For Immediate Release
Chicago, IL – April 14, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Clearway Energy (
CWEN Quick Quote CWEN - Free Report) , NextEra Energy ( NEE Quick Quote NEE - Free Report) , Brookfield Renewable Partners L.P. ( BEP Quick Quote BEP - Free Report) and Vestas Wind Systems ( VWDRY Quick Quote VWDRY - Free Report) . Here are highlights from Thursday’s Analyst Blog: 4 Stocks to Watch on the Path to Decarbonize the Future
Amid heightening climate concerns, the world is on a decarbonization mission. This has resulted in a significant shift toward renewable energy sources, which are becoming increasingly crucial in battling carbon emissions. Renewable energy offers a more sustainable alternative to traditional fossil fuels.
The world is already seeing a significant increase in the use of renewable energy sources such as solar, wind, geothermal, hydro, and biomass. As society continues to change and adapt, alternative energy use will be more common, with many energy companies already shifting their focus to renewable energy in place of oil, coal and natural gas.
This increasing adoption of renewable energy sources makes investing in renewable energy a promising option. Investors can consider adding stocks like
Clearway Energy, NextEra Energy, Brookfield Renewable Partners L.P. and Vestas Wind Systems. Rosy Prospects of the Renewable Energy Market
Factors like supportive government policies to encourage more renewable investments, plummeting cost of generating renewable electricity as well as rapid adoption of electric vehicles (EV) across the board are driving the renewable energy market. Renewable energy sources are not only cleaner than traditional fossil fuels but are also becoming more affordable and accessible.
Governments are also actively focused on speeding up global decarbonization by passing aggressive climate legislation to increase investment in the clean energy sector. For instance, to fight the ongoing climate crisis and strengthen the U.S. energy infrastructure, the Inflation Reduction Act of 2022 ("IRA") entailed an investment of $369 billion over the next 10 years. The Climate Bill, part of IRA, is estimated to reduce the country's carbon emissions by roughly 40% by 2030.
Clearly, the power sector is undergoing decarbonization, as a result of the significant expansion in wind and solar energy. Per the latest report by clean energy think tank Ember, wind and solar hit a record 12% of global electricity last year. Per the report, the world's electricity emissions intensity reached its lowest level ever in 2022.
The International Energy Agency (IEA) predicts that by 2025, renewable energy will account for around 35% of the world's electricity generation, rising from the current levels of around 29%. Per Allied Market Research, the global renewable energy market was valued at $881.7 billion in 2020 and is projected to reach $1,977.6 billion by 2030, at a CAGR of 8.4% from 2021 to 2030.
Power a Safer Future by Investing in Renewables
Investing in renewable energy is not just beneficial for the environment but can also be profitable. Renewable energy companies are typically involved in the production, distribution, and storage of energy from renewable sources. As the companies are often involved in multiple areas of the energy sector, it leads to portfolio diversification.
Additionally, renewable energy firms are often subject to government incentives and subsidies, which can provide a stable and predictable source of revenues. Finally, the growth potential of renewable energy companies is massive as demand for renewable energy is only set to blossom, going forward. Thus, given the massive government investments and bright outlook for the alternative energy market, investing in renewable energy can fetch investors handsome rewards.
4 Top Renewable Energy Stocks for a Sustainable Tomorrow Clearway along with its subsidiaries owns and operates a diverse portfolio of contracted renewable and conventional generation, along with thermal infrastructure assets in the United States. Furthermore, Clearway's asset portfolio includes more than 9,000 megawatts (MW) of wind, solar, thermal, and natural-gas-fired power generation facilities as well as distract energy systems.
In January 2023, Clearway Energy's 36 MW solar farm in Waiawa with 144 MWh of battery storage started commercial operations. The site will generate enough clean electricity to power more than 7,600 homes each year. This should boost further CWEN's position in the renewable energy market.The consistent performance of the company supports its shareholder-friendly moves. Clearway has been paying out dividends consistently since 2015. The utility has been increasing dividends every year since the inception of the payment.
The Zacks Consensus Estimate for Clearway's 2023 sales and earnings implies year-over-year growth of 15% and 149%, respectively. Over the past 90 days, the company's earnings estimates for 2023 and 2024 have moved north by 30 cents and 88 cents, respectively. It boasts a long-term earnings growth rate of 10%. Clearway currently sports a Zacks Rank #1 (Strong Buy).
NextEra is a leading provider of wind and solar energy in the United States. The company also operates in Canada and has a growing presence in Latin America.NextEra has many renewable projects in its backlog and their completion will ensure reduced emissions. The company expects to be able to add 33-42 gigawatts (GW) of new renewables in the 2023-2026 time frame to the generation portfolio via clean energy investments.
NextEra expects to witness a compound annual growth rate for earnings per share in the range of 6-8% through 2026, powered by continued investments in renewable energy. Encouragingly, the company boasts a solid balance sheet and targets to deliver around 10% annual dividend growth through at least 2024.
The Zacks Consensus Estimate for NextEra's 2023 and 2024 earnings implies year-over-year growth of 8% and 8.2%, respectively. The same for 2023 and 2024 revenues indicates a year-over-year uptick of 27% and 9%, respectively. The company surpassed earnings estimates in the last four quarters, the average surprise being 6.2%. It boasts a long-term earnings growth rate of 9%. NextEra currently carries a Zacks Rank #2 (Buy).
Brookfield is a renewable energy firm that operates hydro, wind, solar, and storage assets in North America, South America, Europe and Asia.Hydroelectric power comprised 50% of its portfolio in 2022. The firm remains focused on the expansion of its expertise in wind, solar, and energy storage capabilities through acquisitions and development projects. Over the past decade, Brookfield's earnings have witnessed a CAGR of around 10%. Brookfield is committed to maintaining a strong balance sheet to support further expansion.
The Zacks Consensus Estimate for Brookfield's 2023 and 2024 earnings implies year-over-year growth of 120% and 275%, respectively. Over the past 90 days, the company's earnings estimates for 2023 have moved north by 7 cents. The firm boasts a dividend yield of more than 4% and has increased its payout five times in the last five years. BEP currently carries a Zacks Rank #3 (Hold).
Vestas is a global leader in the wind energy sector. It has a wide range of expertise, including the design, manufacture, installation, development, and servicing of wind energy and hybrid projects worldwide. With over 157 GW of wind turbines installed in 88 countries, Vestas is a major player in the industry.
In April 2022, Brookfield formed a strategic partnership with SSE Renewables for participation in the 1.4GW Hollandse Kust (west) offshore wind farm zone tenders, which are currently underway in the Netherlands. Such partnerships are favorable for expanding this company's footprint in the growing wind market.With its exclusive focus on wind turbines, Vestas stands out as one of the few large-scale, pure-play wind energy investment options available.
The Zacks Consensus Estimate for Vestas' 2023 and 2024 earnings implies year-over-year growth of 126% and 189%, respectively. The same for 2023 and 2024 revenues indicates a year-over-year uptick of 7% and 25%, respectively. Vestas currently carries a Zacks Rank #3.
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. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.