The global economy is progressing towards a sustainable future, making it an excellent time to invest in clean tech stocks ahead of Earth Day.
Sustainability has been a big talking points over the past several years, and it’s a secular trend that will continue benefitting businesses looking to evolve. The tech sector, in particular, has been a dominant force in the stock market for the last few decades, capitalizing on various trends. However, if tech companies embrace sustainability, it represents a powerful combination that will continue to yield incredible long-term gains.
Moreover, clean tech stocks promise robust financial gains and contribute positively to global ecological well-being. That said, here are three clean tech stocks that should appeal to the conscientious investor.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) is a leading solar equipment provider whose stock soared to $336 in December 2022. However, since then, the stock has been on a downtrend, shedding more than 50% of its value last year. The boom in the solar energy sector has faded, which has weighed down Enphase’s business and stock.
Nevertheless, once the headwinds clear out, Enphase is in an excellent position to post strong growth numbers again. It boasts a global presence, and it’s looking to expand its presence in new geographies to add to its already impressive growth trajectory. It’s worth noting that the firm reported a superb operating cash flow of $696.8 million last year, which gives it the impetus to continue pursuing growth initiatives.
Another exciting chapter for the company is its EV charger business, which stands out for its integration with its powerful solar and battery systems, significantly enhancing energy efficiency. Its bidirectional charger supports vehicle-to-home and vehicle-to-grid functionalities, seamlessly aligning with its home energy system and promising robust long-term segment growth.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is a Florida-based cleantech business that operates a dual-faceted business model. Its Florida Power & Light Company subsidiary serves as a traditional utility with sturdy sales growth, while NextEra Energy Resources focuses on renewable energy generation. Its robust two-pronged approach enables the firm to continue supporting its renewable efforts while maintaining reliable utility service. Consequently, it’s become the world’s largest producer of renewable solar energy.
Furthermore, NextEra operates an incredibly resilient business, with gross profit, net income and EBITDA margins comfortably exceeding the 20% mark. Moreover, its return on common equity of 17% trumps the sector median of 8.80% by a substantial margin. Also, its top-line growth has been equally impressive, if not more, boasting a 34% year-over-year (YoY) increase in sales.
More importantly, it has been one of the top dividend stocks for investors, with a 3.22% yield and 28 years of payout growth.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has been one the most talked-about stocks in the past couple of years, due to its groundbreaking AI initiatives, record-high stock price gains and solid financials. However, many overlook its sustainability efforts, which positions it as a tech stock with a deep sense of purpose.
The company set several ambitious sustainability goals to marginalize its environmental footprint. By the end of the current decade, the firm aims to be carbon-negative while planning to power all its operations with 100% renewable energy by 2025. Similarly, it is working towards achieving zero waste certification for its operations, products, and packaging by 2030.
Furthermore, through its Planetary Computer initiative, the company is looking to play a vital role in ecosystem restoration, providing critical data and tools to protect biodiversity. These goals highlight Microsoft’s commitment to spearheading sustainability and leveraging technology for environmental conservation.
On the date of publication, Muslim Farooque 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