Nothing changes broader behaviors more so than a sharp paradigm shift, which is exactly what is bolstering the best clean energy stocks to buy now. With geopolitical tensions skyrocketing along with climate change dynamics that can’t be ignored, the international community is scrambling to make necessary adjustments. Therefore, investors who get in at current discounted rates might do well over the long run.
Obviously, the biggest catalyst for the best clean energy stocks to buy is Russia’s invasion of Ukraine. Not only is this incident an assault on Ukraine’s freedom and sovereignty, the Kremlin has rendered its nation as an unreliable economic partner. Thus, immediately following the attack, many European policymakers requested a fast tracking of renewable energy initiatives.
Another powerful tailwind for the best clean energy stocks to buy is the growing realization of climate change and its deleterious effects. No longer are people viewing the world through rose-colored glasses. Better yet, the technologies undergirding clean renewables are fostering efficiencies across multiple applications, thus making the sector attractive for investors.
In other words, going green isn’t about tree hugging or other pejorative descriptions. Instead, it’s a viable business opportunity, thus supporting the below best clean energy stocks to buy now.
|Brookfield Renewable Partners
NextEra Energy (NEE)
One of the largest companies in the U.S. committed to green infrastructures, NextEra Energy (NYSE:NEE) easily commands interest as a candidate for best clean energy stocks to buy. Per its website, NextEra has infrastructural investment plans for 2022 totaling between $50 billion to $55 billion. As well, the company features 45,500 megawatts (MW) of net generating capacity.
Overall, NEE deserves attention as one of the best clean energy stocks to buy because of its balanced profile. Leveraging a market capitalization of $153 billion, NextEra is presently considered fairly valued based on a basket of valuation metrics. A particular highlight is the company’s gross margin, which at 45% is substantially higher than the industry median of 29%.
Admittedly, NEE has encountered trouble this year, down 16% against its January opener. Certainly, its less-than-ideal performance for the first quarter of 2022 didn’t help. Nevertheless, against a longer-term framework, NextEra is one of the best clean energy stocks to buy based on its sheer scale.
Enphase Energy (ENPH)
Among the challenges of renewable energy sources is their intermittency. Since the sun eventually sets and the wind stops blowing, proponents of renewables must find ways of storing energy during these down periods. That’s where Enphase Energy (NASDAQ:ENPH) enters the frame, specifically with its battery storage system that foster resilience during compromising events such as blackouts.
Along with its residential services, Enphase delivers a range of solutions for commercial enterprises, facilitating the equivalent magnitude of energy resilience at scale. Furthermore, Enphase has installed over 45 million microinverters — systems that convert direct current into alternating current — on over two million homes and businesses.
Fundamentally, ENPH attracts as one of the best clean energy stocks to buy for its financial stability. For instance, its Altman Z-score (a measure of bankruptcy risk) is well into the safe zone. In addition, Enphase is fairly valued against a range of valuation metrics.
Finally, it’s worth noting that the company posted $441 million in sales for Q1 2022, up 46% against the year-ago quarter.
Brookfield Renewable Partners (BEP)
As one of the world’s largest publicly traded, pure-play renewable power platforms, Brookfield Renewable Partners (NYSE:BEP) is often cited as one of the best clean energy stocks to buy. The company’s portfolio encompasses hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia.
In April of this year, Brookfield formed a strategic partnership with SSE (OTCMKTS:SSEZY), a multinational energy firm headquartered in Perth, Scotland. Under the deal, the two enterprises will participate in Dutch offshore wind tenders. Both companies view the Netherlands as a leading market for offshore wind development, thus potentially cementing their place in a high-growth subsegment.
Another factor bolstering BEP as one of the best clean energy stocks to buy is its solid financials. In particular, Brookfield has reasonably robust profitability metrics. Its operating margin is 24%, far better than the industry median of 13.4%. Currently, Brookfield stock is fairly valued.
Lastly, I’d be remiss not to point out that BEP enjoyed a strong outing for Q1 2022, with its revenue tally of $1.14 billion up over 11% against the year-ago level.
Though not the typical name you might find discussed in the energy sector, semiconductor specialist Wolfspeed (NYSE:WOLF) is nevertheless a worthy candidate among the best clean energy stocks to buy. Perhaps best known for providing advanced semiconductor solutions for electric vehicle components and communications infrastructures, Wolfspeed also plays an integral role in renewables.
While platforms like wind and solar grab all the headlines, a constant challenge with next-generation power sources is efficiency. As Wolfspeed mentions on its website, energy is limited, necessitating best practices on its utilization. Therefore, the company’s products and systems are designed around the focus to make sure every kilowatt hour is expended with extreme efficiency. Not only does this ethos contribute to superior output, it also cuts down on lifetime costs for utility firms.
To be fair, WOLF is on the riskier side of the best energy stocks to buy, having shed 41% on a year-to-date basis. Still, this could be a discounted opportunity considering the relevance of its business. As well, it posted revenue of $188 million in Q1 of this year, up 37% against Q1 2021’s result.
Ormat Technologies (ORA)
One of the most scientifically intriguing candidates among the best clean energy stocks to buy, Ormat Technologies (NYSE:ORA) specializes in extracting power from geothermal energy. As the U.S. Energy Information Administration explains, geothermal energy is a renewable energy source because it’s derived from heat continuously produced inside the earth.
While every source has its set of pros and cons, one of the advantages of geothermal is its huge potential. Through ongoing research and development, it’s conceivable that the number of exploitable geothermal resources will increase. In addition, this avenue is reliable. Unlike the intermittency of wind and solar, geothermal plants facilitate a much more predictable power output flow.
Better yet, Ormat is holding its own on the financial front. For example, the company features solid profitability metrics, with a highlight being its 24.4% operating margin. In contrast, the industry median is 13.4%.
For its latest earnings disclosure of Q1 2022, Ormat posted top-line sales of $183.7 million, representing a 10% year-over-year increase. Net income came in at $18.4 million, up 20% YOY.
Venturing out into the speculative section for the best clean energy stocks to buy, Ørsted (OTCMKTS:DNNGY) presents an intriguing canvas for the adventurous investor. A multinational power company based in Fredericia, Denmark, Ørsted is its home nation’s largest energy firm. Further, it’s the world’s largest developer of offshore wind power by amount of built offshore wind farms.
Per its website, Ørsted now has over 1,000 onshore wind turbines around the world, including a growing portfolio in the U.S., which presently has a total operational capacity of 2.3 gigawatts (GW). In addition, the company has 500 megawatts (MW) of total capacity under construction in Texas and Nebraska. Therefore, Ørsted is well on its way to comprehensively dominating the wind turbine industry.
To be fair, DNNGY stock has been struggling since hitting a peak in early January of 2021. Despite the downward slide, the volatility has conspicuously died down. Speculators might then be eyeballing a viable entry point in this clean energy powerhouse.
Plug Power (PLUG)
Emblematic of the wild ride of the new normal, at the start of 2020, hydrogen fuel-cell specialist Plug Power (NASDAQ:PLUG) was trading hands in low single-digit territory. At its peak in January of last year, PLUG appeared to be on a parabolic trajectory to triple digits. However, by the next month, the floor was pulled underneath PLUG, leading to a painful erosion of market value.
Still, for the speculator, the company might offer one more ride to the top. As the Wall Street Journal detailed not too long ago, Plug Power is banking heavily on green-hydrogen production, or hydrogen that’s manufactured “using renewable electricity to power an electrolyzer that splits water into hydrogen and oxygen.”
According to management, the time for hydrogen integration may be upon us, particularly as government and corporate entities promise to cut greenhouse gas emissions. Still, the challenge for PLUG has been converting a compelling narrative into meaningful substance. The company has yet to turn a full year profit.
Still, with Plug’s renewed focus, it could turn out to be one of the best clean energy stocks to buy.
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.