Top 10 Renewable Energy Stocks To Invest In 2021
Why to invest in renewable energy stocks?
We all know that Mr Joe Biden has won the presidential election in the United States. In the first hour after taking the oath of the president of the United States of America, President Joe Biden reentered the United States in the Paris Agreement, as he had promised to do. According to the Intergovernmental Panel on Climate Change(IPCC), there will only be 9 years left to stop the worst consequences of climate change. So, Biden’s administration has put the environment and development of clean energy sources high on agenda. President Biden plans to spend $400 billion in clean energy and innovation over the next ten years as part of a larger mobilization of public funds. Due to this, renewable energy stocks are rallying high on the U.S Stock market.
Green energy companies outperformed their oil and gas counterparts in 2020. The stock market is only one indicator of the industry, but it shows that people expect renewable demand to rise in the coming years, which we are seeing all over the world. In 2020, clean energy investment is expected to account for half of total investment in the energy sector globally. After years of relatively unpredictability, renewables are receiving more investment than ever before, owing to a pandemic, an unprecedented political push to reduce carbon emissions, and the declining cost of green energy. The coronavirus crisis has moved investment away from fossil fuels. Oil prices fell to an all-time low in the spring as a global lockdown reduced demand for oil and gas as people stopped driving and flying.
There are several indicators that show renewables are resilient to the current crisis. In terms of equity shares, the entire energy sector fell by 40%. This includes oil and gas companies that rely on those major utilities. At the same time, shares of wind and solar companies have doubled or more than doubled on average, and in the aftermath of the industry-wide slump, major oil companies such as BP and Total have increased their commitments to green energy. While demand for oil is expected to rise in 2021, it is expected to fall in the following years, according to the International Energy Agency. Meanwhile, demand for renewable energy is expected to rise with the increased adoption of electric vehicles and as countries around the world invest heavily to reduce carbon emissions.
Here are the top 10 best renewable energy stocks to invest for huge returns in 2021.
1.NIO (NYSE: NIO)
NIO is a Chinese premium EV manufacturer. As of today, the stock is trading at $43.36 with a market capitalization of $55.54 billion. NIO designs manufacture and sells electric vehicles while driving innovation in next-generation technologies such as connectivity, autonomous driving, and artificial intelligence. Its models include the EP9 supercar and the ES8 7-seater SUV. The company offers customers home charging, power express valet service, and other power solutions such as public charging, power mobile charging trucks, and battery swapping. It also provides value-added services such as service packages, battery payment plans, vehicle loans, and license plate registration. Li Bin and Qin Li Hong launched the company in November 2014, and it is headquartered in Jiading, China. The company offers customers home charging, power express valet service, and other power solutions such as public charging, power mobile charging trucks, and battery swapping.
In 2020, the sales growth was 108% with a revenue of $2.36 Billion. Analyst estimates the average target price of $415.20 in FY 2021. Although the average analyst’s recommendation is overweight, the stock is good for huge returns looking at the company fundamentals. Investors are bullish on this stock among renewable energy stocks for FY 2021.
2. Enphase Energy Inc. (NYSE: ENPH)
Enphase Energy, Inc. designs, develops, manufactures, and markets microinverter systems for the solar photovoltaic industry. Its brands include IQ Battery, IQ 7 Microinverter Series, IQ Envoy, IQ Envoy Accessories, IQ Microinverter Accessories and Enlighten and Apps. The company was founded by Raghuveer R. Belur and Martin Fornage in March 2006, with headquarters in Fremont, California.
At the time of writing this article, the stock is trading at $160.95.The company had a positive sales growth of 24.04% in 2020. Analyst estimates the average target price of $222.88 in FY 2021. The P/E ratio is considered to be an important indicator of every stock which is 178.29. So, I would like to put this stock in this green energy basket.
3. Brookfield Renewable Partners LP (NYSE: BEP)
Brookfield Renewable Partners LP is a private equity firm that owns a portfolio of renewable energy generation facilities mainly in North America, Colombia, Brazil, Europe, India, and China. Hydroelectric, Wind, Solar, Energy Transition, and Corporate are its business segments. Generation, pumped storage, cogeneration, and biomass are all distributed by the Energy Transition segment. The company was established on June 27, 2011, and is based in Hamilton, Bermuda.
The stock is trading currently at $40.47.Analyst estimate average target price of $46.39 in FY 2021 recommended holding this stock for good returns.
4. NextEra Energy Partners (NYSE :NEP)
NextEra Energy Partners LP engages in the acquisition, ownership and management of contracted clean energy projects with long-term cash flows. It has stakes in North American wind and solar projects, as well as natural gas infrastructure assets in Texas. The company was founded on March 6, 2014, and is based in Juno Beach, Florida.
The stock is currently trading at $69.51.The company had a sales growth of 7.25% in 2020. The analyst put the average target price of $84.11.The current year’s average earning per share estimate is 1.62 up from -1.17 in 2020.
5. First Solar (NASDAQ : FSLR)
First Solar, Inc. engages in the designing, manufacturing, marketing, and distribution of photovoltaic solar power systems and solar modules. It operates through the Modules and Systems segments. The Modules segment is responsible for the design, production, and sale of cadmium telluride solar modules, which convert sunlight into electricity. The Systems segment provides photovoltaic solar power system development, construction, operation, and maintenance. Michael J. Ahearn founded the company in 1999, and it is headquartered in Tempe, Arizona.
As of today, the stock is trading at $82.88.Although the sales growth was -11.48% in 2020, the EPS is estimated to grow from 3.81 to 4.06 in FY 2021. The average target price is estimated to be 90.57 that turns analyst recommendation to put this stock on hold position.
6. Plug Power ( NASDAQ: PLUG)
Plug Power, Inc. is a provider of alternative energy technology that focuses on the design, development, commercialization, and manufacturing of hydrogen and fuel cell systems for the material handling and stationary power markets. Its fuel cell system solution is intended to replace lead-acid batteries in some distribution and manufacturing companies’ electric material handling vehicles and industrial trucks. The company was founded by Larry G. Garberding and George C. McNamee on June 27, 1997, and is headquartered in Latham, NY.
The stock is trading currently at $39.14 and the average target price is 62.49 in FY 2021. The balance sheet of this company looks to be very strong. Hence, the investor can expect good returns in this fiscal year.
7. Ameresco (NYSE: AMRC)
Ameresco, Inc. involves in the provision of energy services, including energy efficiency, asset sustainability, infrastructure upgrades and renewable energy solutions for businesses and organizations throughout North America and Europe. It operates through the following segments: U.S. Regions, U.S. Federal, Non-Solar Distributed Generation (DG), Canada and All Other. The U.S. Regions, U.S. Federal, and Canada segments provide energy efficiency goods and services such as design, engineering, and installation of facilities and other measures to increase productivity and control the operation of a facility’s energy infrastructure, as well as renewable energy solutions and services. The Non-Solar DG sells electricity, processed renewable gas fuel, heat or cooling generated by small-scale plants using renewable energy sources other than solar, and operations and maintenance services for customer-owned small-scale plants. All Other provides enterprise energy management services, consultancy, and integrated photovoltaic systems. George P. Sakellaris founded the company on April 25, 2000, and it is headquartered in Framingham, MA.
As of today, the stock is trading at $45.52 which has an average target price of $74.50 in FY 2021. The earning per share (EPS) is showing an upward steady growth from 1.00 in 2020 to 1.21 in FY 2021. This steady growth is estimated to continue till 2023 as per the current forecast.
8. Canadian Solar (NASDAQ: CSIQ)
Canadian Solar, Inc. engages in the manufacture of solar panel modules and provides solar energy solutions. It operates in two segments: Module and System Solutions (MSS) and Energy. The MSS segment is responsible for the design, development, manufacturing, and sale of solar power products and solar system kits, as well as the operation and maintenance of these products. The Energy segment consists largely of solar project construction and sale, solar power project operation, and electricity sales. Shawn Qu founded the company in October 2001, and it is headquartered in Guelph, Canada.
The stock is currently trading at $48.72.The sales growth was 8.62% in 2020. The market capitalization of this stock is $2.71 Billion. The average target price is $51.60 whereas there is an impressive EPS growth from 1.75 to 2.86. These stats make the investor bullish about investing in this stock and getting high returns.
9. SunRun (NASDAQ : RUN)
SunRun, Inc. engages in the design, development, installation, sale, ownership and maintenance of residential solar energy systems. Through its direct-to-consumer channel, it sells solar service offerings and installs solar energy systems for homeowners. It also provides plans such as monthly lease, full amount lease, buying system, and monthly loan. The company was founded in January 2007 by Robert N. Kreamer, Edward H. Fenster and Lynn M. Jurich and is headquartered in San Francisco, CA.
Now, the stock is trading at $59.21 and the sales growth was 7.41% in 2020. The average target price is 81.17 in FY 2021. The analyst has given a buy call for those who want to earn huge returns in this fiscal year.
10. Li Auto ( NASDAQ : LI)
Li Auto, Inc. designs, develops, manufactures and sells premium smart electric SUVs energy vehicle. It offers families comfortable, convenient, and cost-effective mobility solutions. The firm model includes Li ONE & EREV. Its passenger vehicle market categorized into a sedan, SUV, and MPV segments. The company was founded in April 2015 by Xiang Li, Yanan Shen, Tie Li, and Donghui Ma and is headquartered in Beijing, China.
The stock is currently trading at $26.34.In 2020, the sales growth was super impressive 3229.17% and that’s why this would be my first pick out of them all above stocks listed above. The company fundamentals look to be very strong and analyst estimates the average target price of $263.42 for FY 2021. Investors are very bullish on this stock out of above listed renewable energy stocks for FY 2021.
Green energy is one of the most exciting areas to invest in. Above the top 10 list to invest in renewable energy stocks is completely my research on marketwatch.com but actually have huge returns to back it up. I believe you don’t always have to buy stocks that are not something that you agree with morally. Obviously, there are some people that disagree with a lot of the major companies and there are some great opportunities for people that want to be more conscious about their environmental footprint. Here is a short disclaimer that I am not a licensed financial advisor and this is not financial advice. This is just giving my own opinions on the stock market and you need to do your own research before making any investment decisions.