Top Solar Stocks for Q3 2022

DQ is top for value and growth and JKS is top for momentum

The solar energy industry has grown rapidly even as fossil fuels remain the dominant source of global energy use. Solar industry companies come from multiple sectors, including utilities, industrial, and energy, and include popular stocks such as SolarEdge Technologies (SEDG) and Sunrun Inc. (RUN). While some large utilities and energy companies have solar and renewable energy divisions, these businesses typically are not included in the industry’s listings because the parent’s primary focus is not solar.

Solar stocks, represented by an exchange-traded fund (ETF)—the Invesco Solar ETF (TAN)—have slightly outperformed the broader market over the past year. TAN has provided a total return of -2.5% over the last 12 months, just ahead of the Russell 1000’s total return of -2.8%. These market performance numbers and all statistics in the tables below are as of June 3, 2022.

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

Best Value Solar Stocks

These are the solar stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.

Best Value Solar Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/S Ratio
Daqo New Energy Corp. (DQ) 55.08 4.1 3.5
Canadian Solar Inc. (CSIQ) 33.10 2.1 26.9
Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI) 38.60 3.3 28.0

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 announced its financial results for Q1 2022 on April 21. Net income attributable to shareholders grew more than six-fold as revenues quintupled year-over-year (YOY). A sharp increase in polysilicon sales volume helped to fuel growth.
  • Canadian Solar Inc.: Canadian Solar Inc. is a Canada-based solar product developer that designs, builds, and sells modules for residential, commercial, and industrial customers. The company's products include solar modules, inverters, and system kits.
  • Hannon Armstrong Sustainable Infrastructure Capital Inc.: Hannon Armstrong Sustainable Infrastructure Capital is a real estate investment trust (REIT) that invests in sustainable infrastructure. It focuses on investments in real estate used for climate solutions, renewable energy, and related projects. On May 3, Hannon Armstrong announced a quarterly cash dividend of $0.375 per share of common stock. The dividend is payable on July 12 to shareholders as of July 5, 2022.

Fastest Growing Solar Stocks

These are the top solar 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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Solar Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Daqo New Energy Corp. (DQ) 55.08 4.1 547.2 399.9
Enphase Energy Inc. (ENPH) 196.34 26.5 68.2 46.2
SolarEdge Technologies Inc. (SEDG) 298.34 16.5 9.1 61.6

Source: YCharts

  • Daqo New Energy Corp.: See above for company description.
  • Enphase Energy Inc.: Enphase Energy is a global energy technology company that brings solar, batteries, and software together in one complete package. It supplies microinverter-based, solar-plus-storage systems. The company reported Q1 2022 results on April 26. Net income climbed by 63.5% on solid revenue gains YOY. Strong growth in shipments of Enphase's IQ8 Microinverters and IQ Batteries contributed to this improvement.
  • SolarEdge Technologies Inc.: SolarEdge Technologies is an Israel-based company that builds and distributes equipment and technology for photovoltaic arrays. The company provides optimization services as well as monitoring solutions for photovoltaic systems. On May 19, SolarEdge announced that it had completed a global patent license agreement with China-based telecommunications and technology company Huawei Technologies Co. Ltd. Per the agreement, a cross license will cover patents related to each company's products. The agreement also settles all patent-related litigation between the companies. The deal ends lawsuits between SolarEdge and Huawei that were pending in China and Germany.

Solar Stocks with the Most Momentum

These are the solar stocks that had the highest total return over the last 12 months.

Solar Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
JinkoSolar Holding Co. Ltd. (JKS) 62.14 3.0 54.9
Enphase Energy Inc. (ENPH) 196.34 26.5 46.4
SolarEdge Technologies Inc. (SEDG) 298.34 16.5 25.1
Russell 1000 N/A N/A -2.8
Invesco Solar ETF (TAN) N/A N/A -2.5

Source: YCharts

  • JinkoSolar Holding Co. Ltd.: JinkoSolar is a Chinese holding company that produces solar cells, modules and other materials related to solar energy. The company serves customers in China, the U.S., Europe, the Middle East, and South America. On May 27, JinkoSolar announced that its subsidiary Jinko Solar Co. Ltd. signed a distribution agreement with Aldo Solar, the largest solar energy distributor in Brazil. Under the agreement, Aldo Solar will distribute Jinko's N-type Tiger Neo photovoltaic modules, which are high-efficiency solar products.
  • Enphase Energy Inc.: See company description above.
  • SolarEdge Technologies Inc.: See company description above.

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 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 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.

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  1. YCharts. “Financial Data.”

  2. Daqo New Energy Corp. "Daqo New Energy Announces Unaudited First Quarter 2022 Results."

  3. Hannon Armstrong Sustainable Infrastructure Capital Inc. "Hannon Armstrong Announces First Quarter 2022 Results and Declares Dividend."

  4. Enphase Energy Inc. "Enphase Energy Reports Financial Results for the First Quarter of 2022," Pages 1-2.

  5. SolarEdge Technologies Inc. "SolarEdge and Huawei Sign Global Patent License Agreement, Settle Litigation."

  6. JinkoSolar Holding Co. Ltd. "JinkoSolar Signs Agreement with Aldo Solar for the Distribution of 600 MW N-type Tiger Neo Modules."

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