Investors have been waiting for renewable energy stocks to live up to their potential. After being beaten down in 2023, many investors are hopeful that 2024 will be a better year. No matter where you stand on the viability of renewable energy sources, they will be part of the mix going forward. And with the world fighting to go green, it’s a good long-term bet that renewable energy stocks will be some of the biggest winners.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is one of the top-rated traditional electric and gas utilities.
At the moment, the stock looks attractively undervalued. The stock is down 23% in the last 12 months despite consistently beating analysts’ estimates on both the top and bottom lines. Better, the company pays an attractive dividend that yields 3.30%. In addition, analysts give NextEra Energy a consensus Buy rating with a price target of $70.38 which is 24.2% higher than its closing price on February 22, 2024.
NextEra Energy Partners (NEP)
NextEra Energy Partners (NYSE:NEP) has wind and solar projects throughout the United States and natural gas infrastructure in Pennsylvania.
NEP stock has been beaten down by over 60% in the last 12 months as interest rates soared. And with short interest sitting at just 3%, I would say it’s pretty clear that NEP stock qualifies as being overlooked.
Or is it? This may be a case of ignoring what investors say and watching what they do. NextEra Energy Partners stock enjoys 80% institutional ownership. And those institutions have been doing 28% more buying than selling in the last 12 months. That’s not a huge amount, but it suggests a certain level of conviction.
That conviction is backed up by analysts who give NEP stock a consensus Buy rating with 7 out of 16 analysts giving the stock a Buy or Strong Buy rating.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) is one of the leading innovators in the solar sector. The company’s signature product is its microinverter-based solar-plus-storage systems. These systems help provide power even at times when the sun isn’t shining.
The company has already shipped over 73 million microinverters throughout the world. But the innovation story doesn’t stop there. The company has over 400 patents and is forecasting an addressable market of $23 billion by 2025.
Analysts’ concerns of falling revenue finally emerged in the company’s most recent quarter. However, ENPH stock is up about 20% in the past three months. That could be a reminder that investors are forward-thinking and see revenue and earnings trending in a positive direction.
The company has an aggressive forecast for 87% earnings growth in the next 12 months. That forecast may be achievable, however, since the company has the highest margins in the industry.
Beam Global (BEEM)
Beam Global (NASDAQ:BEEM) is a leader in electric vehicle (EV) charging solutions. Specifically, the company provides off-grid EV charging solutions. The solar-powered EV ARC and Solar Tree stations are solar-powered but transportable. The stations are agnostic as to the type or brand of EV charger inside the station.
This approach gives Beam a huge addressable market that includes the U.S. government as one of its largest customers. With a forecast for strong revenue and earnings growth, the company now expects to be profitable this calendar year. In turn, analysts are raising their price targets for BEEM stock
Investors should remember that this is a small-cap company, and, like many companies of this size, there is elevated short interest on BEEM stock. In this case, 11%. However, that can also be the fuel for a short squeeze if the company meets earnings expectations.
Air Products and Chemicals
Air Products and Chemicals (NYSE:APD) is a key player in the industrial gases sector. This is a large-cap, blue chip stock with a market cap of over 51 billion. That means it’s not necessarily an overlooked stock by traditional measures. However, the stock is down 18% in the last 12 months which makes it right at home with the other stocks on this list.
For renewable energy investors, one of the most important initiatives for the company is its role in the world’s attempt to create a hydrogen economy. Air Products and Chemicals has invested billions of dollars into clean hydrogen production products.
As governments around the world put more emphasis on climate change, hydrogen looks attractive. However, the real payoff may be years to come. Nevertheless, Air Products trades at 18x forward earnings which is a discount to the sector average of 24.8x. Investors also get a company that commits to providing shareholder value with a dividend that has been increasing for 49 consecutive years.
Clearway Energy (CWEN)
Clearway Energy (NYSE:CWEN) has a strong portfolio of renewable energy projects. And, in the midst of rising interest rates, Clearway with the help of its natural gas portfolio managed to grow revenue and earnings year-over-year (YOY). Still, CWEN stock appears to be caught up in the overall negative sentiment toward renewable energy stocks and is down 29% in the last 12 months.
Eventually, that’s the type of performance that turns around a stock’s fortunes. And the stock does come with a rare consensus Strong Buy rating from seven analysts.
In the meantime, however, Clearway – which has just a 4.5 billion market cap – gives investors another reason to own its stock. That would be its dividend which currently yields 7.13%. In addition to the juicy yield, the company is a dividend aristocrat that has increased its dividend in each of the last 28 years.
Algonquin Power & Energy (AQN)
Another one of the top renewable energy stocks to consider is Algonquin Power & Energy (NYSE:AQN). The company has a traditional regulated utility business that provides electric, gas, and water services. It also has a wholly-owned renewable energy subsidiary under the name Liberty.
Like many stocks on this list, AQN stock is down over 20% in the last 12 months. That’s despite solid revenue and earnings performance in the last year. AQN stock also enjoys a substantial level of institutional ownership with buyers outnumbering sellers in the last four quarters.
In the short term, short interest is around 13% which is likely to keep selling pressure on the stock. But the stock pays a robust dividend that has a 7.35% yield.
On the date of publication, Chris Markoch 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.