The world is switching from carbon-based fossil fuels to cleaner alternative energy sources because of climate change concerns. Green energy stocks will play an integral role in this energy revolution. Here’s a look at the top three renewable energy stocks.
The Top 3 Renewable Energy Stocks
Numerous businesses concentrate on renewable energy, putting them in a fantastic position to profit from this megatrend in investment. However, the best alternative energy stocks to purchase are a select few energy firms that stand out above their rivals. These premier green energy businesses are:
NextEra Energy (NYSE: NEE)
NextEra Energy is the largest solar and wind energy producer worldwide. Power is sold through PPAs to end consumers and other utilities.
It generated an overall return of nearly 700% over the previous ten years. Since 2005, NextEra has increased its adjusted profits per share at an 8.7% compound annual rate while increasing its dividend at a 9.6% yearly pace. The Dividend Aristocrat title belongs to NextEra since it has grown its dividend for more than 25 years. The market capital makes it the best clean energy stock at present.
By 2023, the business expects earnings to expand by 6 to 8% annually. With one of the strongest balance sheets in the utility business, it should be able to offer dividend increases of 10% until at least 2022.
Brookfield Renewable (NYSE: BEP) (NYSE: BEPC)
A global pioneer in renewable energy is Brookfield Renewable. It is one of the major hydroelectric power producers, accounting for more than 62% of its portfolio in 2021. The firm sells most of its power through long-term PPAs that produce consistent cash flow.
The firm has had an annualized total return of 20% since its start. Since 2012, dividend payments have grown at a compound annual rate of 6%, thanks to Brookfield’s above 10% yearly profit compound growth over the previous ten years.
By 2025, Brookfield anticipates up to 20% annual growth. This should allow the firm to retain its excellent balance sheet while increasing its dividend by 5 to 9% annually, making it one of the best green energy stocks.
SolarEdge Technologies (NASDAQ: SEDG)
SolarEdge Technologies manufactures and develops an optimized inverter system. Since its IPO, the firm has generated a roughly 50% annualized total return. Its quick rise from the 10th-largest supplier in 2014 to the market leader in producing solar inverters in 2020 drives that increase.
According to one prediction, solar energy will increase from 11% of the world’s installed power capacity in 2019 to 38% by 2050. With more than $500M in net cash in 2021, it also has a strong balance sheet to aid in financing its expansion.
Final Thoughts
The renewable energy revolution has been sparked mainly by climate change and socially conscious investing. In the coming decades, such elements will fuel trillions of dollars in investment in renewable energy. The highest profits for investors should come from the top renewable energy stocks.
