Renewable Energy Rockstars: The 3 Hottest Stocks to Watch in 2024

Stock Market

The green revolution is making our future look clean and green. IEA’s new World Energy Outlook 2023 states that the world is set to change significantly by 2030. It also adds that the share of renewable energy will be 50% of the global electricity mix. Renewable energy is the way to go ahead and, although these energy stocks had a rough year and the companies couldn’t impress investors, it is time to reconsider them. The companies discussed here benefit from government subsidies, which allow for higher revenue and profitability. With the inflation cooling and the much-anticipated rate cuts coming soon, it is a smart move to look into the renewable energy stocks that have the potential to thrive as the economy improves.  

Brookfield Renewable Partners (BEP)

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I have written about Brookfield Renewable Partners (NYSE:BEP) many times in the past, and it is still a favorite. It has a diverse portfolio of renewable energy sources including wind, hydroelectric, solar and distributed energy. It holds over $800 billion in assets under management which transforms into 120 gigawatts of capacity. Additionally, it has 100 GW worth of projects that are under development. 

This is why the company will remain relevant for the years to come. It also has a wide asset base which can help with the endeavors and ensure steady revenue. It is on track to achieve an output of 5,000 megawatts in the year. 

Trading at $25, the stock looks highly undervalued to me and is one of the best buys at the current level. It has generated over 65% returns in the past five years and may have slowed down currently due to macroeconomic factors, but it remains relevant. The company is investing in the business and has allocated $2.2 billion in capital in the third quarter. 

It had a successful quarter and managed to bring down the losses. I believe the stock can outperform shortly, but do not expect an immediate upside. Once the market conditions improve, the interest rates come down and our shift towards renewable energy becomes obvious, this is one stock that will soar higher.

First Solar (FSLR)

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I think the worst is over for First Solar (NASDAQ:FSLR), and the company is bouncing back strong. The company could benefit from Government subsidies, low-interest rates and a high demand for clean energy. First Solar suffered in 2023, but it still managed to report a revenue of $3.2 billion and reported a profit. This shows its potential to sail through a tough economy. The company also showed an increase in earnings while expanding revenue. 

First Solar is working on a manufacturing site in Louisiana worth $1.1 billion. The Ohio and Alabama facilities are also undergoing an update which is expected to finish in 2024. In October 2023, the company held a backlog of 81.8 GW. Over the past two quarters, the company has grown the gross profit, operating profit and seen a strong increase in the asset base. 

The company has a 15-year Power Purchase Agreement with a manufacturing unit in India and this will ensure steady revenue in the years to come. While the stock isn’t cheap and is trading at almost $152 today, it is down 14.7% over the past year. The stock is trading much lower than the 52-week high of $232 and can soar over $200 this year. It might not be cheap for a long time. 

NextEra Energy (NEE)

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One of the top renewable energy stocks today, NextEra Energy (NYSE:NEE) is a renewable energy and utility company. It is the largest renewable energy utility in the U.S. and this ensures a steady flow of income throughout the year. NextEra Energy has an impressive backlog of 21 gigawatts and has seen an impressive third quarter. 

NEE enjoys a dividend yield of 3.07% and it has increased dividends for 28 years. Exchanging hands for $61.04 today, the stock looks undervalued to me. It has dropped 28% in the past year but is on an upward momentum since October. As the economy improves, we could see the stock perform better. For a stock trading at $61, an annual dividend of $1.88 isn’t bad at all. 

The company is set for earnings growth and we could see it report higher revenue and profit throughout 2024. As the Federal Reserve cuts the interest rates, we could see an improvement in dividend payouts too. Citi analysts have a buy rating for the stock while Guggenheim has a price target of $70 with a buy rating. NEE is a passive income stock and one that you should buy and hold forever. 

On the date of publication, Vandita Jadeja 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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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