3 best solar stocks to buy now
A number of factors are fueling the need for new solar projects, including business buyers, state demands, coal-fired power plant withdrawals, and falling equipment and construction costs. The rise of sophisticated storage assets has also made solar power more attractive, as more solar storage projects can store energy for use when the sun is not shining. The US Energy Information Administration expects 13.5 gigawatts (GW) of solar capacity to be commissioned in 2020, surpassing the previous record of 8 GW in 2016.
Here’s a growing solar module maker, utility, and oil company that perhaps deserves a closer look.
The innovator of high-tech modules
Canadian solar (NASDAQ: CSIQ) is a large-scale solar panel manufacturer that has delivered over 38 GW of modules to customers in over 150 countries since the company was launched in 2001. The company is active in many phases of the solar value chain, owning, operating and selling large-scale projects as well as the supply of residential solar installations. Canadian Solar’s recurrent energy development unit also has approximately 7 GW of solar and storage projects under development in the United States.
The company underperformed the S&P 500 over the past decade and the company has struggled to generate returns. He’s also seen his debt-to-equity ratio climb to 63%, so there is certainly work to be done to put the company on a more stable financial footing. But Canadian Solar has taken steps to address these challenges and recently implemented new initiatives to maximize shareholder value. The company has expanded its board of directors, adding a new director and bringing in a seasoned energy investor as a strategic advisor.
The board member is Lauren Templeton, the founder of Tennessee-based investment boutique Templeton & Phillips Capital Management and the niece of value investing pioneer Sir John Templeton. The advisor, Karl E. Olsoni, has over 30 years of experience in the energy industry, with previous terms as CFO of PPM Energy and Koch Materials and over 16 years of working with Southern Company as she developed her independent electricity business.
Investors should consider the business now based on these initiatives as well as the introduction of new technology this should fuel further significant sales, as evidenced by a multi-year module supply agreement announced earlier this month. The company has reached an agreement with Lightsource BP, a subsidiary of the British oil giant PA, to supply 1.2 GW of its new high efficiency polycrystalline solar modules for projects in the United States and Australia. The deal covers so-called bifacial modules, which generate power from both the front and rear to increase power output and reduce the cost of electricity.
The solar storage game
AES Company (NYSE: AES) deserves a look as the company has shown that it understands the importance of combining solar projects with storage, and these hybrid projects are increasingly in demand. The company is active in the production, transmission and distribution of renewable and traditional energy in 14 countries and has developed solar technologies and solar projects and storage since 2009. Earlier this year, the company opened the world’s largest solar-powered battery plant on the Hawaiian island of Kauai.
Solar development is only one part of what AES does, but it has grown and has had a positive impact on shareholder bottom lines. The company posted adjusted earnings of $ 0.48 per share in the third quarter, an increase of $ 0.13 from the third quarter of 2018, and attributed the increase to contributions from companies, including US renewables. The company also expects growth to come from a recently formed 10-year strategic alliance with Alphabet develop and implement solutions to enable wider adoption of clean energy. The company said in an investor presentation in December that it was forecasting capital expenditures of $ 1.5 billion for its project backlog and power purchase contracts planned for the period 2019-2022, and its order book of over 6 GW is split 50/50 between wind and solar power.
With a market capitalization of over $ 13 billion and a dividend yield of over 2%, an investment in AES would offer investors a chance to embark on solar and battery development with the benefit of sources. more traditional revenues based on public services.
The oil major with a solar subsidiary
Total SA (NYSE: TTE), a French oil major, is probably not the first name that comes to mind when most people think of renewables. But the company has stakes in more than 3 GW of renewable energy in operation and has large-scale solar installations in Japan, South Africa, the United Arab Emirates and Chile. The company also owns a majority stake in SunPower, a commercial and residential solar developer that continues to face high debt, but has improved its financial condition over the year, resulting in an increase in the share price of more than 50%.
Solar power is only a small part of the bigger picture for Total, as the company has a market cap of over $ 130 billion and a huge pool of assets in several companies across the globe. The company had mixed results from its multiple lines of business in terms of year-over-year revenue, with its exploration and production, refining and marketing segments declining, while the unit gas, renewables and electricity have seen an increase. But with a dividend yield of over 6% and an 8% increase in free cash flow for 2019, the company represents an opportunity for the most conservative investor to benefit from the rise in solar, but also to diversify oil and gas, petrochemical and other renewable assets sectors.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.