Green Energy Gambles: 7 Speculative Plays for the Planet-Conscious Investor

Stocks to buy

Speculative green energy stocks could come back into vogue this year. Many countries around the world are far behind their carbon emissions targets, and the urgency to address the climate crisis may energize investment in these companies.

Also, government incentives and policies favor speculative green energy stocks. This regulatory support can boost the profitability of companies working on cutting-edge renewable energy technologies. 

The benefit of this renewed focus is that there are a handful of speculative green energy stocks that could see a surge in share prices this year. I see a lot of potential for companies in this industry due to them trading at relative discounts to their long-term potentials. The possibility of gains for investors therefore is strong.

So with this thesis in mind, here are seven speculative green energy stocks that investors should keep on their radars for May this year.

First Solar (FSLR)

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First Solar (NASDAQ:FSLR) specializes in manufacturing photovoltaic solar panels and is a leading provider of utility-scale PV power plants globally. The company is dedicated to producing eco-efficient solar modules, contributing significantly to the renewable energy sector.

FSLR is projected to have a strong performance in 2024, with its financial outlook indicating net sales between $4.4 billion and $4.6 billion, and earnings per share expected to range from $13 to $14, a strong performance.​ 

This follows a positive start to the year, as evidenced by their first quarter earnings report for 2024, where they beat expectations with $2.20 earnings per share and revenue of $794.10 million, up 44.8% from the same quarter last year​.

Additionally, earnings are expected to grow substantially, with a forecast of $21.20 per share by the next year, indicating a strong future performance. This also comes with a “Strong Buy” rating via analysts, which suggests that its stock price could appreciate substantially in the short-term relative to peers in its industry.

NextEra Energy (NEE)

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NextEra Energy (NYSE:NEE) stands out as the world’s largest producer of wind and solar energy, with significant investments in renewable projects. Known for its substantial clean energy contributions, NextEra is also committed to achieving a zero emissions target by 2045.

NEE reported a solid start to 2024, with first-quarter earnings of $0.91 per share, surpassing the expected $0.80 per share. The company’s revenue for the quarter was $5.73 billion, although this was below the anticipated $6.28 billion​.

For the full year of 2024, NEE has projected its adjusted earnings per share to be between $3.23 and $3.43, anticipating an annual growth rate of 6% to 8% through 2026​. Analysts have set future expectations for NEE’s earnings to increase to $3.68 per share by next year​.

Adding either NEE or FSLR to one’s portfolio could give an investor a solid footing for exposure to the solar energy market, which will be pivotal to the world’s transition to cleaner energy sources.

Cameco (CCJ)

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Cameco (NYSE:CCJ) is one of the world’s leading uranium production companies, primarily mining and selling uranium concentrate. Although not traditionally categorized under renewables, nuclear energy is seen as a crucial clean energy source for future carbon neutrality.

CCJ outlined a positive outlook for 2024, driven by strong performance in its uranium and nuclear fuel segments. The company reported an increase in uranium production in the first quarter. They expect to maintain production levels at their McArthur River/Key Lake and Cigar Lake operations.

Financially, Cameco is focused on maintaining a strong cash position and reducing debt. They have already made significant repayments on their term loans and plan to refinance a senior unsecured debenture to further strengthen their balance sheet​.

Nuclear power should be considered in the green energy mix, as renewables alone would likely require too much of a footprint in order to replace thermal coal entirely. Advancements into nuclear fusion could also lead the world into a new energy era, which scientists have begun to make substantial progress on.

Plug Power (PLUG)

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Plug Power (NASDAQ:PLUG) is a pioneer in the hydrogen fuel cell technology that powers electric motors, particularly in the logistics and transportation sectors. PLUG is about as speculative as one can get, as it has recently shaken off doubts that it may not remain a going concern in the business, citing significant cash burn issues.

PLUG therefore is a polarizing pick, but it definitely fits under the category of a green energy gamble.

The company has successfully expanded its hydrogen production capabilities, with two of its plants in Georgia and Tennessee reaching full operational capacity. Additionally, their Louisiana plant is expected to achieve mechanical completion by the third quarter of 2024. 

Financially, PLUG is focusing on strengthening its cash management and has implemented a strategic plan to cut operational expenses by $75 million annually.  Despite these measures, PLUG reported a substantial net loss in its latest quarterly results.

Still, given the potential upside for holding PLUG shares, one could make a significant windfall if their bet on PLUG pays off.

Array Technologies (ARRY)

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Array Technologies (NASDAQ:ARRY) manufactures ground-mounting systems used in solar energy projects. Their technology improves the efficiency of solar systems by optimizing the position of photovoltaic panels to increase energy production.

For the upcoming year, ARRY has projected its revenue to be between $1.25 billion and $1.4 billion. If one wants to invest in the solar industry, ARRY may be a good option due to it providing the “picks and shovels” that enable solar panels to reach full efficiency.

In financial terms, Array Technologies reported a strong performance for the full year 2023, with net income reaching $86 million and a record adjusted EBITDA of $288 million. This improvement is driven by robust structural gross margins and the realization of specific financial benefits, positioning the company for a third consecutive year of adjusted EBITDA and margin growth​

At just $12.55 per share, ARRY also provides great potential upside for investors.

Clearway Energy (CWEN)

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Clearway Energy (NYSE:CWEN) operates a broad range of wind, solar, and natural gas facilities across the U.S. I like CWEN due to this diversification of energy sources, as investors then don’t have all of their eggs in one basket.

CWEN recently reaffirmed its financial guidance for 2024, projecting a Cash Available for Distribution (CAFD) of $395 million. This outlook is built on the expectations of contributions from committed growth investments and estimates for merchant energy gross margins.

Furthermore, CWEN continues to target an annual dividend per share growth in the upper range of 5% to 8% through 2026. This growth strategy does not anticipate the need for external capital, relying instead on internal operational efficiencies and the execution of strategic contracts. The company pays a dividend yield of around 6% at the time of writing, and it has 4 consecutive years of dividend growth under its belt. 

It should be noted though that this high yield comes with adrawback: namely its payout ratio is unsustainably high at 240% at the time of writing. Surprisingly, despite this high payout of cash to shareholders, its stock price has increased 64.64% over the past five years.

Constellation Energy (CEG)

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Constellation Energy (NASDAQ:CEG) delivers electric power and energy management services across the U.S., with a robust emphasis on expanding its carbon-free nuclear and renewable energy resources.

CEG is another one of those risky yet diversified green energy gambles for investors to consider adding to their portfolios. This is underpinned by  a strong outlook for 2024, with a guidance range for Adjusted Operating Earnings per share between $7.23 and $8.03. This forecast is supported by stable revenues from the nuclear production tax credit, which is expected to underpin consistent and growing earnings. 

There are some exciting developments in the works for CEG investors. This includes growing its nuclear fleet and renewable energy capacity, which aligns with increasing demand for reliable, carbon-free energy. Additionally, the company is committed to returning value to shareholders through significant dividend growth and share repurchases. CEG pays a 0.65 dividend yield, but it has been growing it aggressively over the past three years, with a 50% to 100% dividend growth increase rate over the period.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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