5 Best Renewable Energy Stocks to Buy in December 2021

Renewable energy stocks have been quite volatile over the last 15 months. There was a splendid rally last year after Joe Biden’s election. The momentum continued this year and the sector looked strong in January. However, renewable energy stocks came under pressure thereafter amid the sell-off in growth stocks.

While the COP26 fell short of what green energy enthusiasts were hoping, it was nonetheless a step forward, and there was a broad-based rally in renewable energy stocks in November.

Now, the stalemate over President Joe Biden’s ambitious BBB (Build Back Better) plan has led to a sell-off in green energy stocks. Investing in green energy was among the major promises that Biden made in the election campaign. While the bipartisan infrastructure bill has an outlay for EV (electric vehicle) charging stations, the BBB would have been the real game-changer for the green energy sector in the US. As 2021 draws to a close, here are the five renewable energy stocks that you can buy.

1. Hannon Armstrong (NYSE: HASI)

Hannon Armstrong is a REIT that makes investments in climate solutions. The company has a diversified portfolio and has almost 260 investments with an average investment of $13 million. The stock has come off its highs and at current prices, its dividend yield is 2.6% which is almost twice that of the S&P 500’s dividend yield.

HASI is a dividend-paying renewable energy company

Renewable energy companies generally don’t pay dividends. Almost all of them are investing in growth and dividend is out of the question for them. While renewable energy companies are prone to supply chain issues and continued policy uncertainty, HASI can be a good bet especially for those investors who are looking at renewable energy stocks with a high dividend yield.

68% of all retail investor accounts lose money when trading CFDs with this provider.

2. Array Technologies (NYSE: ARRY)

Array Technologies is a play in the solar energy industry and makes ground mounting systems for large solar energy projects. Earlier this year, Goldman Sachs had listed the stock as among the best renewable energy companies in North America. JPMorgan is also bullish on the stock and has listed it as a top pick for 2022.

The stock fell sharply last month after it announced the issuance of $375 million in debt to finance an acquisition. Meanwhile, if you are looking to buy a high-growth renewable energy stock at an attractive valuation, ARRY should be on your radar.

68% of all retail investor accounts lose money when trading CFDs with this provider.

3. Atlantica Sustainable Infrastructure (NYSE: AY)

Atlantica Sustainable Infrastructure stock is down almost 7% for the year and has come off its 2021 lows. The company manages a portfolio of green energy assets. With a dividend yield of 4.8%, AY is one renewable energy stock that should be on your radar. While the company’s portfolio has both renewable and non-renewable assets, over three-fourths of its revenues in the September quarter came from renewables.

AY is an attractively valued renewable energy stock

Atlantica Sustainable Infrastructure has diversified operations and apart from the Americas, it also has operations in Europe, Africa, and the Middle East. The stock trades at an NTM (next-12 months) PE multiple of 34.1x which looks attractive. The stock has a median target price of $42 which is a premium of almost 16% over current prices.

68% of all retail investor accounts lose money when trading CFDs with this provider.

4. Enphase Energy (NYSE: ENPH)

Enphase stock is up almost 10% for the year and looks like a good renewable energy stock to buy for 2022. It is the world’s leading supplier of micro inverter-based solar and battery systems. The company has shipped over 39 million microinverters which is a remarkable achievement.

Meanwhile, ENPH is also expanding in the EV charging industry, and earlier this year it announced the acquisition of ClipperCreek, which provides EV charging solutions. There has been a splendid rally in EV charging stocks after the $1 trillion bipartisan infrastructure bill was passed. Analysts expect the company’s revenues to rise over 40% in 2022.

Jim Cramer finds ENPH a good renewable energy stock

Jim Cramer is bullish on ENPH stock and finds it a better stock as compared to EV charging company EVgo. Citi and Roth Capital are also bullish on ENPH stock and find the stock attractive after the recent crash. “We would recommend accumulating shares opportunistically as we expect ENPH to outperform in 2022,” said Roth Capital’s analyst Philip Shen in a client note earlier this month.

68% of all retail investor accounts lose money when trading CFDs with this provider.

5. Maxeon (NYSE: MAXN)

Maxeon was spun off from SunPower in 2020 only and makes solar panels. The stock has had a dismal ride as a publicly-traded company. After a weak 2020, it has continued to fall in 2021 also and is currently down over 50% for the year. Meanwhile, Bank of America finds value in this beaten-down renewable energy stock.

“We believe too much of the focus and the recent stock performance has been tied to the sentiment and expectations around the BBB (Build Back Better),” said Bank of America analyst Dumoulin-Smith. He added, “MAXN still has an underlying core of the business that is slated for a turnaround by YE22. The brokerage believes that MAXN offers a good entry point after the crash and the market concerns over the balance sheet are unfounded.

MAXN looks like a renewable stock worth betting on

“While some investors have expressed concerns over the cash constraints, we believe that the core business is self-sufficient over the next twelve months in terms of the cash needs, which de-risks the balance sheet,” said the note.

The growth outlook for MAXN stock looks positive and analysts are forecasting a sharp increase in sales over the next couple of years. Wall Street analysts have a mixed opinion on the stock and it has two buys, one hold, and one sell rating. Its median target price of $20 is a 37% premium over current prices.

All said renewable energy is among the most promising investing theme for the next decade. Chamath Palihapitiya believes that the world’s first trillionaire would come from the green energy industry. Bill Gates also believes that the sector would create several giant companies like Tesla and Microsoft.

While renewable energy companies would help address the climate change crisis, it is also an exciting investment opportunity for investors.

Buy MAXN Stock at eToro from just $50 Now!