The wind energy industry is comprised of both a small number of pure-play companies and also big corporations that operate their wind energy business as a division or a subsidiary. One example of the latter is General Electric Co.'s (GE) Renewable Energy division. The wind industry has potential for significant growth, with the International Energy Agency reporting in November 2019 that offshore wind sources ultimately could produce 18 times the global demand for electricity.
Wind stocks, as represented by the First Trust Global Wind Energy ETF (FAN), have dramatically outperformed the broader market. FAN has provided a total return of 31.0% over the past 12 months, well above the Russell 1000's total return of 15.2%, as of September 14, 2020. All statistics in the tables below are as of September 15.
Here are the top 3 wind stocks with the best value, fastest growth, and the most momentum.
Best Value Wind Stocks
These are the wind 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 Wind Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Northland Power Inc. (NPI.TO)||CA$35.64||CA$7.2||18.9|
|lberdrola SA (IBDRY)||50.12||77.4||35.6|
|NextEra Energy Inc. (NEE)||281.92||138.0||38.9|
- Northland Power Inc.: Northland Power is a Canada-based diversified energy company with assets in wind, natural gas, and solar. The company reported a 2.6% decline in net income despite a 24.8% increase in sales in Q2 2020, which ended June 30, 2020. Northland Power indicated that the lower net income was due to increases in certain operating and financing costs, a foreign exchange loss, and a higher tax expense.
- lberdrola SA: Iberdrola is a Spain-based multinational electric utility company that generates and distributes electricity throughout Europe, the U.S., and Latin America. The company specializes in clean energy, especially wind power. Iberdrola announced in early July that it had purchased the French renewable energy company Aalto Power for €100 million (USD $119 million).
- NextEra Energy Inc.: NextEra is an electric power and energy infrastructure company that generates electricity through wind, solar, and natural gas. Through its subsidiaries, the company also operates multiple commercial nuclear power units. NextEra reported a 0.9% decline in net income as operating revenue fell 15.4% in Q2 2020, which ended June 30, 2020. The company said that COVID-19 was posing challenges to its operations, but that the company continued to perform well.
Wind Stocks With the Most Profit Growth or Least Profit Decline
These are the wind stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Wind Stocks With the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|NextEra Energy Inc. (NEE)||281.92||138.0||1.2|
|Northland Power Inc. (NPI.TO)||CA$35.64||CA$7.2||-7.1|
|TransAlta Renewables Inc. (RNW.TO)||CA$15.61||CA$4.2||-8.3|
- NextEra Energy Inc.: See above for company description.
- Northland Power Inc.: See above for company description.
- TransAlta Renewables Inc.: TransAlta Renewables is a Canada-based renewable power generation company. It invests in renewable power generation assets including wind and hydroelectric plants.
Wind Stocks with the Most Momentum
These are the wind stocks that had the highest total return over the last 12 months.
|Wind Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Vestas Wind Systems A/S (VWDRY)||50.07||29.5||86.1|
|Siemens Gamesa Renewable Energy SA (GCTAY)||5.16||17.5||72.5|
|Boralex Inc. (BLX.TO)||CA$33.90||CA$3.5||57.5|
|First Trust Global Wind Energy ETF (FAN)||N/A||N/A||31.0|
- Vestas Wind Systems A/S: Vestas Wind Systems is a Denmark-based wind energy company that designs, manufactures, and installs wind turbines used to generate electricity.
- Siemens Gamesa Renewable Energy SA: Siemens Gamesa is a Spain-based manufacturer of renewable energy equipment. The company offers wind turbines, turbine gearboxes, offgrid, and other related equipment, as well as maintenance and reconditioning services. Siemens Gamesa announced at the end of July the appointment of Beatriz Puente to the role of Chief Financial Officer (CFO). Lars Bondo Krogsgaard and Juan Gutiérrez were appointed as CEOs of the Onshore and Service business units, respectively.
- Boralex Inc.: Boralex is a Canada-based energy company focused on renewable power sources including wind, thermal, solar, and hydroelectric. The firm manages facilities in Canada, parts of the U.S., and France. Boralex reported a net loss of CA$6 million (USD $4.6 million) in Q2 2020 ended June 30, 2020, compared to a net loss of CA$15 million (USD $11.4 million) in the year-ago quarter. Revenue growth was flat for the quarter.
International Energy Agency. "Offshore Wind Outlook 2019." Accessed Sep. 15, 2020.
YCharts. "Financial Data." Accessed Sep. 15, 2020.
Northland Power Inc. "Northland Power Reports Second Quarter 2020 Results." Accessed Sep. 15, 2020.
Iberdrola SA. "Iberdrola seals the purchase of the French renewables company Aalto Power for €100m." Accessed Sep. 15, 2020.
NextEra Energy Inc. "NextEra Energy reports second-quarter 2020 financial results," Pages 7 & 8. Accessed Sep. 15, 2020.
NextEra Energy Inc. "NextEra Energy reports second-quarter 2020 financial results," Page 1. Accessed Sep. 15, 2020.
Siemens Gamesa Renewable Energy SA. "Siemens Gamesa appoints Beatriz Puente as Chief Financial Officer and names new CEOs for two Business Units," Page 1. Accessed Sep. 15, 2020.
Boralex Inc. "Boralex increases its EBITDA(A) and pipeline of projects in the second quarter," Page 2. Accessed Sep. 15, 2020.