3 Green Energy Stocks That'll Help Save Your Trading Track Record
Green energy solutions are growing rapidly due to consumer interest and government initiatives. This article discusses the strong fundamentals of three green energy stocks: Canadian Solar (CSIQ), Westlake Chemical Partners (WLKP), and...
With government initiatives and consumer interest, green energy solutions are experiencing rapid growth. These stocks have strong fundamentals and should be considered wise additions to your portfolio. Read ....
Many countries are taking steps to shift to clean energy in the face of growing concerns about climate change. Green energy growth will be accelerated by robust demand and record-breaking rafts of clean energy incentives under the Inflation Reduction Act.
Let's look at some green energy stocks: Canadian Solar Inc. (CSIQ), Westlake Chemical Partners LP WLKP, and Genie Energy Ltd.
Biden's administration plans to eliminate the use of fossil fuels in energy generation in the United States by 2035. The White House has set a goal of 80% renewable energy generation in 2030 and 100% emission-free electricity five year later.
Renewables are now more affordable than major fossil fuels, and can be used in many cases to save money. The government has added value by offering subsidies and incentives, as well as dropping the cost of the deal. The Inflation Reduction Act, which granted $369 billion to green energy, gave America a green light.
The projections for solar development post-IRA are much higher. EIA reported that, "Across all cases, by comparison with 2022, solar generation capacity grows by approximately 325% to 1019% in 2050 and wind generating capacities by about 138% or 235% by 2050." To support the growth of renewables, we see an increase in installed battery capacity.
Global renewable energy market size is expected to reach $1.15 trillion in 2027 at a CAGR 9.1% between 2021 and 2027.
This backdrop suggests that fundamentally strong green energy stocks CSIQ and WLKP might be solid investments now.
Canadian Solar Inc. (CSIQ)
CSIQ is a Canadian company based in West Guelph. It designs, develops and manufactures solar ingots and wafers as well as cells, modules and other solar power products. The company has two segments: Module and System Solutions, (MSS) and Energy.
CSIQ recently announced CSI Solar Co., Ltd.’s 2024 capacity expansion plans. It plans to increase its module capacity by 25 GW, add 30 GW ingot, 15GW wafer, and 10 GW cell. According to Dr. Shawn Qu (CSIQ's Chairman & CEO), the new technology would allow the company to better meet market demand and accelerate growth.
He said, "By increasing our level of vertical integration we continue to improve control over technology, raw materials sources and costs." These business plans will allow us to further enhance our long-term leadership position, not only in our end markets, but throughout our supply chain positioning.
CSIQ's trailing-12-month ROCE is 383.7% lower than the industry average of 2.65%. The CSIQ's trailing-12-month ROTC and ROOT of 2.66% are 295.5% and 135.5% respectively, which is higher than the industry averages, 0.67%, and 2.06%.
CSIQ's fiscal fourth quarter ended December 31, 2022 saw net revenues of $1.97 billion. This represents a 29% increase year-over-year. The company's gross profit grew 15.7% to $348.63million, an increase of 15.7% over the previous year. Its income from operations increased 101.4% to $135.76million in the same quarter compared to the year-ago quarter.
The fiscal fourth quarter ended December 31, 2022 saw net income attributable CSIQ and earnings/share of $77.83million and $1.11 respectively, an increase of 199.8% and 184.6%, respectively.
Analysts predict that CSIQ's EPS will rise 16% year-over–year to $1.24 in the fiscal second quarter ending June 20,23. Revenue for the same quarter will increase marginally to $2.32 Billion year-over-year. It is remarkable that the company exceeded the consensus EPS estimates for each of the four preceding quarters.
The stock gained 14% in the last year, and 22.3% in the past six months to close at $38.85.
The promising outlook of CSIQ's POWR Ratings are reflected in its CSIQ rating. According to our proprietary rating system, it has a B overall rating which means that it is Buy. The POWR Ratings evaluate stocks using 118 factors each with its own weighting.
CSIQ is rated A for Value and B for Growth. It ranks first among 17 stocks within the Solar industry.
You can also view the POWR Ratings for CSIQ, which are more than what we've already mentioned.
Westlake Chemical Partners LP WLKP
The company sells ethylene coproducts such as propylene, crude butadiene and pyrolysis gasoline directly to third parties either on a contract or spot basis.
WLKP paid its 34th consecutive quarterly dividend to unitholders on February 16 at $0.4714 per unit. The company's annual dividend of $1.89 yields 8.73% at current prices. Over the last five years, dividends from the company have grown at a 4.9% compound annual growth rate.
WLKP's trailing-12 month EBIT margin (29.42%) and EBITDA margin (23.82%) are 73.2%, 54.7% and respectively higher than the industry averages (11.60% and 19.03%). The stock's trailing 12-month levered FCF margin is 20.05%, which is 333.4% more than the industry average (4.63%).
WLKP's net sales increased by 11% to $366.84million in the fourth quarter ended December 31, 2022. For the same quarter, net income attributable WLKP partner and net income per limited partnership unit attributable WLKP partner was $16.78 million, and $0.48, respectively.
The total liabilities of the company were $468.27 millions for the period ending December 31, 2022, as compared with $508 million last year.
Analysts predict that WLKP's revenue will increase 1.6% year over year to $1.62 Billion for the fiscal year ending in December 2023. The company's earnings per share for the same year are expected to be $1.81. It is remarkable that the company exceeded the consensus revenue estimates in three quarters.
The stock gained 1.3% over the last five trading days to close at $21.50.
WLKP's solid fundamentals are reflected by its POWR Ratings. Our proprietary rating system rates WLKP as a Strong Buy with an overall rating of A.
Stock also holds an A for Quality and a b for Value, Stability and Sentiment. It ranks first in the 9-stock MLPs-Other industry, which is B-rated.
Genie Energy Ltd. (GNE)
GNE and its subsidiaries supply electricity, natural gas and other services to small and large businesses worldwide. It operates in three segments: Genie Retail Energy, GRE International and Genie Renewables.
Genie Renewables announced on March 27 that it had purchased site rights to a community-scale solar generation site in Upstate New York. The proposed project will have an aggregate capacity of 6.25 megawatts (MW) once it is completed and brought online.
Genie Renewables announced it had received a positive CESIR (Coordinated Electric System Interconnection Review), and an estimate of the interconnection cost from Con-Ed to connect its proposed 3 MW community solar project in Downstate New York. Genie Renewables expects to receive its notice of proceeding and to begin construction within the next few months. However, it must negotiate a land lease and obtain local permits.
On March 1, 2023, the company paid $0.075 per share. The company's current annual dividend, $0.30, yields 1.93% at current prices. GNE's average four-year dividend yield is 2.9%
GNE's trailing-12 month EBIT margin of 25.30%, is 40.7% more than the industry average (17.98%). The stock's trailing-12 month net income margin is 27.83%, which is 158.8% more than the industry average 10.75%.
GNE's fiscal fourth quarter ended December 31, 2022 saw a 17.6% increase in total revenue to $81.40 millions. GNE's income from operations increased by 167.2% to $15.50million, while adjusted EBITDA rose 153.4% to $18.50million.
Its net income attributable GNE common stockholders was $16.20 million and its earnings per share attributable GNE common shareholders stood at $0.61 for fiscal fourth quarter ended December 31, 2022.
To close at $15.80, the stock gained 137.2% in the past year and 65.3% in the past six months.
GNE's strong prospects are evident in its POWR Ratings. Our proprietary rating system gives the stock a rating of B. This means that it is rated Buy.
It is rated B for Momentum and Value. It is ranked second among 64 stocks in the Utilities-De Domestic industry.
Click here to see GNE's ratings on Growth, Stability and Sentiment.
The best thing about the bear market is that there are still thriving businesses trading at a huge discount to fair value.
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Premarket trading on Wednesday saw CSIQ shares remain unchanged. CSIQ shares were unchanged in premarket trading Wednesday. The benchmark S&P 500 index has seen a 7.54% increase over the same time period. CSIQ has gained 25.73% year-to-date.
About the Author: Sristi Jayaswal
Sristi was interested in the stock market during her school years, and she went on to become a financial journalist. Her preferred strategy is to invest in stocks that are undervalued but have solid long-term growth prospects. Sristi has a master's in Accounting and Finance and hopes to further her investment research and help investors.