3 Best Renewable Energy Stocks to Buy in July 2024

As hydrocarbons continue to power the world, green and sustainable infrastructure is increasingly showing its strength. In full disclosure, the idea that all energy sources will be sustainable may be a stretch. Nevertheless, the sector is booming, and as investment grows, it’s worth considering the best renewable energy stocks.

Essentially, the narrative comes down to scientific reality. The overwhelming majority of scientists agree that climate change is real. Furthermore, Earth is virtually the only planet that can sustain human life. We need to be good stewards of our home. To promote zero-emissions goals and other climate initiatives, renewable infrastructure will be part of the conversation.

Second, thanks to innovations like artificial intelligence, global energy demand has only increased. Because of this dilemma, green and sustainable energy infrastructure will almost be included in the broader conversation due to the need for more supply. Combined with the political and ideological winds favoring the movement, these top renewable energy stocks stand on fertile ground.

NextEra Energy (NEE)

Being subject to the broader regulated energy services sector, NextEra Energy (NYSE:FROM HOME) through its subsidiaries generates, transmits, distributes and sells electricity to retail and wholesale customers in North America. It generates this energy through various means, including wind, solar, natural gas and nuclear power. It also develops and operates assets under long-term contracts.

I can’t say NextEra is the most exciting idea among the best renewable energy stocks. But it makes the list in part because of its status. It’s also a consistent financial performer. Over the past four quarters, the company has posted an average earnings per share of 81.3 cents. That print translates to an average earnings surprise of 9.53%.

Over the last 12 months (TTM), EPS was $3.66 on revenues of $27.13 billion. In the last quarter, the year-over-year growth rate of EPS and sales was 8.7% and decreased by 14.7%, respectively.

For fiscal 2024, experts predict EPS growth of 7.6% to $3.41. Revenue could decline by 1% to $27.85 billion. Despite this, let’s not ignore the projected annual dividend yield of 2.92%.

Ormat Technologies (ORA)

One of the most intriguing names among the top renewable energy stocks, Ormat Technologies (NYSE:ORA) specifically falls into the renewable energy sector. The company specializes primarily in geothermal and recovered energy. It also has an energy storage business unit. The real long-term source of income, however, may be the geothermal unit, which involves extracting practical energy from the Earth’s core.

The key advantage of geothermal infrastructure—apart from the fact that the earth produces virtually unlimited energy—is that it is largely out of sight, out of mind. That’s in contrast to the ugly wind turbines that are an eyesore for surrounding neighborhoods. Geothermal is currently a more speculative mechanism. Still, Ormat’s financials are quite healthy, with earnings surprises of nearly 22% over the past four quarters.

During the TTM period, Ormat generated EPS of $2.21 on revenue of $868.36 million. In the latest quarter, it reported earnings and revenue growth of 32.9% and 21%, respectively. Analysts are forecasting a slight decline in EPS to $2.04 in fiscal 2024. However, the top line could increase by 7.6% to $892.1 million.

Clearway Energy (CWEN)

One of the more speculative ideas among the best renewable energy stocks to buy is Clearway Energy (NYSE:CWEN) is largely suited to those who want to make big decisions. Part of the renewable utilities ecosystem, Clearway offers a mix of conventional and renewable energy projects. The mix consists primarily of wind, solar, and natural gas.

CWEN stock is down more than 11% in equity value since the beginning of the year. It’s down almost 16% in the last 52 weeks, which doesn’t give a lot of confidence to potential investors. At the same time, there could be a case that Clearway is currently undervalued. The stock is currently trading at 2.19X sales over the past year. Between Q1 2023 and Q1 2024, the average price-to-sales ratio was 2.42X.

Still, it’s a risky proposition. Clearway’s TTM net income came in at $77 million on revenue of $1.29 billion. However, the latest quarterly sales growth was down almost 9%. Nevertheless, analysts rate CWEN a Strong Buy consensus with an average price target of $31. That implies almost 29% upside potential.

Finally, the projected dividend yield of 6.81% may attract gamblers.

As of the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the author’s own, subject to InvestorPlace.com Publication Guidelines.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.