Top Alternative Energy Stocks for Q4 2022

DQ, CWEN, and ENPH 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 outperformed the broader market, posting a total return of -1.0% compared to the Russell 1000's total return of -7.1% over the past 12 months. These market performance numbers and all statistics in the tables below are as of Aug. 6, 2022.

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

Important

On Aug. 16, 2022, President Biden signed the Inflation Reduction Act (IRA), a piece of legislation that is likely to have a significant impact on the alternative energy industry. The IRA is expected to invest roughly $369 billion in energy security and climate change in the coming years.

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) 64.53 4.8 0.8
Clearway Energy Inc. (CWEN) 37.25 4.4 7.9
Excelerate Energy Inc. (EE) 22.31 0.6 8.6

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. Daqo reported Q2 2022 earnings on August 3. Net income attributable to shareholders and revenue each nearly tripled year-over-year (YOY). Daqo said that a reduction in polysilicon production costs as well as higher manufacturing efficiency and improved economy of scale drove growth.
  • Clearway Energy Inc.: Clearway Energy invests in and owns energy infrastructure and long-term contracted renewable energy assets. Its renewable energy business includes solar and wind power in the U.S. On August 2, the company reported earnings results for Q2 2022. Net income surged more than 35-fold while revenue declined modestly YOY. The significant YOY boost to net income was due primarily to a one-time $1.29 billion gain from the sale of Clearway's Thermal Business.
  • Excelerate Energy Inc.: Excelerate Energy is a liquified natural gas (LNG) company. It offers regasified natural gas delivery, storage, and other related services. It has operations around the globe. On August 5, the company declared an inaugural quarterly dividend for Q2 2022 of $0.025 per share of Class A common stock. The dividend is payable on Sept. 7 to shareholders as of August 19, 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 (%)
Clearway Energy Inc. (CWEN) 37.25 4.4 1,530 -3.2
Algonquin Power & Utilities Corp. (AQN) 14.07 9.5 550.0 15.9
Daqo New Energy Corp. (DQ) 64.53 4.8 170.0 181.9

Source: YCharts

  • Clearway Energy Inc.: See above for company description.
  • Algonquin Power & Utilities Corp.: Algonquin Power & Utilities is the Canada-based parent company of Liberty Utilities. Liberty is a regulated electric, water and gas utility. The company also operates or is building a total of 4 gigawatts (GW) of renewable generation capacity in the form of clean, solar, hydro, renewable wind, and other energy sources. Algonquin serves customers across the U.S. and in Canada. The company reports Q2 2022 earnings results after market close on August 11.
  • 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 (%)
Enphase Energy Inc. (ENPH) 300.91 40.8 64.0
Enviva Inc. (EVA) 70.35 4.7 32.5
Ormat Technologies Inc. (ORA) 90.72 5.1 30.1
Russell 1000 N/A N/A -7.1
iShares Global Clean Energy ETF (ICLN) N/A N/A -1.0

Source: YCharts

  • 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.
  • Enviva Inc.: Enviva collects wood fiber and processes it into wood pellets, which are used for fuel. 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. On July 13, the company announced that it had established the Enviva Heirs Property Fund, dedicated to ending involuntary land loss in the southeast part of the U.S. The fund will provide direct financial support for services and public policy advocacy. The fund will target its efforts in Mississippi and North Carolina first. Enviva committed $250,000 annually toward the fund.
  • Ormat Technologies Inc.: Ormat Technologies is a geothermal and recovered energy power company. It designs, builds, and markets power plants, with a global portfolio located in the U.S., Guatemala, Indonesia, Kenya, Honduras, and elsewhere.

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Article Sources
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  1. YCharts. "Financial Data."

  2. U.S. Senate Democrats. "Summary: The Inflation Reduction Act of 2022," Page 1.

  3. Daqo New Energy Corp. "Daqo New Energy Announces Unaudited Second Quarter 2022 Results."

  4. Clearway Energy Inc. "Clearway Energy, Inc. Reports Second Quarter 2022 Financial Results."

  5. Excelerate Energy Inc. "Excelerate Energy Announces Inaugural Quarterly Cash Dividend."

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

  7. Algonquin Power & Utilities Corp. "Algonquin Power & Utilities Corp. Announces Dates for Second Quarter 2022 Financial Results and Conference Call."

  8. Enviva Inc. "Enviva Launches the Enviva Heirs Property Fund to Combat Involuntary Land Loss in U.S. Southeast."

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