With new paradigms thrust upon the free world, the discussion about clean energy stocks represents an unavoidable topic. While Russia’s invasion of Ukraine imposes the severest obstacle to global energy infrastructures, the U.S. and its western allies engage in competition with autocratic powers. Therefore, the time to invest in alternative solutions is now.
Of course, the viability of clean energy stocks presents major concerns. One of the central headwinds centers on global recession fears. In other words, government priorities focus on stabilization. Yet to truly reach energy independence, concerned nations must state laying the groundwork today. And the evidence does suggest that international policymakers received the message. Nevertheless, it will be a wild ride most likely. Therefore, I’ve divided this list of clean energy stocks to include both established players along with speculative ideas for those that wish to gamble.
Ocean Power Technologies
NextEra Energy (NEE)
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A common commodity among the best clean energy stocks to own, NextEra Energy (NYSE:NEE) specializes in renewable infrastructures, particularly wind and solar solutions. As well, the company also features a regeneration business unit, which focuses on energy usage efficiencies. In addition, the segment researches ways to reclaim wastewater and convert it to non-potable water.
At the moment, NEE represents one of the stalwarts among clean energy stocks, commanding a market capitalization of $170.4 billion. On a year-to-date basis, NEE did admittedly lose more than 6% of equity value. However, this performance rates much better than the benchmark equities index, which shed more than 17% during the same period. Further, NEE gained nearly 10% in the trailing month, reflecting near-term momentum.
At the time of writing, Gurufocus.com rates NEE as fairly valued based on its projection of fair market value (FMV). To be sure, most investors probably don’t seek NextEra to strike it rich. Rather, they depend on its consistently profitable business to ride out broader turbulence.
Bloom Energy (BE)
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Another well-known enterprise among clean energy stocks, Bloom Energy (NYSE:BE) manufactures and markets solid oxide fuel cells that produce electricity on-site. According to its corporate profile, its fuel cells are subsidized by government incentive programs for green energy. Currently, the company carries a market cap of just over $4 billion. BE stock dipped a little more than 7% YTD.
Although Bloom’s performance might not immediately warrant enticement, the nearer-term picture offers food for thought. In the trailing month, BE gained 12.5% of equity value. Also, in the trailing half-year period, BE returned its stakeholders 15%. Technically, then, it appears that investors may be sensing a resurgence in clean energy stocks.
Per Gurufocus.com, Bloom rates as fairly valued based on the investment resource’s proprietary FMV calculations. Standout attributes in its financials focus on the growth portion of the income statement. Specifically, Bloom’s three-year book growth rate stands at 42.2%, ranked higher than over 93% of its peers.
Enphase Energy (ENPH)
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One of the highfliers of clean energy stocks, Enphase Energy (NASDAQ:ENPH) is an energy technology firm headquartered in Fremont, California. Per its public profile, Enphase develops and manufactures solar micro-inverters, battery energy storage, and electric vehicle charging stations primarily for residential customers. Fundamentally, ENPH aligns with myriad relevancies, explaining its remarkable upside performance of over 73% YTD.
While I can probably write a long list of positive catalysts, two immediately come to mind. First, inflation – particularly early in the year – inspired people with the means to make the pivot from combustion cars to EVs. Thus, Enphase naturally received downwind benefits with its charging solutions.
Second, the vulnerable grid in many of America’s metropolitan areas caused households to think about independent energy resilience. This is where battery storage systems – which can provide power during emergencies – enter the front and center stage. Given that infrastructural vulnerabilities have only seemed to worsen in recent years, Enphase will likely remain relevant. Therefore, even with ENPH skyrocketing, it’s a worthy idea among clean energy stocks.
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One of the most distinct clean energy stocks available, I have high hopes for Ormat (NYSE:ORA). Based in Reno, Nevada, Ormat supplies alternative and renewable geothermal energy technology. The company has built over 190 power plants and installed facilities with a combined output of over 3,200 megawatts (MW). As of Jan. 2021, it owns and operates 933 MW of geothermal and recovered energy-based power plants.
Admittedly, the narrative caters to a more speculative profile but the science also intrigues me. Per the National Geographic Society, “[g]eothermal energy is heat that is generated within the Earth.” Further, it’s a “renewable resource that can be harvested for human use.”
According to Fortune Business Insights, the global geothermal market “is projected to grow from $62.65 billion in 2022 to $95.82 billion by 2029.” Clearly, market observers seem to have received the message. Since the start of the year, ORA gained 12.6%, outperforming other clean energy stocks tied to more established solutions like wind and solar.
As the only name among clean energy stocks on this list traded over the counter, the temptation is to consider Orsted (OTCMKTS:DNNGY) as ignorable. To be fair, Orsted does present great risk, particularly for conservative investors. Since the beginning of this year, DNGGY dropped a bit over 30% in market value. That’s not exactly heartening. However, shares gained 6% in the trailing month, possibly reflecting a near-term resurgence.
For the speculator, Orsted presents an intriguing longshot case. A Danish multinational power company, it’s the largest energy firm in its home country. Fundamentally, Orsted generates headlines because it’s the world’s largest developer of offshore wind power by the number of built offshore wind farms per its corporate profile.
According to McKinsey & Company, “global installed offshore wind capacity is expected to reach 630 gigawatts (GW) by 2050, up from 40 GW in 2020, and with upside potential of 1,000 GW…” Therefore, Orsted already stands positioned in a potentially viable sector.
NuScale Power (SMR)
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Easily my favorite company among clean energy stocks, NuScale Power (NYSE:SMR) specializes in small modular reactors; hence, the ticker symbol. Commanding the extraordinary energy density of nuclear facilities but with a smaller and safer footprint, NuScale carries the potential to bring power closer to the source of demand. In other words, it’s similar to edge computing but with electrons.
Of course, nuclear power features many controversies, none of which are NuScale’s fault. However, any company in this sector will likely face product evangelism challenges. However, I’m bullish on SMR because a discussion about clean energy stocks for future development can’t ignore nuclear. It’s the most reliable energy source and it commands incredible density that nothing else can touch.
Further, I’m very much interested in the scientific potential of NuScale, which theoretically empowers previously economically unfeasible endeavors such as desalination or the conversion of ocean water into potable (drinking) water. With SMR, it’s possible for international policymakers to kill two birds with one stone.
Ocean Power Technologies (OPTT)
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With the final idea of this list of clean energy stocks to own, I’m going to go extremely speculative with Ocean Power Technologies (NYSEAMERICAN:OPTT). You can look up the name yourself but I’m going to be upfront here. At the time of writing, shares trade hands at 64 cents. A delisting could very well be in Ocean Power’s future. Also, shares dropped almost 60% in equity value.
Therefore, the rules are simple. Do not invest in OPTT if you can’t handle volatility. As well, you must not put more money into Ocean Power than you can afford to lose. Chances are, you will lose.
Nevertheless, OPTT intrigues me because of the underlying science. The company’s core product is PowerBuoy, a wave energy conversion technology that can theoretically scale to hundreds of megawatts. In addition, the generated energy from wave power can be supplied to the grid via submarine cables.
What I love about the narrative is that Ocean Power attempts to leverage the kinesis that already exists in nature for practical applications. Obviously, though, with such sharp losses, this is a gamble as opposed to a serious investment – but what a gamble it is!
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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