With concerns about climate change and the state of the environment continuing to draw headlines, there is no doubt that the markets are also paying attention to clean and renewable energy resources. As oil prices rise from their recent lows, traditional energy companies will no doubt dominate the energy sector, but alternative energy is here to stay. The alternative energy companies on this list have the potential to make investors some money this year.

The stock charts on each of these companies show positive developments that could create upward momentum in 2018. All figures are current as of March 10, 2018. (See also: Why You Should Invest in Green Energy Right Now.)

NRG Yield, Inc. (NYLD)

NRG Yield is not a pure alternative energy play, but it does own and operate renewable energy assets. The company was founded in 2012. This stock began forming an upward price channel in February 2017. Despite a downtick in the price at the end of November and into December, shares ended 2017 up nearly 19% for the year. While the stock saw sharp declines in February 2018, the company has consistently beat earnings estimates in recent quarters. Based in Princeton, New Jersey, NRG Yield is a subsidiary of NRG Energy, Inc. (NRG).

Pattern Energy Group Inc. (PEGI)

This San Francisco-based company owns wind energy projects. It makes its living selling energy to local utility companies. Projects are in the United States, Canada and Chile. The stock was rising throughout the early part of 2017, but it began to see declines starting in September. While the stock price has been trending downward over the past few months, at current levels, Pattern Energy Group offers an attractive dividend yield of 9.54%. (For more, see: Clean or Green Technology Investing.)

  • Average Volume: 1,051,386
  • Market Cap: $1.759 billion
  • P/E Ratio (TTM): 560.62
  • EPS (TTM): $0.03
  • Dividend and Yield: $1.69 (9.54%)

Atlantica Yield PLC (AY)

Atlantica owns renewable energy assets, generating power through solar and wind technology. Revenues have shown solid gains for four straight years, and operating income has grown dramatically during that period. The 50-day moving average crossed above the 200-day moving average last year, which is called a "golden cross" and is considered bullish by investors. While the price action has been volatile, the stock has consistently found support at around $19, and it broke out into October 2017. After testing the $25 level in mid-November, the stock ticked downward into the new year to current levels at around $19.50. Atlantica's dividend yield of 3.68% could be appealing to income investors. (See also: Atlantica Yield Posts Narrower-than-Expected Q1 Loss.)

  • Average Volume: 447,760
  • Market Cap: $1.961 billion
  • P/E Ratio (TTM): 69.89
  • EPS (TTM): $0.28
  • Dividend and Yield: $1.04 (3.68%)

Covanta Holding Corporation (CVA)

Covanta Holding provides waste services to cities in the United States and Canada. The company has developed assets that convert waste to energy. Covanta owns 45 plants that are involved in converting waste, and the company sells metal that is a byproduct of the waste-conversion process. Daily volatility for this stock can be high, so this is one to buy only for those who are willing to ride out some dramatic moves in the stock price. Similar to several other stocks on this list, Covanta may be enticing to those investors seeking dividend yield.

  • Average Volume: 974,806
  • Market Cap: $1.918 billion
  • P/E Ratio (TTM): 33.79
  • EPS (TTM): $0.44
  • Dividend and Yield: $1.00 (6.76%)

The Bottom Line

Alternative energy is mainstream enough now that investors can find companies that are extremely viable. All the companies on our list have a track record of securing contracts for their products and services. Nevertheless, the companies are relatively small compared with the giants of the energy sector, so they are subject to being nudged out of the competition. Owning alternative energy stocks means staying abreast of news in the field. (For more on alternative energy, check out: Top 5 Alternative Energy ETFs.)

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