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7 renewable energy stocks that will be big winners in 2023

Renewable energy stocks are a necessary mechanism to ensure environmental sustainability. According to NASA, the “…potential future effects of global climate change include more frequent wildfires, longer dry spells in some regions, and increased duration and intensity of tropical storms.” Yet this sector does not focus exclusively on the science of climate change.

On the contrary, renewable energy stocks legitimately offer potential upside rewards for potential stakeholders. According to McKinsey & Company, by 2026, “…global renewable electricity capacity will increase by more than 80% from 2020 levels (to more than 5,022 gigawatts).” Additionally, Allied Market Research indicates that the global renewable energy market will reach a valuation of nearly $1.98 trillion by 2030. That’s a massive economy in itself. The only thing you need to do is to arrive early before the given wave. Below are seven renewable energy stocks to consider.

BORNNextEra Energy$76.40
ENPHEnphase Energy$208.02
BEPBrookfield Power$29.29
CWENClearway Energy$33.51
ORAOrmat Technologies$91.60
VAGUEPower of ecological waves$3.84

NextEra Energy (NEE)

Source: PopTika / Shutterstock

A pillar among renewable energy stocks, NextEra Energy (NYSE:BORN) offers a great starting point for investors looking to go green. Basically, NextEra represents one of the largest US capital investors in renewable infrastructure. According to its website, the company is ordering 45,500 megawatts of net generating capacity.

Currently, NextEra has strong support from Wall Street, with analysts covering the stock a strong consensus buy. Indeed, this is a rarity in that the company enjoys a unanimously strong buy opinion. Moreover, the average price target of the experts stands at $97.13, which implies an upside potential of almost 27% from the price at the time of writing.

Recent data suggests that the enthusiasm for NEE is more than justified. At the end of October last year, Reuters mentioned that NextEra smashed revenue estimates due to growing demand for clean energy. For those sitting on the fence, the company also offers a forward dividend yield of 2.2%. Combined with the upside potential of the experts, NEE ranks among the renewable energy stocks to buy.

Enphase Energy (ENPH)

Solar penny stocks: a close up of a solar cell farm

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Considered an energy technology company, Enphase Energy (NASDAQ:ENPH) develops and manufactures solar micro-inverters, energy storage batteries and electric vehicle charging stations primarily for residential customers. Basically, the battery storage system is likely to appeal to consumers who live in regions that are hard hit by outages. Unsurprisingly, the ENPH has gained nearly 73% over the past year.

Still, contrarian investors may want to target ENPH on their wish list of renewable energy stocks. On the one hand, the recent tremors sent shares of Enphase down 17%, likely due to profit taking. Second, despite the latest splatter of red ink, ENPH is still garnering support from Wall Street. Currently, experts view the company as a strong consensus buy. Moreover, their average price target implies nearly 55% upside potential.

According to Gurufocus.com’s proprietary calculations for fair market value, ENPH is significantly undervalued. Objectively, the underlying company is showing excellent sales growth and strong profit margins, making it an attractive candidate for renewable energy stocks.

Brookfield Renewable Partners (BEP)

Man holding stacks of money. Millionaire.

Source: Epic Cure / Shutterstock

A limited partnership listed on the stock exchange, Brookfield Renewable Partners (NYSE:BEP) owns and operates renewable energy assets. These assets consist of hydroelectric power stations, wind farms, solar facilities, as well as energy storage facilities. Unlike other renewable energy stocks, BEP underperformed the benchmark S&P500 index over the previous year, slipping almost 10%.

Nonetheless, in the year so far, Brookfield looks set to redeem itself, with its shares gaining nearly 13% in equity value. Significantly, among six analysts covering, BEP is seen as a strong consensus buy. The only retainer is a retainer rating. Additionally, their average price target for Brookfield shares is $34.55, implying an 18% upside potential. According to Gurufocus.com’s proprietary FMV calculations, Brookfield is slightly undervalued. Objectively, BEP presents a discount based on its price/operating cash flow ratio of 6.1 times (lower than 61% of the competition).

Currently, Brookfield offers a forward yield of 4.37%. However, note that ownership of BEP requires the filing of Schedule K-1 forms.

Clearway Energy (CWEN)

A photo of wind turbines with green hills and the horizon in the background.

Source: Shutterstock

Based in New Jersey, Clearway Energy (NYSE:CWEN) is one of the largest owners of renewable energy in the United States with more than 5,500 net megawatts (MW) of wind and solar generation projects installed, according to its website. In addition, the company’s over 8,000 MW net assets also include approximately 2,500 MW net of environmentally friendly and highly efficient natural gas generation facilities.

To be fair, CWEN got off to a relatively slow start compared to other renewable energy stocks. Last year, it was a hair below parity. Year-to-date, CWEN has gained a modest 3.5%. Still, analysts like the underlying business, calling it a moderate buy by consensus. Additionally, their average price target of $37.50 implies over 13% upside potential.

Additionally, Clearway will likely attract investors looking for discounted renewable energy stocks. Currently, the market values ​​CWEN at a multiple of 6.9. In contrast, the industry median is 19 times. As a bonus, Clearway is posting a forward yield of 4.43%, above the average utility sector yield of 3.75%.

Rod (ROD)

blue graphic of person's face composed of lines of binary code and stock PGY chip.

Source: shutterstock.com/Peshkova

Considered a world-leading provider of artificial intelligence-based clean energy solutions and services, Stem (NYSE:STEM) deserves consideration among opponents. Thanks to its AI protocol, Stem enables simplified and efficient energy management, facilitating the resilience of energy networks. Additionally, it provides energy storage systems, providing energy when it is needed most.

To be fair, Stem ranks among the most agitated names for renewable energy stocks. This is not surprising given that STEM entered the public ecosystem via a merger with a special purpose acquisition company (SPAC). In short, SPACs do not have a positive reputation. Nonetheless, Wall Street analysts have given STEM a strong consensus (and unanimous) Buy rating. Moreover, their average price target stands at $16.25, implying nearly 66% upside potential.

Nonetheless, potential investors should be aware that Stem presents an ambitious narrative. At best, Stem has an average track record. Moreover, it is always unprofitable. However, its strong earnings growth could make it an attractive rally among speculative renewable energy stocks.

Ormat Technologies (ORA)

A geothermal power plant is operating, with a large lake visible in the foreground and mountainous terrain visible in the background.

Source: Kirill Chernyshev / Shutterstock.com

Although it is a risky idea, Ormat Technologies (NYSE:ORA) represents a compelling idea among renewable energy stocks. More specifically, Ormat specializes in geothermal energy. According to the Office of Energy Efficiency and Renewable Energy, “[g]Geothermal resources are reservoirs of hot water that exist or are created by humans at varying temperatures and depths below the Earth’s surface.

Moreover, to clarify received ideas, geothermal energy represents a real renewable resource. Basically, the heat from the Earth’s interior is constantly being replenished. Additionally, facilities that take advantage of this power source “generate electricity consistently and can operate essentially 24/7 regardless of weather conditions.”

In terms of analyst support, potential investors need to be fearless. Currently, market experts rate Ormat as a consensus take – three takes and nothing else. Nonetheless, investors may be encouraged by the gradual growth in sales following the coronavirus pandemic. Thus, it is worth checking out for anyone wishing to bet on renewable energy stocks.

Eco-wave power (WAVE)

A photograph of the ocean.

Source: Manu Galdamez/ShutterStock.com

By far the riskiest name on this list of renewable energy stocks, the Swedish company Power of ecological waves (NASDAQ:VAGUE) represents a specialist in wave energy. Basically, these companies attempt to take advantage of the kinetic energy inherent in the natural movement of water masses. In addition, these technologies offer a pleasant way to make renewable energies. In other words, physical infrastructure is largely out of sight, out of mind.

Specifically, Eco Wave has developed an innovative technology that facilitates the operation of a grid-connected wave energy network. Additionally, what sets Eco Wave apart from other wave energy competitors is that the former incorporates infrastructure either near shore or onshore. Part of the decision-making process here focuses on cost reduction and greater reliability. Yet, in many ways, wave energy remains a pioneering technology. For example, high costs have driven similar efforts. And let’s face it, WAVE isn’t exactly killing it, losing over 32% over the previous year. But if you want to get into renewable energy stocks, this might be it.

As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided critical and unique insights to the investment markets, as well as various other industries including law, construction management and healthcare.


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