwestern Energy displays not only its consistent past growth but its capacity for growth in its future, too. Its revenue, for example, almost quintupled in the past four years, increasing ~370% from its revenue of $3 million in 2019 to $14.2 million TTM.

Not only that, Southwest Energy’s profitability, as seen through its gross profit margin and EBITDA margin, is remarkable. Southwest’s gross profit margin of 54.62% TTM is at a ~27% increase compared to its 5-year average of 43.01%. Its EBITDA margin is even crazier at a difference of ~170%, with a TTM value of 61.81% and a 5-year average of 22.89%. Both of these increases indicate a clear increase in Southwest Energy’s profitability and ability to reinvest its profits back into itself, leading to a high potential for future growth for the company.

SM Energy Company (SM)

A close-up shot of pipelines with a setting sun in the background. Energy stocks
A close-up shot of pipelines with a setting sun in the background. Energy stocks

Source: Kodda / Shutterstock.com

SM Energy Company (NYSE:SM) is an independent exploration and production company with a longstanding, principled approach to doing business ethically and responsibly in the natural gas and oil industry (SM Energy). Yahoo Finance analysts estimate it will trade within a one-year price range of $40 – $64, averaging at around $49.75.

SM Energy’s profitability is substantial both alone and when compared to the many unprofitable energy sector stocks that fill the market. Its EBITDA margin is 39% greater than what the company usually has, with a TTM value of 81.92% and a 5-year average of 58.90%.

Like its profitability, the growth of SM Energy is likely to continue increasing in the future. The revenue has increased from $1.5 million in 2019 to $2.6 million TTM, a considerable 65% increase. Its EPS has increased ~650% from -1.66 in 2019 to 9.09 in 2022. Along with those, its forward P/E ratio was 2.67x in the 3rd quarter of 2022 and has gone up to 5.11x as of current, a 91% increase. Overall, SM Energy Company is a great choice for your investment portfolio for not only its solid growth but for its notable profitability.

First Solar Inc. (FSLR)

First Solar logo on smartphone in front of computer screen with graphs. FSLR stock
First Solar logo on smartphone in front of computer screen with graphs. FSLR stock

Source: IgorGolovniov / Shutterstock.com

First Solar Inc. (NYSE:FSLR), an American company specializing in solar technology, is a leading global supplier of PV (“photovoltaic”) solar energy solutions. The company conducts research and development activities at its facilities located in both California and Ohio. Founded in 1999 and being the 4th largest solar energy company, First Solar’s many years of experience and innovation make it an industry titan. With the growing popularity of renewable energy and large capital available, First Solar has massive potential for expansion and earnings. Yahoo Finance analysts estimate it will trade around a one-year price of $237.57.

The company’s revenue has remained stable over the past few years, and the PE ratio of 93.34x is above the industry average. However, the large amount of capital it invests in innovation (patents) and new plants being constructed are what assure analysts to estimate large earnings and EPS growth.

Looking at its financials, First Solar’s sales are expected to grow by 24.90% in the next quarter. This July, it announced a 1.1 billion dollar solar panel factory. In the past 12 months, the company has made 2.9 million dollars in revenue. Overall, First Solar has massive potential for growth and is very profitable. I personally recommend it, and it’s a great buy.

General Electric (GE)

A large General Electric (GE) sign.
A large General Electric (GE) sign.

Source: testing / Shutterstock.com

General Electric (NYSE:GE) is a multinational conglomerate known for manufacturing and providing diversified technology and services. A significant part of the business is its renewable energy segment, which cements the company’s position as a leader in green technology and innovation. Yahoo Finance analysts estimate that this stock will trade within a one-year price range of $84 – $141, with an average of $126.

Although renewable energy stocks aren’t doing very well right now, they are set to grow in 2024 and beyond, with the supply chain getting back on track after a rough couple of years. At the forefront of this growth will be General Electric due to its significant presence when it comes to renewable grid solutions and offshore wind power. The business is currently facing a loss. However, as described in its Q3 earnings call, orders have been consistently increasing despite the current tumultuous conditions.

General Electric is currently trading at a P/E Ratio of 11.43x, which is much, much lower than the Renewable Industry’s P/E of 83.88x. This makes General Electric relatively undervalued compared to some of its peers in the green and renewable energy industry. The stock is poised to grow pretty well in the future as well, with a 190% year-over-year EPS Growth rate. These impressive metrics make General Electric a good consideration for any portfolio that needs a well-established renewable energy stock.

Brookfield Renewable Corp (BEPC)

A phone displaying the logo for Brookfield Renewable Corporation (BEPC)
A phone displaying the logo for Brookfield Renewable Corporation (BEPC)

Source: Piotr Swat / Shutterstock

Brookfield Renewable Corp (NYSE:BEPC) is a Canadian energy company specializing in renewable power generation. Its diverse portfolio of renewable assets and strong commitment to sustainable energy solutions position the company as a leader in the renewable energy sector. Yahoo Finance analysts estimate that this stock will trade within a one-year price range of $34 – $37, with an average of $35.5.

Brookfield Renewable excels in its diverse and extensive portfolio of renewable energy assets, consisting of hydro, wind, solar, and energy storage solutions, providing a robust foundation for sustainable power generation. Its global reach, as shown through its partnership with Australian company Origin Energy, and strong operational capabilities reinforce its competitive advantage in the renewable energy industry.

Brookfield Renewable Corp is extremely undervalued, trading at a P/E of 5.86x, which is merely a fraction of the Renewable Energy industry’s P/E of 83.88x. It is a low-risk stock, with its balance sheet still staying strong despite the unfavorable market conditions that disproportionately affect energy companies. With a 5-year average revenue growth of 11.9%, Brookfield Renewable has proven that it does not disappoint when it comes to its revenue, and this trend is likely to continue in the future. Overall, Brookfield Renewable Corp is a renewable energy company that anyone should be interested in investing in.

On the date of publication, Ian Hartana and Vayun Chugh 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.

Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.

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