Editor’s note: This article is regularly updated with the latest information.
Nothing changes broader behaviors more than a sharp paradigm shift. That’s exactly what’s bolstering the best clean energy stocks to buy now. With geopolitical tensions skyrocketing alongside climate change dynamics that can’t be ignored, people are scrambling to make necessary adjustments. Therefore, investors who get in at current discounted rates might do well over the long run.
One of the biggest catalysts for clean energy stocks right now is Russia’s invasion of Ukraine. Alongside the obvious implications, Russia has also made itself an unreliable economic partner. Because of that, many European policymakers set out to fast track renewable energy initiatives after the invasion.
Another powerful tailwind for the best clean energy stocks to buy is a growing realization about climate change. People are no longer viewing the world through rose-colored glasses. Better yet, the technologies undergirding renewable energy are now fostering efficiencies across multiple applications, making the sector more attractive for investors.
In other words, going green isn’t about tree hugging or other pejorative descriptions. Instead, it’s a viable business opportunity. That’s supporting some of the best clean energy stocks to buy now.
Best Clean Energy Stocks to Buy: NextEra Energy (NEE)
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One of the largest companies in the U.S. committed to green infrastructure, NextEra Energy (NYSE:NEE) easily commands interest as a candidate for best clean energy stocks to buy. Per its website, NextEra has infrastructural investment plans for 2022 totaling between $50 billion to $55 billion. The company also features 45,500 megawatts (MW) of net generating capacity.
Overall, NEE stock deserves attention because of its balanced profile. Leveraging a market capitalization of $170 billion, NextEra is currently considered fairly valued based on a basket of valuation metrics. The company’s gross margin is a particular highly; at 45%, it’s substantially higher than the 29% industry median.
Admittedly, NEE stock has encountered trouble this year, down 5% year-to-date (YTD). Its less-than-ideal first-quarter performance certainly didn’t help. Nevertheless, against a longer-term framework, NextEra is one of the best clean energy stocks to buy based on its sheer scale.
Enphase Energy (ENPH)
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One of the challenges of renewable energy sources is their intermittency. Since the sun eventually sets and the wind can stop blowing, proponents of renewables have to find ways to store energy during down periods. That’s where Enphase Energy (NASDAQ:ENPH) comes in, specifically with its battery storage system that fosters resilience during compromising events like blackouts.
Along with its residential services, Enphase delivers a range of solutions for commercial enterprises, facilitating the equivalent magnitude of energy resilience at scale. Enphase has also installed more than 45 million microinverters — systems that convert direct current into alternating current — on over 2 million homes and businesses.
Fundamentally, ENPH stock is one of the best clean energy stocks to buy for its financial stability. For instance, its Altman Z-score (a measure of bankruptcy risk) is well into the safe zone.
Finally, it’s worth noting that the company posted $530 million in sales for Q2 2022, up 67% year-over-year (YOY).
Best Clean Energy Stocks to Buy: Brookfield Renewable Partners (BEP)
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As one of the world’s largest publicly traded, pure-play renewable power platforms, Brookfield Renewable Partners (NYSE:BEP) is often cited as one of the best clean energy stocks to buy. The company’s portfolio encompasses hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia.
In April 2022, Brookfield formed a strategic partnership with SSE (OTCMKTS:SSEZY), a multinational energy firm headquartered in Scotland. Under the deal, the two enterprises will participate in Dutch offshore wind tenders. Both companies view the Netherlands as a leading market for offshore wind development, thus potentially cementing their place in a high-growth subsegment.
Another factor bolstering BEP stock is the company’s solid financials. In particular, Brookfield has reasonably robust profitability metrics. Its operating margin is 27%. Brookfield is currently fairly valued as well.
Although it’s not a typical name discussed in the energy sector, semiconductor specialist Wolfspeed (NYSE:WOLF) is nevertheless a worthy candidate among the best clean energy stocks to buy. Perhaps best-known for providing advanced semiconductor solutions for electric vehicle (EV) components and communications infrastructures, the company plays an integral role in renewables.
While platforms like wind and solar grab all the headlines, a constant challenge with next-generation power sources is efficiency. After all, energy is limited, necessitating best practices on its utilization. As such, the company’s products and systems are designed around a focus to make sure every kilowatt hour is expended with extreme efficiency. Not only does this effort contribute to superior output, it also cuts down on lifetime costs for utility firms.
To be fair, WOLF stock is on the riskier side of the best energy stocks to buy. But with decent revenue so far this year, it could be a good long-term opportunity.
Best Clean Energy Stocks to Buy: Ormat Technologies (ORA)
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One of the most scientifically intriguing candidates among the best clean energy stocks to buy, Ormat Technologies (NYSE:ORA) specializes in geothermal energy. As the U.S. Energy Information Administration explains, geothermal energy is a renewable derived from heat continuously produced inside the earth.
While every energy source has its set of pros and cons, one of the advantages of geothermal energy is its huge potential. Through ongoing research and development, it’s conceivable that the number of exploitable geothermal resources will increase. In addition, this avenue is reliable. Unlike the intermittency of wind and solar, geothermal plants have a much more predictable power output flow.
Better yet, ORA stock is attractive as the company holds its own on the financial front. For example, Ormat features solid profitability metrics, with a highlight being its 25% operating margin. In Q2 2022, the company also posted revenue of $169.1 million, exceeding Wall Street estimates and representing a 15% YOY increase.
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Venturing out into the speculative section for the best clean energy stocks to buy, Ørsted (OTCMKTS:DNNGY) presents an intriguing opportunity for the adventurous investor. A multinational power company based in Denmark, the company is one of its home nation’s largest energy firms — and one the world’s largest developers of offshore wind power.
Per its website, Ørsted now has over 1,000 onshore wind turbines around the world, including a growing U.S. portfolio. The company offers 3,000 MWs of power just through its U.S. onshore wind farms. Clearly, Ørsted is well on its way to comprehensively dominating the wind turbine industry.
To be fair, DNNGY stock has been struggling since hitting a peak in early 2021. Despite the downward slide, however, the volatility has conspicuously died down. Speculators may now be eyeballing a viable entry point into this clean energy powerhouse.
Best Clean Energy Stocks to Buy: Plug Power (PLUG)
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At the start of 2020, hydrogen fuel-cell specialist Plug Power (NASDAQ:PLUG) traded hands in low single-digit territory. At its peak in January 2021, however, PLUG stock appeared to be on a parabolic trajectory to the triple digits.
By the next month, the floor was pulled out from underneath PLUG, leading to a painful erosion of market value. Still, for the speculative investor, PLUG stock could offer one more ride to the top. As the Wall Street Journal details, Plug Power is banking heavily on green hydrogen production, or hydrogen manufactured “using renewable electricity to power an electrolyzer that splits water into hydrogen and oxygen.”
According to management, the time for hydrogen integration may be upon us, particularly as government and corporate entities promise to cut emissions. Still, the challenge for PLUG stock has been converting a compelling narrative into meaningful substance. The company has yet to turn a full-year profit.
That said, with Plug Power’s renewed focus, it could turn out to be one of the best clean energy stocks to buy.
On the date of publication, Josh Enomoto 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.
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.