The Greens Fit for your Basket - Archie Rankin
The UK government has recently published its ‘Green Energy Strategy’ with the Prime Minister stating that he wants Britain to become the ‘Saudi Arabia of wind’. Yes, it is happening. The much-needed transition to secure a green future is finally beginning to take hold, and heads are turning towards friendly firms and green investments, in a bid to get involved in this revolution. I’ve turned my head towards the top five investments I’d make at the moment, taking inspiration from the Renewable Energy Industrial Index (RENIXX) and leaders in major technology.
1) Tesla Inc (TSLA)
At the top of the list is, of course, Tesla (TSLA). The electric vehicle manufacturer, headed by free speech champion Elon Musk, has surged ahead in recent years, claiming a 13.8% share of the plug-in electric vehicle market in 2021. In his advocacy for free speech, Mr. Musk is certainly giving us something to shout about when it comes to green investment, in the third quarter of 2021, the company reported $2bn in operating income and delivered 308,600 vehicles globally by the fourth quarter. Despite some commentator grievances about the lithium used in the vehicles’ batteries, there is no doubt that Tesla is leading the charge into greenery with revolutions on the road.
2) NextEra Energy (NEE)
Taking the second-place podium is NextEra Energy, an electric power and energy infrastructure firm based in the US. The company boasted revenues of $21.27bn last year, and a pre-tax margin of 14.93%. As far as shareholder value goes, NextEra has an excellent reputation, returning roughly 700% over the past decade – tidy. The firm is also a distinguished member of the landed dividend gentry, increasing its pay-out to shareholders for more than 25 years. Boosted by continued investments in green solutions, the firm is expecting further dividend growth and an increase in annual earnings through to 2023. What’s that I hear you say? BUY!
3) Enphase Energy (ENPH)
These guys do it all; using big brain tech, Enphase delivers solar generation, storage and management on one platform, in fact, its so simple that we can get straight on to the financials. This tech saw the company’s second quarter revenue in 2021 increase by 11% to $351.5m in Q3, with over 1.7 million residential and commercial managed systems across the globe. The firm’s microinverters, which maximise the panels’ output, are compatible with near enough all panels out there, meaning collaborations with other participants are a definite possibility.
4) Ormat Technologies (ORA)
The Nevada headquartered company is one of the largest geothermal companies in the world, using heat from the earth to make clean power. Legislation changes around geothermal generation are likely to benefit the firm in the near future, but in the meantime, it is entertaining pre-tax margins of 15.62% (as of 2021). Ormat operates as a holding company, in electricity, energy and storage. It has serviced storage systems with retail energy providers and larger industrial customers.
5) SolarEdge Technologies (SEDG)
SolarEdge operates in the development of energy technology, aiming to maximise power generation using inverter solutions. The firm has seen exponential revenue growth in recent years, despite the logistics issues present, recording $526.4m in in the third quarter of 2021, a 10% increase from the previous quarter. The company’s inverter technology increases power generation whilst reducing the cost of energy produced by the PV systems. SolarEdge entertained a 9.53% pre-tax margin in 2021, with increasing optimism and confidence for the future.
So that’s your five. Of course, do your own homework, there are plenty of opportunities out there. Analysis indicates that green energy will be worth trillions, and there is no doubt that there is a green future ahead of us, making these companies and others wise long-term investments. Remember, greens help us grow!