Investing in renewable energy stocks presents an opportunity for environmentally conscious investors seeking outsized returns. Companies operating in the solar, wind, and hydrogen sectors are seeing rapid growth as the global economy transitions to cleaner energy sources. The renewable sector was largely impacted by higher interest rates and ongoing supply chain disruptions in 2023. This led to many of the companies in this sector largely underperforming the S&P 500. However, next year could be a much different story for the sector as a whole. With the rapid deployment of energy storage systems and clean technology, the renewable energy sector is set to outperform its fossil fuel counterparts.
Now, let’s discuss the three best renewable energy stocks to buy before 2024!
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) is an American renewable energy company headquartered in Fremont, California. The stock is starting to make a comeback after a broad slowdown in the solar sector in 2023.
So far this year a large portion of renewable energy stocks have seen declines of 50% or more. Supply chain constraints and higher interest rates have affected the company’s revenue, EPS, and guidance for the 2023 fiscal year. However, the market is responding favorably to new Fed policies and a restructuring plan.
On December 18th Enphase announced that it will cut 10% of its workforce. This will include a $16 – $18 million impairment charge, which will be booked in the final quarter of 2023. Investors are beginning to be bullish as they also have interest rate cuts next year as a catalyst for a rebound in the solar and energy storage market.
Linde PLC (LIN)
Linde PLC (NASDAQ:LIN) is a European multinational chemicals company headquartered in the United Kingdom. They are the largest industrial gas company in the world by revenue and market share.
Over the last three years, Linde has seen strong revenue and EPS growth. The company also has a large share in the hydrogen infrastructure market. As a global leader in the production of industrial gasses it is no surprise that Linde is at the forefront of this cutting-edge technology.
Linde’s has spearheaded global hydrogen infrastructure over the last several decades. This includes building the largest liquid hydrogen distribution capacity in the world. With close to 280 hydrogen refueling stations and electrolysis plants, Linde is one of the best underrated renewable energy stocks to buy for 2024.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) should be on investors’ radar when considering highly underrated renewable energy stocks to buy. As of 2023 the company is still the world’s largest producer of renewable energy from wind and the sun.
NextEra’s revenue and EPS have stagnated this year due to the broad slowdown in the renewable energy sector. A rapid shift in interest rate policy rapidly drove down construction activity. But the outlook for the renewable sector next year looks bullish, as the iEA projects renewable energy capacity to reach 550 GW in 2024.
In Q3 2023, NextEra delivered solid execution with backlog growth and renewable capacity expansion. The company added 3,245 megawatts of renewable energy and storage capacity to its backlog. Additionally, they expect to grow their dividend at a 10% annual rate through 2024.
On the date of publication, Terel Miles 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.