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 (CIG), and First Solar Inc. (FSLR).
Alternative energy stocks, as represented by the iShares Global Clean Energy ETF (ICLN), have dramatically outperformed the broader market, posting a total return of 74.1% compared to the Russell 1000's total return of 34.7% over the past 12 months. These market performance numbers and all statistics in the tables below are as of June 7, 2021.
Here are the top 3 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|
|Algonquin Power & Utilities Corp. (AQN.TO)||CA$18.97||CA$11.6||9.4|
|SunPower Corp. (SPWR)||23.20||4.0||10.8|
|NextEra Energy Partners LP (NEP)||70.46||5.3||14.2|
- Algonquin Power & Utilities Corp.: Algonquin Power & Utilities is a Canada-based company that owns a portfolio of power generation and infrastructure assets in North America. The company's clean energy portfolio includes wind, solar, and hydroelectric generating facilities. Algonquin Power & Utilities announced in early May financial results for Q1 of its 2021 fiscal year (FY), the three-month period ended March 31, 2021. The company posted net earnings of $13.9 million, a significant turnaround from the net loss of $63.8 million reported in the year-ago quarter. Revenue rose 36.5%.
- 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.
- NextEra Energy Partners LP: NextEra Energy Partners owns and manages 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 Next Era Energy Inc. (NEE). NextEra Energy Partners announced in April that it has agreed to acquire a 391-megawatt portfolio of four operating wind assets in California and New Hampshire for $733 million from Brookfield Renewable.
These are the top alternative energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Alternative Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|TransAlta Renewables Inc. (RNW.TO)||CA$19.79||CA$5.3||1,800||14.6%|
|NextEra Energy Inc. (NEE)||72.47||142.2||300.0||-19.2|
|Daqo New Energy Corp. (DQ)||74.49||5.5||149.4||51.7|
- TransAlta Renewables Inc.: TransAlta Renewables is a Canada-based renewable power company. Its portfolio of assets is comprised of operational and renewable power generation facilities, including wind, hydro, and gas.
- NextEra Energy Inc.: NextEra Energy is a provider of sustainable energy generation and distribution services. It generates electricity through wind, solar, and natural gas. It also operates commercial nuclear power units through its subsidiaries. The company announced in April financial results for Q1 FY 2021, which ended March 31, 2021. Net income rose 386.4% despite a 19.2% decline in revenue.
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for sale to manufacturers of solar cells and modules.
These are the alternative energy stocks that had the highest total return over the last 12 months.
|Alternative Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|SunHydrogen Inc. (HYSR)||0.10||0.4||1,500|
|ReneSola Ltd. (SOL)||9.13||0.6||730.0|
|Plug Power Inc. (PLUG)||32.85||18.7||573.2|
|iShares Global Clean Energy ETF (ICLN)||N/A||N/A||74.1|
- SunHydrogen Inc.: SunHydrogen is a solar energy services company that uses sunlight and water to produce renewable hydrogen. The company is developing a method to produce renewable hydrogen that mimics the process of photosynthesis. SunHydrogen announced in early April the appointment of Woosuk Kim to the role of chief operating officer (COO) and board director. Kim is an experienced operations executive with a track record of scaling companies globally.
- ReneSola Ltd.: ReneSola is a China-based global solar power project developer and operator. The company sells electricity generated by its operated solar power plants and offers project financing and construction management services.
- Plug Power Inc.: Plug Power designs, manufactures, and sells hydrogen and fuel cell products used in electric lift trucks and other equipment. The company serves customers in retail, grocery, manufacturing, and food distribution worldwide.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "YCharts." Accessed June 8, 2021.
Algonquin Power & Utilities Corp. "Algonquin Power & Utilities Corp. Announces 2021 First Quarter Financial Results." Accessed June 8, 2021.
NextEra Energy Partners LP. "NextEra Energy Partners, LP announces definitive agreement to acquire an approximately 400-megawatt portfolio of long-term contracted wind assets." Accessed April 19, 2021.
NextEra Energy Inc. "NextEra Energy reports first-quarter 2021 financial results," Pages 6 & 7. Accessed June 8, 2021.
SunHydrogen Inc. "SunHydrogen Names Woosuk Kim as Chief Operating Officer and Board Director." Accessed June 8, 2021.