Alternative energy is not the fledgling industry it used to be. The sector has produced some global leaders that are helping to make alternative energy a viable energy choice. Investors have a number of stocks to choose from that are showing promise and offer genuine growth opportunities.
The technology associated with alternative energy is rapidly changing, with new developments appearing on a regular basis. This helps drive the sector in a positive direction, but it also creates much volatility as companies have to adjust to new ways of creating energy. It is easy for a company to get left behind in an environment of constant innovation.
The following four companies are world leaders in alternative energy. Despite the volatility in this sector, these firms offer investors a degree of stability and are positioned to take advantage of the growing worldwide demand for sustainable energy.
We selected these companies based on a history of positive growth or a market cap above $2 billion. All information and figures are current as of September 28, 2018.
Atlantica Yield PLC
Atlantica does own conventional power assets, but it also owns and manages renewable energy. It has 1,442 megawatts of renewable energy properties that include solar power and wind plants. The company is based in the United Kingdom but has plants throughout North America, Spain, Algeria, South Africa and South America.
The stock has seesawed in a narrow range over the last 12 months, forming a base. It's currently nearly unchanged over the 1-year period and stands at $20.58 as of September 28, 2018.
- Avg. Volume: 216,563
- Market Cap: $2.062 billion
- YTD Return: -2.65%
- PE Ratio (TTM): N/A
- EPS (TTM): -0.57
- Dividend & Yield: 1.36 (6.65%)
Vestas Wind Systems A/S
Vestas makes its living from wind power. It sells wind turbines across the globe, and has captured the biggest market share of turbines in the world. It also sells complete power plants as well as individual wind turbines. In addition, the company services its products.
This is no newcomer to the field. Vestas dates back to 1898 and is headquartered in Denmark. It also operates in Germany, Romania, the U.K., India, China, the United States, Sweden, Australia, and Norway. The number of employees exceeds 21,000. The stock currently stands at $23.39, as of September 28, 2018.
- Avg. Volume: 37,441
- Market Cap: $13.193 billion
- YTD Return: 0.02%
- PE Ratio (TTM): 14.38
- EPS (TTM): 1.56
- Dividend & Yield: 0.51 (2.73%)
First Solar Inc.
First Solar is an international alternative energy firm specializing in solar energy. It manufactures solar modules for the solar industry, and it develops complete solar projects for utilities, power companies, and commercial entities. The company also provides engineering, construction, and service for its solar systems.
First Solar is known for creating low-cost solar converters that make electricity more efficient to produce. Management has set an aggressive goal of building the company’s energy output threefold.
After breaking out and hitting new highs just below $70 in late April, the stock has been on the decline, closing at $48.42 on September 28, 2018. The stock has slid in tune with the falling demand and prices for solar panels. This stock is for investors who trust the larger trend and think solar can reasonably challenge traditional energy companies.
- Avg. Volume: 1,361,796
- Market Cap: $5.075 billion
- YTD Return: -31.25%
- PE Ratio (TTM): N/A
- EPS (TTM): -1.84
- Dividend & Yield: N/A (N/A)
Along with its motors, generators, and Robotics, ABB provides solar conversion, wind conversion, and electric vehicle quick-charge systems. ABB works with railroads, utilities, and transportation companies, as well as industrial plants.
Investors who want some exposure to alternative energy with a foundation in traditional electrical services may find ABB attractive. It operates in 100 countries and is known as a top electrical engineering firm. The company specializes in connecting alternative energy to the electrical grid. After rallying through late January of 2018, the stock has lost some ground. Investors will need to keep an eye on it to see if current prices represent a buying opportunity. The stock closed at $22.84 on September 28, 2018.
- Avg. Volume: 2,116,888
- Market Cap: $49.908 billion
- YTD Return: -14.35%
- PE Ratio (TTM): 23.13
- EPS (TTM): 1.03
- Dividend & Yield: 0.83 (3.47%)
The Bottom Line
The alternative energy firms on this list are in the process of taking alternative mainstream. These are substantial companies with solid track records. Investors should be aware of the increased volatility that comes with investing in this sector, but they should also know that alternative energy has the potential to produce strong returns over time.