Top Alternative Energy Stocks for Q2 2022

DQ, CSIQ, and EVA are top for value, growth, and momentum, respectively

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., Brazil-based Companhia Energetica de Minas Gerais, and First Solar Inc.

Alternative energy stocks, as represented by the iShares Global Clean Energy ETF (ICLN), have underperformed the broader market, posting a total return of -8.4% compared to the Russell 1000's total return of 6.4% over the past 12 months. These market performance numbers and all statistics in the tables below are as of April 19, 2022.

Here are the top three alternative energy stocks with the best value, the fastest growth, and the most momentum.

Best Value Alternative Energy Stocks

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) 46.74 3.5 4.7
Brookfield Renewable Corp. (BEPC) 39.00 6.7 7.1
Renewable Energy Group Inc. (REGI) 61.25 3.1 14.1

Source: YCharts

  • 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.
  • Brookfield Renewable Corp.: Brookfield Renewable is a Canada-based renewable energy company. Its portfolio of assets includes hydroelectric, wind, solar, and storage facilities in North and South America, Europe, and Asia.
  • Renewable Energy Group Inc.: Renewable Energy Group develops and distributes biofuels, renewable chemicals, and related products. It operates bio-refineries in the U.S. and Europe. The company announced in late February that it agreed to be acquired by Chevron Corp. in an all-cash transaction valued at approximately $3.2 billion. The transaction is expected to close in the second half of 2022.

Fastest Growing Alternative Energy Stocks

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 (%)
Canadian Solar Inc. (CSIQ) 34.33 2.1 254.5 46.9
SolarEdge Technologies Inc. (SEDG) 304.82 16.8 124.2 54.1
Daqo New Energy Corp. (DQ) 46.74 3.5 103.1 59.7

Source: YCharts

  • 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. It also offers battery storage solutions. The company announced in mid-March financial results for Q4 of its 2021 fiscal year (FY), the three-month period that ended Dec. 31, 2021. Net income attributable to the company's shareholders rose 291.3% on revenue growth of 46.9% compared to the year-ago quarter. The company said it was facing a number of near-term challenges, including increasing material costs and logistics costs.
  • SolarEdge Technologies Inc.: SolarEdge Technologies makes intelligent inverter systems used by solar photovoltaic systems. Its inverter systems maximize the power generation of solar photovoltaic systems.
  • Daqo New Energy Corp.: See above for company description.

Alternative Energy Stocks With the Most Momentum

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 (%)
Enviva Inc. (EVA) 89.64 6.0 99.7
JinkoSolar Holding Co. Ltd. (JKS) 56.61 2.7 53.0
Enphase Energy Inc. (ENPH) 195.60 26.2 38.6
Russell 1000 N/A N/A 6.4
iShares Global Clean Energy ETF (ICLN) N/A N/A -8.4

Source: YCharts

  • Enviva Inc.: Enviva collects wood fiber and processes it into wood pellets. It sells most of its wood pellets through long-term, take-or-pay offtake contracts with creditworthy customers in the U.K., the European Union (EU), and Japan. The company announced in early April that it plans to invest about $250 million to build a new production plant in Bond, Miss. The plant is a key part of the company's plan to double its production capacity to approximately 13 million metric tons annually over the next five years.
  • JinkoSolar Holding Co. Ltd.: JinkoSolar is a global solar module manufacturer. It distributes its products and offers solutions and services to a range of international utility, commercial, and residential customers.
  • Enphase Energy Inc.: Enphase Energy is a global energy technology company that supplies microinverter-based, solar-plus-storage systems. It brings together solar generation, storage, and energy management on a single platform. The company announced in mid-March that it has acquired SolarLeadFactory LLC, a provider of high-quality leads to solar installers. Financial terms of the acquisition were not disclosed.

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. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in 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.

Article Sources
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  1. YCharts. "Financial Data."

  2. Renewable Energy Group Inc. "Chevron Announces Agreement to Acquire Renewable Energy Group."

  3. The White House. "Fact Sheet: The Bipartisan Infrastructure Deal."

  4. Canadian Solar Inc. "CANADIAN SOLAR REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS."

  5. Enviva Inc. "Enviva Announces $250 million Investment in New Production Plant for Bond, Mississippi to Serve Growing Demand for Renewable Resources."

  6. Enphase Energy Inc. "Enphase Energy Acquires SolarLeadFactory."

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