"Renewable energy stocks have the potential to deliver immense returns for investors, all the while creating a positive environmental impact to our world. The popularity of such stocks therefore comes as no surprise given the publicity around climate change and will only continue to grow as environmental-focused discussion is pushed to the fore", explains
With this in mind, Maxim sheds light on some of the top renewable energy stocks, how investors can determine good, green investments, and the initial public offerings (IPOs) to watch out for in 2021.
Renewable energy stocks: which ones are top for value, growth, and momentum?
1. The alternative energy stocks with the best value are those which have the lowest price to earnings (P/E) ratio. As shareholders may get their earnings back as dividends or buyouts, a low P/E means you pay less for each dollar earned.
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2. The alternative energy stocks with the best growth have the largest earnings per share (EPS) value posted over the latest quarter, YoY. Essentially, more money spent means the business is growing and cash is reinvested or paid to shareholders.
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3. The alternative energy stocks with the best momentum have the largest total income over the last 12 months.
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How can investors find good renewable energy investments?
Renewable energy companies generating free cash flow and good balance sheets have a competitive edge over the financially weaker ones, as such companies have better access to capital to invest in further growth. Investors should also look towards companies that invest in potentially profitable renewable energy projects, as well as those that manage capital in a way to maintain a good financial portfolio.
How fast is green energy growing?
Green energy is growing exponentially. According to the
Solar energy will mostly be driving this growth, as it is expected to be cheaper than creating new gas or coal plants in most countries. In fact, solar plants are one of the cheapest ways ever invented to generate energy. Wind energy and other low carbon sources are also considered as potentially successful by the EIA, as the world is becoming green-energy friendly. One issue here, however, is the financing, as green energy needs more investment than existing capital. Then again, those with a keen eye will look at this as an opportunity instead.
Three hottest renewable energy IPOs in 2021
1. China Three Gorges Renewables (Group) is a part of the
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3. Infinite
If you would like to learn more about the top renewable energy IPOs in 2021, you can do so by downloading the Freedom24 app or visiting the
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