As we enter 2024, the biggest focus for governments worldwide is climate change and renewable energy. While several governments have committed to switching towards renewable energy sources, it will take time for them to achieve the same. Solar energy was in high demand at one time and then dipped to low costs, while wind energy hasn’t become mainstream yet. This has led to this list of renewable energy stocks to buy.
If you look at the bigger picture, renewable energy will be a hot sector in the coming years. Several renewable energy stocks are trading at the perfect discount right now.
With that in mind, let’s take a look at the three renewable energy stocks to buy in 2024.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is a renewable stock that should be on your radar. The largest producer of solar and wind renewable energy, NextEra is a stock that wouldn’t disappoint. The company did see a slump in revenue and growth this year, but considering the outlook for the renewable energy sector, NextEra has a long way to go.
The one reason I like the stock is because it is a blend of two businesses into one: a regulated utility company and a renewable energy company. This means it continues to enjoy steady revenue from the utilities business while it expands its reach and market through the renewable segment. The company is on track to achieving the projections for this year. It reported an EPS growth in all three quarters and is a solid dividend stock to own.
NEE stock enjoys a dividend yield of 3.08% and has paid a quarterly dividend of $0.47. The management aims to achieve an earnings growth between 6% to 8% through 2026 and this means it will be able to sustain the dividends.
For a stock trading at $60, an annual dividend of $1.88 isn’t bad. The company aims to achieve a 10% dividend growth through this year. It has a solid backlog and added 3,245 megawatts of renewable energy to it. While the stock has lost 27% in the year, it is a worthwhile stock to own.
Linde PLC (LIN)
I have written about Linde PLC (NASDAQ:LIN) in the past, and I believe this is a safe and resilient stock in the renewable energy sector. Headquartered in the United Kingdom, the company is the largest industrial gas company in the world. The global conglomerate has impressed investors with strong numbers and also raised the earnings expectations for the year. It has a presence across multiple industries and is working on expanding its market share.
Linde has a backlog of $7.8 billion which will keep the company busy throughout 2024 and will generate steady cash flow. It has raised earnings guidance for three times this year. The management now expects earnings at 14%-15%, up from the prior expectation of 12%-14%.
Linde has signed agreements in Brazil that will help it increase the active renewable energy by more than 60%. LIN is a dividend stock with a yield of 1.24%. It is exchanging hands for $410 and has soared 29% in the year. The last time I wrote about the stock, it was exchanging hands for $370.
It has a global presence, a solid history, and a strong balance sheet. This is one renewable energy stock with low risk and passive income generation. Citi analyst has a price target of $475 for the stock with a buy rating, while Morgan Stanley has a price target of $450.
Brookfield Renewable Partners (BEP)
A leader in the renewable energy space, Brookfield Renewable Partners (NYSE:BEP) hasn’t had a good 2023 and the stock lost 11% in value over the past six months. It is the largest electric power producer, making up over 50% of its portfolio. However, the company has a diversified portfolio, including wind, solar, and energy storage services.
The company has more than $800 billion in assets under management and has shown a strong track record. It has seen a 7% year-over-year increase in revenue in the third quarter to hit $1.18 billion. It expands the portfolio through acquisitions, which drives growth over the years. The management is expecting a double-digit return through the acquisitions.
BEP stock enjoys a dividend yield of 5.14%, which is better than that of several other companies in the industry. The company is profitable, and it has enough cash to sustain the dividends. It expects an annual EPS growth of over 10% through 2028, allowing it to hike the dividend annually. Trading at $26.28 today, the stock looks highly undervalued to me, and it has the potential to soar at least 50% in the coming months.
The rising demand for renewable energy will put the stock in a strong position, and if you are looking for passive income, you will not be disappointed.
On the date of publication, Vandita Jadeja did not hold (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.