A list highlighting the 7 best solar energy stocks to invest in this year
The sun is a powerful heavenly body without which life on this planet could not be possible. It is also a massive power source that is available to use for about half of the day, every day. For this very reason, solar power has gained so much recognition as one of the most viable options for alternative energy.
Now as governments and societies all around the world push towards greener forms of energy, we can expect that the market will move towards meeting this demand and the stocks of businesses who deal in green energy to rise. It would be more than wise for an investor to capitalize on this now while the transition is still taking place.
But which stocks specifically are the best of the best? Which ones stand the most to gain from the current shift in the energy market?
Well, for your research and decision-making, we have compiled a list of the 7 best solar energy stocks to invest in this year:
The Best Solar Stocks to Buy/Invest in
Let's Get Started!
1. SunPower Corporation (NASDAQ: SPWR)
Market: $4.10 Billion
As the name would suggest, SunPower Corp. is a solar power utility company that operates globally. They are divided into three segments: Residential, Light Commercial, Commercial and Industrial Solutions, and Others. Other than that, the company also offers commercial roofs, carport, and ground-mounted systems.
So far in the year 2021, the company has been taking steps to free up cash and begin the process of expansion, particularly in the residential market. They intend to reach more homes looking to install solar power fixtures on their rooftops. Financially, the company is beating analysts' expectations and seeing revenues of $305.78 million. Their stock value has done pretty well too with gains of 22.77% in the past 6 months and 19.95% year to date. Investors should also know that the company has a gross profit margin of 16.41%.
As of the first quarter of 2021, 18 hedge funds are investing in the company with a total stake value of $182 million.
2. First Solar, Inc. (NASDAQ: FSLR)
Market: $8.82 Billion
The company deals in mainly solar renewable energy and provides photovoltaic solar energy solutions in the US, Japan, France, Canada, India, Australia, and internationally. With a global reach and a business boost provided by the recent ban on Chinese solar products from Xinjiang, the company has garnered itself a "buy" rating along with a higher estimated share price by Citi analysts.
The start of 2021 was good for the company as it reported revenues of $803.37 million in the first quarter. This represents a 50.97% increase year over year which is quite good in such a small time frame. The stock has also gained 87.05% in the past year -- one of the highest gains compared to its counterparts in the market -- while gross profit margins grew to be 27.25%.
24 hedge funds are investing in the company's stocks. Collectively, they have a total stake value of about $304 million.
3. Brookfield Renewable Partners L.P. (NYSE: BEP)
Market: $13.31 Billion
One of the larger renewable energy companies on this list, this business operates mainly in North America, Colombia, Brazil, Europe, India, and China. Though a good portion of the electricity is derived from solar power, the company also gets its energy from hydroelectric, wind, and other renewable energy sources too.
With a diverse portfolio at an extensive repertoire of operations globally, investors are pinning their bets for the future of the market into this company. This is reinforced by the announcement of the company to partner with Plug Power to utilize 100% of Brookfield Renewable Partners L.P.'s hydroelectric powered renewable energy.
In the first quarter of this year, the company reported a revenue of $1.02 billion which represented a 28.78% growth year over year and beat estimates by $92.07 million. Stocks have also performed well with gains of 53.38% in the past year and a profit margin of 66.88%.
There are also 24 hedge funds tied to the company stocks with a stake value of about $223 million.
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4. SolarEdge Technologies, Inc. (NASDAQ: SEDG)
Market: $12.92 Billion
SolarEdge plays an integral, albeit complicated, part in the renewable energy market. They mainly make and market DC inverter systems for solar photovoltaic installations worldwide. It provides power optimizers, communication devices, and smart energy management solutions for residential, commercial, and small utility-scale solar installations and inverters.
With such a wide classification of products and services, the company is looking to be the sort of one-stop-shop that both commercial and industrial markets are looking for. By the end of the first quarter of 2021, the company reported revenues of $405.49 million. This ended up beating estimates by $9.92 million and indicated a stock gain of 111.33% in the past year.
All this boosted investor confidence in the company which was shaken due to the rising interest rates.
There are 32 hedge funds investing in the company with a total stake value of roughly $420 million. This is considerably higher than the 28 hedge funds of last quarter.
5. Sunrun Inc. (NASDAQ: RUN)
Market: $10.32 Billion
In terms of residential solar power, few companies can hold a candle to this company. Sunrun mainly provides and develops residential solar energy systems in the US but also has plans for overseas expansion. Many homeowners might more readily recognize the company as a seller of solar energy systems and products, such as solar panels.
The company has had a great run so far into 2021 and, in the first quarter, reported a revenue of $334.79 million. This has it beating most analysts' estimates by $10.81 million. On top of that, the company also has a gross profit margin of 17.77%, and the stock has gained 201.44% in the past year -- one of the largest gains in a single year among the companies on this list.
This performance reflects the number of hedge funds investing in the company. As of the beginning of the year, the company has 41 hedge funds investing a total stake value of about $24 billion.
6. Vistra Corp. (NYSE: VST)
Market: $9.21 Billion
Definitely one of the larger utility companies in the US, this company is famed for providing cleanly sourced energy to the generation capacity of 38,700 MW. Apart from solar power, the company's portfolio also includes nuclear, and battery energy storage facilities.
Income investors also enjoy Vistra stocks as they pay a regular quarterly dividend which can serve as a viable source of passive income. In April, the company announced a dividend payout of $0.15 per share, placing its forward yield to about 3.52%. Revenues are also looking good with a report of $3.21 billion in the first quarter. This marked an increase of 12.21% year over year and beat estimates by $1.88 billion. Stocks though saw menial gains of about 0.37% in the past year, and the company can still improve on its gross profit margin of 13.5%.
There are about 46 hedge fund investors tied to the company with a total stake value of around $1.25 billion. More hedge funds than last quarter's 39.
7. Enphase Energy, Inc. (NASDAQ: ENPH)
Market: $24.18 Billion
In May of this year, the company announced a buyback of shares worth $500 million. When companies buy back their share, they increase the value of shares still in the hands of investors. This, of course, made investors very happy as is evidenced by the company's quarterly report.
So far into the year, the company has garnered $301.75 million in revenue. This means that there has been an increase of 46.81% year over year and beating that analysts' estimates by $9.32 million. The stock has also done pretty well so far -- gaining 12.07% in the past 6 months and 10.75% year to date. Finally, the company's gross profit margins are one of the highest ones of any on this list with 44.59%.
As of the first quarter of 2021, 49 hedge funds are investing in the company's stocks. Their share stake value amounts to roughly $803 million and is higher than last quarter's 48 hedge funds.
Bottom Line
And those were the best solar energy stocks available for investment this 2021. We certainly hope it was helpful for you in your journey as an investor and that you make profits off of some of the things learned here. If you're looking to diversify, and invest in other forms of Eco-friendly stocks, then consider the following:
Investment in green and sustainable energy is definitely a great choice in today's market climate. Investing in the trend towards more sustainable energy not only improves the way we power our cities but also lets you benefit from renewable energy financially.
With enough research, a full-proof strategy, and a diverse portfolio, we have no doubt your earnings will be as unlimited as the sun's potential to provide power.