The alternative energy sector is comprised of companies that engage in the generation, distribution, and sale of renewable and clean energy, as well as related products and services. Examples of alternative energy sources include solar, wind, hydroelectric, and geothermal.
The growing list of names in the sector includes companies like Israel-based SolarEdge Technologies Inc. (SEDG), Brazil-based Companhia Energetica de Minas Gerais (CMIG4), and First Solar Inc. (FSLR).
Alternative energy stocks, as represented by the iShares Global Clean Energy ETF (ICLN), have underperformed the broader market, posting a total return of -5.8% compared to the Russell 1000's total return of 30.9% over the past 12 months. These market performance numbers and all statistics in the tables below are as of Jan. 3, 2022.
Here are the top three alternative energy stocks with the best value, the fastest growth, and the most momentum.
These are the alternative energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Alternative Energy Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Daqo New Energy Corp. (DQ)||41.97||3.1||4.7|
|Renewable Energy Group Inc. (REGI)||44.85||2.3||11.4|
|SunPower Corp. (SPWR)||21.55||3.7||12.6|
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for sale to manufacturers of solar cells and modules. The company also manufactures photovoltaic wafers.
- Renewable Energy Group Inc.: Renewable Energy Group develops and distributes biofuels, renewable chemicals, and related products. It works with businesses across the U.S. The company recently announced that it has acquired Amber Resources LLC along with its affiliates, M.O. Dion & Sons and Amber Petroleum Products. Amber Resources is a full-service distributor of diesel, gasoline, lubricants, and more. The financial terms of the deal were not disclosed.
- SunPower Corp.: SunPower is an integrated solar products, systems, and services company that sells primarily to residential and commercial customers worldwide. The company designs and manufactures solar panels and systems. SunPower announced in early December the launch of SunPower Financial, which was created to make renewable energy affordable for more American homeowners.
These are the top alternative energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth.
The Infrastructure Investment and Jobs Act, signed by President Biden on Nov. 15, 2021, allocates $65 billion to improving America's power infrastructure, which includes the single largest investment in clean energy transmission in the history of the U.S. New transmission lines will be built in order to expand renewable energy.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general.
|Fastest-Growing Alternative Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Daqo New Energy Corp. (DQ)||41.97||3.1||1,310||366.7|
|Advent Technologies Holdings Inc. (ADN)||6.90||0.4||N/A (see company description)||642.6|
|Canadian Solar Inc. (CSIQ)||31.33||1.9||246.7||34.5|
- Daqo New Energy Corp.: See above for company description.
- Advent Technologies Holdings Inc.: Advent Technologies Holdings develops, manufactures, and assembles complete fuel cell systems and critical components for fuel cells in the renewable energy sector. In mid-November, the company announced financial results for Q3 of its 2021 fiscal year (FY), the three-month period ended Sept. 30, 2021. Advent Technologies' net loss widened to $11.3 million from $0.8 million in the year-ago quarter. However, revenue expanded by approximately 643% YOY. An EPS growth rate for the company could not be calculated for the table above because it reported negative EPS in the most recent quarter.
- Canadian Solar Inc.: Canadian Solar is a Canada-based solar power company that designs, manufactures, and sells solar module products that convert sunlight into electricity.
These are the alternative energy stocks that had the highest total return over the past 12 months.
|Alternative Energy Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Ameresco Inc. (AMRC)||82.11||4.2||57.2|
|NextEra Energy Partners LP (NEP)||83.76||6.4||29.0|
|NextEra Energy Inc. (NEE)||91.66||179.9||21.2|
|iShares Global Clean Energy ETF (ICLN)||N/A||N/A||-5.8|
- Ameresco Inc.: Ameresco is a clean technology integrator and renewable energy asset developer, owner, and operator. It offers a range of energy solutions, including improved efficiency, infrastructure upgrades, asset sustainability, and renewable energy. The company announced in early December that it has acquired Plug Smart, an energy services company specializing in the development and implementation of budget-neutral capital improvement projects. The financial terms of the transaction were not disclosed.
- NextEra Energy Partners LP: NextEra Energy Partners owns and manages contracted clean energy projects with stable, long-term cash flows. It owns interests in wind and solar projects as well as natural gas infrastructure assets. The company was formed as a limited partnership by NextEra Energy.
- NextEra Energy Inc.: NextEra Energy is a provider of sustainable energy generation and distribution services. It generates electricity through wind, solar, and natural gas. It also operates commercial nuclear power units through its subsidiaries.
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YCharts. "Financial Data." Accessed Jan. 4, 2022.
Renewable Energy Group Inc. "Renewable Energy Group Acquires California-Based Amber Resources, LLC." Accessed Jan. 5, 2022.
SunPower Corp. "SunPower Launches SunPower Financial to Make Buying and Owning Solar Easier." Accessed Jan. 5, 2022.
The White House. "Fact Sheet: The Bipartisan Infrastructure Deal." Accessed Nov. 29, 2021.
Advent Technologies Holdings Inc. "Advent Technologies Reports Q3 2021 Results," Pages 1 & 2. Accessed Jan. 5, 2022.
Ameresco Inc. "AMERESCO ANNOUNCES ACQUISITION OF PLUG SMART EXPANDING SMART BUILDINGS AND CONTROLS EXPERTISE." Accessed Jan. 5, 2022.