5 Best Renewable Energy Stocks to Buy in November 2021

Renewable energy stocks have seen some momentum after the COP26. While the summit fell short of what many were expecting, it was nonetheless a move forward.

The global pivot towards renewable energy and a low carbon future is among the biggest transformations that we’ve witnessed in a while. While the transition towards green energy would help address the impending climate crisis, it is also creating attractive investment opportunities. Here are the five best renewable energy stocks that you can buy in November 2021.

1. SolarEdge Technologies (NYSE: SEDG)

SEDG is an attractive renewable energy play and makes inverters and power optimizers. These products help improve the DC power to AC power conversion of solar panels. The company released its third-quarter earnings earlier this month and reported record revenues of $526.4 million in the quarter while its GAAP income was $53 million.

Wells Fargo finds SEDG a good renewable energy stock to buy

Wells Fargo finds SEDG as a good renewable energy stock to buy and initiated coverage earlier this week with an overweight rating. “SEDG has a significant presence in commercial & industrial markets and is expanding to the utility market, which should support continued growth,” it said in its note.

SEDG stock looks bullish on the charts and trades above the 50-day and 200-day SMA (simple moving average). Last month, there was a golden cross formation in the stock after its 50-day SMA rose above the 200-day SMA. Currently, SEDG stock is trading at an NTM (next-12 months) PE multiple of 55.7x which is near its average multiple over the last year, but way above the long-term averages.

That said, the entire renewable energy space has seen an expansion of valuation multiples over the last year amid the global impetus towards a low carbon future. That said SEDG looks like a good renewable energy play. As the stock comes down amid the broader market meltdown, it would provide a good entry point.

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2. Sono Group (NYSE: SEV)

Sono Group makes solar-powered electric cars and is based in Germany. The stock listed earlier this month only and priced shares at $15, which was the midpoint of the price range. Meanwhile, the stock more than doubled on the listing day amid the momentum in electric vehicle stocks after the bumper listing from Rivian. It has however since come down.

SEV is an attractive renewable stock

Sono’s focus on solar-powered electric cars makes it an attractive renewable energy stock. The company would help address the criticism of electric cars that the electricity that powers them comes from fossil fuels. It is worth noting that despite all the green energy talks coal is still a major source of electricity generation, especially in emerging markets like India and China.

To be sure, Sono Group has to deliver on the execution part and several startup EV companies have faltered on execution. If the company can deliver on the execution, it could be a multibagger renewable energy stock.

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3. Enphase Energy (NYSE: ENPH)

Enphase Energy is another good renewable energy stock to buy in November 2021. It is the world’s leading supplier of micro inverter-based solar and battery systems and has shipped over 39 million microinverters so far.

Meanwhile, ENPH is also expanding in the EV charging industry and earlier this week 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 see ENPH as a good renewable energy stock to buy

Wells Fargo finds ENPH as another renewable energy stock worth buying. “We view ENPH’s primary competitive advantage as product innovation and software technology, both of which enable the various components of the solar system to interface seamlessly, provide product reliability, and allow the customer to monitor and optimize their system to their specifications through easy to use apps,” it said in its note.

Notably, while Wells Fargo is bullish on ENPH and SEDG, it initiated First Solar stock at equal weight. Meanwhile, ENPH stock trades at an NTM PE of 92x which is above that some of the other renewable energy stocks. However, the high multiples are backed by strong growth too and analysts expect the company’s sales to rise 76.8% this year and 40.6% next year.

Overall, if you are looking to build a portfolio of renewable energy stocks, ENPH should definitely be on your radar. It is also the biggest holding for the Invesco Solar ETF.

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4. EVgo (NYSE: EVGO)

When thinking about renewable energy stocks, it would be prudent to look at EV charging stocks as well. The sector saw a rally after the bipartisan infrastructure bill was passed. Meanwhile, EVgo stock has since come down and the fall looks like a good buying opportunity.

EVgo is a charging stock to play renewable energy

EVgo has the largest network of fast chargers in the US. The company’s partnership with OEMs like General Motors and ride-hailing companies like Uber would also add long-term value. Notably, the charging infrastructure in the US would need to rise significantly for EV adoption to rise. Here is where companies like EVGO fit in.

EVgo’s valuations now look reasonable after the crash. Consensus estimates call for an upside of 35% over the next 12 months. That said, if you want to play the renewable energy sector with an EV charging stock, EVGO looks among the best bets.

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5. iShares Global Clean Energy ETF (NYSE: ICLN)

If you want to build a portfolio of renewable energy stocks without having to worry about selecting and buying individual stocks, you can consider an ETF. ETFs can be a good investing strategy especially for investors who lack the time or analytical skills to pick individual stocks. The charges in an ETF are much lower than active funds, which is among the prime reasons for their popularity.

ICLN is a good renewable energy ETF

ICLN is a good ETF that gives diversified exposure to renewable energy stocks across the world. The fund has an annual expense ratio of 0.42% but is trading with a YTD loss. ENPH is the largest holding for ICLN while fuel cell giant Plug Power is the second-largest holding.

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