We all rely on fossil fuels daily, but there’s no question that there is more interest than ever in renewable energy. Global policy changes are encouraging green energy initiatives and more consumers than ever care about the environment and how the products they purchase affect the world around them.
A recent study by IBM, for example, found that about 70% of Americans prefer brands that are eco-friendly.
People are still using tremendous amounts of traditional energy sources, such as oil, coal, and natural gas. But support from governments worldwide for renewable energy initiatives means change is coming. And JPMorganChase and Citibank, two of the largest banks in the United States, have pledged to spend trillions of dollars over the next several decades to combat climate change.
In three years, assets in investment funds focused (at least partially) on the environment have tripled. David Brown, a Wood Mackenzie analyst, puts it plainly: “Wall Street will throw money at this problem… some will lose, some will gain, and the net benefit is you will have new industries that will emerge.”
The best green energy stocks for 2021
A lot of work goes into finding and investing in green energy stocks with true potential.
While the future of a green company might be bright thanks to a particular sector or partnership, fundamentals must be considered. A company with several million in revenue may grow over the next year, for example. Still, it doesn’t mean that it is a stock worth buying if the company already has a market capitalisation in the billions.
Besides assessing the most promising green energy companies from a fundamental perspective, looking at their quarterly earnings and latest company news, you should also consider doing some technical analysis. Evaluate the stocks’ price performance, use some technical indicators, for example, RSI (relative strength index) or MACD (moving average convergence divergence), to spot the potential changes in the price of the stock you want to trade.
More investors and traders are now asking: what are the green energy stocks to buy right now in May 2021? Here are the top three green energy stocks to consider right now.
Renewable Energy Group, Inc.: “green bonds” offering
Many traders and investors are searching for the next undervalued green energy gem. Currently, Renewable Energy Group, Inc. (REGI) is considered one of the clean energy stocks to watch. Renewable Energy Group is a biodiesel production company based in Iowa that has been a Fortune 1000 company since 2018, and boasts billions of dollars in annual revenue. It is a global producer and supplier of biodiesel and other renewable fuels.
The company recently announced a “green bond” intended to lead to refinancing and expanding existing projects. These secured notes are due in 2028, and $550m (£389m) is being offered. While the biofuels sector can be quite volatile, it’s clear that REGI could be a strong player that will be sticking around for some time.
One of the many issues when it comes to finding green energy stocks to buy is that many of them are based on hype rather than fundamentals. A company might have a lot of hype surrounding its technology without any actual numbers to back it up. Renewable Energy Group, Inc. doesn’t have this issue: it recently announced that revenue was up 14% ($540m) in its Q1 2021 report compared to Q1 2020.
According to MarketBeat, analysts now anticipate that REGI will be worth about $100 a share very shortly. When you consider that its stock price is currently around $60, it’s easy to see why many investors are excited about Renewable Energy Group, Inc.
Plug Power: high-profile investments and partnerships
There was an incredible amount of interest in Plug Power (PLUG) in January 2021 when it was trading at a price-to-sales ratio of 104. While PLUG may not boast the kind of EBITDA sales that appeal to some investors, it still boasts a partnership with automaker Renault to integrate its fuel cell technology into European commercial vans. That’s not all – a $1.5bn investment from Korea-based SK Group also has made Plug Power an attractive investment option to consider.
There’s another reason why Plug Power should have a place on any best green energy stocks list. PLUG has cooled off significantly from its January high of over $75. Currently, the stock is hovering at about $27. While the stock may not be performing as well as it did in 2020, there is still room for growth. The interest may have declined, but there appears to be some real support now that PLUG has rebounded from $20 several weeks ago.
Ultimately, there is still a lot of massive potential here with Plug Power, which has no problem attracting high-profile investors and partners. Notable financial analysts, surveyed by The Wall Street Journal, estimate that Plug Power’s stock price will reach $49 by the end of 2021, with others suggesting that it may reach as high as $79.
SunPower: highly-efficient solar cells
There are many leading solar companies in the United States, but few of them are better positioned to grow than SunPower (SPWR). SunPower specialises in both solar power and energy storage, and it was originally founded in 1985.
The company’s flagship product is “Maxeon,” a high-efficiency solar cell that boasts benefits over other traditional solar designs. According to the company’s statistics, a SunPower solar panel produces 60% more energy in the same space over the first 25 years than a conventional panel. The company has made some massive changes in recent years, including its decision in 2019 to spin off its manufacturing business.
It’s been quite an impressive ride for SunPower investors recently, as SPWR shares were trading at over $50 in January 2021. This is quite a significant surge if you consider that the company traded at around $6 in August 2020. At the moment of writing, the SPWR stock is hovering around $23, enjoying a “hold” analysts sentiment according to TipRanks and CNN Money.
SunPower can now focus on the healthy profit margins that residential and commercial solar panels have to offer. This means that Sunpower’s stock price has a potential to increase as more homes and businesses decide to go solar.
Best green energy companies to invest in: top three picks
The momentum in the renewable energy sector is undeniable, and many organisations worldwide are poised to win big. But while there’s nothing wrong with researching how to start investing in green energy stocks, it’s critical to remember that it could take some time before an investment truly pays off.
It’s important to ensure that these green energy stocks have enough cash on hand to weather the storm during more volatile periods. Without cash, these companies are less likely to thrive and expand in the near future. Also, investors and traders should pay attention to industry leaders that will likely benefit more from policy changes and government initiatives than smaller players that are not positioned to grow in the same fashion.
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.