There are many reasons why someone might consider investing in green stocks. Investing in green stocks allows individuals to align their investments with their personal values, as they are investing in companies that prioritize ESG (environmental, social, and governance) factors. Additionally, companies that prioritize sustainability and strong ESG practices may be better positioned for long-term success, and may outperform their peers over time.
So-called ‘green’ companies that prioritize ESG factors are proactive and often take steps to mitigate risks that could harm their reputation or bottom line. So, investments in green stocks may ultimately reduce investors’ exposure to certain types of risk. Investing in this manner can be a way for individuals to use their investments to make a positive impact on the world, supporting companies that are working to address environmental and social issues.
Here are seven of the top green stocks I’ve got on my buy list right now.
|AY||Atlantica Sustainable Infrastructure||$26.08|
|NEP||NextEra Energy Partners||$72.08|
Ormat Technologies (ORA)
Ormat Technologies (NYSE:ORA) is a renewable energy company that specializes in geothermal and recovered energy power plants. The company produces electricity from renewable sources, with a portfolio of assets that includes geothermal and recovered energy-based power plants located in the United States, Kenya, Guatemala, Guadeloupe, and Indonesia. Ormat designs, develops, builds, and operates these state-of-the-art plants.
The company derives revenues from both geothermal and solar sources, generating impressive performance in terms of growth from these two segments. We’ll get another look at how Ormat has progressed on the growth front when the company releases its full fiscal year earnings for 2022 on Feb. 22.
I think the company’s upcoming report is likely to be strong. That’s because Ormat produced some very strong figured through the first three quarters of the year. Revenues increased by 12%, with net income and earnings per share increasing by 10.7% and 10.4% during the same period, respectively.
The company expects its U.S. and Indonesian markets to have been particularly strong performers in the fourth quarter. Ormat’s Bottleneck project in California is the largest energy storage project currently under construction, and should be finished construction in 2023, with revenues expected in early 2024.
Atlantica Sustainable Infrastructure (AY)
Atlantica Sustainable Infrastructure (NASDAQ:AY) is a global infrastructure company that invests in renewable energy, energy efficiency, and water infrastructure assets. The firm’s diversified portfolio of assets across North America, Europe, the Middle East, and South America provides investors with exposure to a range of sustainable infrastructure assets and technologies, including solar, wind, and energy storage.
Atlantica Sustainable Infrastructure’s assets generally boast contracted revenue which lends its stock reliability.
That said, the company’s revenues declined in Q3 and during the first nine months of 2022. But revenues from North and South America, along with earnings in both regions, increased. The firm has worked throughout 2022 to reduce debt while simultaneously increasing its liquidity position.
The strongest argument in favor of AY stock relates to its price upside. The company’s shares carry an average target price of $33.67. That is nearly 30% above its current price, and excludes its dividend which yields 6.8%. All told, AY stock can reasonably be expected to appreciate by more than a third in value.
NuScale Power (SMR)
NuScale Power (NYSE:SMR) is a leading developer of advanced small modular nuclear reactor technology. With a focus on designing and commercializing its small modular reactors, NuScale is positioned to play a major role in the global shift towards cleaner and more sustainable energy sources. The company’s technology is designed to be scalable, flexible, and safe, offering utilities and governments a solution for their energy needs that is both economically- and environmentally-sustainable.
The company’s NuScale Power Module is a pressurized water reactor that can generate 77 megawatts of electricity. This reactor is scalable, and forms the basis of its modular nuclear plants that can be configured to customer needs.
NuScale is truly a future-forward company in the sense that its revenues are small, but support for nuclear energy continues to grow. In Q3, NuScale noted that it was making progress toward securing its second committed customer by the end of the year.
That should give readers a sense of where the company is currently. Revenues for Q3 reached $3.2 million, leading to a $49.6 million net loss. That said, the company’s liquidity stood at $268.6 million to end Q3, meaning this is a company which should have significant runway for growth.
Fluence Energy (FLNC)
Fluence Energy (NASDAQ:FLNC) is a provider of energy storage solutions for the electric power grid. The company’s mission is to improve the reliability and resiliency of the electric power grid through the deployment of cutting-edge energy storage technology. Fluence Energy focuses on the development and commercialization of energy storage systems and cloud-based renewable energy software branded as its Fluence IQ Platform.
The company’s Q1 2023 earnings results were strong, sending FLNC stock dramatically higher when released on Feb. 8. Revenues increased by 78% to $310.5 million. However, Fluence Energy still posted a net loss of $37.2 million during the quarter.
One of the biggest positives for the company is that its massive $2.7 billion project backlog indicates strong demand. That backlog increased roughly $500 million quarter-over-quarter.
Meanwhile, the company also increased its fiscal year 2023 total revenue midpoint by $150 million upon releasing earnings.
NextEra Energy Partners (NEP)
NextEra Energy Partners (NYSE:NEP) is a renewable energy company that invests in a range of renewable energy projects, including wind and solar power. The company’s mission is to provide a sustainable and predictable income stream to its investors from its energy assets. The company’s portfolio of wind and solar assets is diverse and geographically dispersed, offering investors exposure to a range of renewable energy sources and markets.
NextEra manages and owns wind and solar projects in the U.S. and natural gas infrastructure assets in Pennsylvania and Texas. NextEra Energy Partners continues to rapidly grow its revenues, selling $966 million of renewable energy last year. That was a substantial increase from the $720 million in renewable energy sales in 2021. Total revenues reached $1.21 billion, which included natural gas revenues.
NEP stock’s low price-earnings ratio suggests it is undervalued, and along with its strong fundamentals, I think NEP stock is one heck of a green stock to consider.
Altus Power (AMPS)
Altus Power (NYSE:AMPS) is another leading renewable energy company that invests in and develops solar and energy storage projects. The company’s mission is to help reduce greenhouse gas emissions by bringing clean and reliable energy to communities across the United States. The firm is focused on the development and financing of utility-scale solar and energy storage projects. It has developed projects from Vermont to Hawaii.
Altus Power solar systems have generated enough power to completely eliminate the CO2 emissions from 400,000 homes in a year, from average sources. At the end of 2022, Altus Power announced that it had agreed to buy an additional 220 megawatts of solar assets for $293 million.
That announcement came weeks after the company released Q3 earnings that showcased 51% revenue growth on a year-over-year basis. The company increased its footprint by 100 megawatts during Q2. That growth, along with the 200 additional megawatt acquisition, provide investors with a growth-first option in this highly-competitive renewable energy sector.
Array Technologies (ARRY)
Array Technologies (NASDAQ:ARRY) is a leading provider of tracking systems for solar power plants. The company sells solar tracking systems designed to optimize energy production for utility-scale solar projects. Array has a strong global presence, with installed capacity in more than 20 countries, including the U.S.
The company’s trackers increase energy production by 25%, while only increasing costs by 11%, according to the company. Array investors benefit from tracker demand which is growing 36% faster than the overall solar market.
And grow the company has, with record-setting revenues of $515 million this past quarter, representing year-over-year growth of 173%. Array expects to record between $1.5 to $1.6 billion in revenues for the 2022 fiscal year, along with an improvement in the company’s net loss of 33%.
This renewable power player has carved out a strong position within an even-faster-growing niche of the already rapidly-growing solar market. That’s why investors should keep ARRY stock on their radar.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.