5 Best Renewable Energy Stocks to Buy in October 2021

Renewable energy is among the most promising investing themes for the next decade. Countries across the world are transitioning towards green energy. Meanwhile, green energy stocks have looked weak in 2021 after the strong rally last year.

However, given the positive long-term outlook for the sector. Some of the renewable energy stocks look good buys. Here are five such stocks that you can buy in October.

1. First Solar (NYSE: FSLR)

First Solar stock has rebounded sharply from its 2021 lows and is now up 7% for the year. The stock is trading near its 52-week high prices. The company has been in the solar business for decades unlike some of the newly formed solar companies. The company is investing to expand its capacity and the investments would add long-term shareholder value.

FSLR is a good renewable energy stock in the solar industry

FSLR looks like a good renewable energy stock to buy and play the solar industry. Meanwhile, Wall Street analysts are not too bullish on the stock and its median target price of $102 is a discount of 6% over current prices.

The current valuations for FSLR stock look higher than the historical average. However, that’s reflective of the re-rating in the renewable energy stocks. However, FSLR if you are looking to buy a renewable energy stock for decades, FSLR looks a good bet even at these prices.

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2. Canadian Solar (NYSE: CSIQ)

Canadian Solar is a diversified solar company. Along with producing solar panels it also undertakes solar projects. The company’s revenue mix is geographically diversified and almost half of it comes from Asia while North America accounts for little above a third. Analysts expect the company’s revenues to rise 65% this year. While the growth is arguably coming from a low base, it nonetheless looks encouraging. Next year, analysts expect its revenues to rise 13.2%.

Wall Street finds CSIQ a good renewable stock to buy

CSIQ stock has lost over a quarter of its market cap this year and is not too far from its 52-week lows. Meanwhile, consensus estimates call for an upside of almost 31% from these levels. Overall, analysts have a split rating on this renewable energy stock and it has three buys, four hold, and one sell rating.

Meanwhile, after the crash from the peaks, CSIQ looks reasonably valued and trades at an NTM (next-12 months) EV-to-EBITDA multiple of a little above 7x.

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3. Atlantica Sustainable Infrastructure (NYSE: AY)

Atlantica Sustainable Infrastructure stock is down almost 5% for the year but has come off its 2021 lows. The company manages a portfolio of green energy assets. With a dividend yield of 4.6%, AY is one renewable energy stock that should be on your radar in October 2021.

Looking at the consensus estimates, four analysts polled by CNN Business rate AY stock as a buy while the remaining five rate it as a hold. The stock’s median target price of $42.50 is a premium of over 13%.

AY is a high yielding renewable energy stock

Usually, renewable energy companies don’t have high dividend yields as they are investing money for growth. However, AY looks like a good bet if you are looking for a renewable energy stock with a high dividend yield.

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4. FTC Solar (NYSE: FTCI)

FTC Solar went public earlier this year and priced the IPO at $13 which was way below the initial price range of $18-$20. The stock went on to hit a high of $15.76 but currently trades around $8. The steep fall in FTSI looks like a good buying opportunity.

The company is a niche company in the renewable energy space. It offers solar tracking systems which it says “significantly increase energy production at solar power installations by dynamically optimizing solar panel orientation to the sun.”

The company is growing fast and analysts expect its revenues to rise 66% this year and 83% next year. The company is currently posting losses but analysts expect it to turn EBITDA positive in 2022.

FTCI is a niche renewable energy stock

Overall, FTCI looks a niche way to play the renewable energy industry. Apart from having renewable energy producers, you can also diversify the portfolio by adding a niche name like FTC Solar.

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5. Sunnova (NYSE: NOVA)

Sunnova stock is down over 10% for the year. However, BMO believes it is among the best renewable energy stocks to buy. “NOVA offers exposure to the fast-growing U.S. residential solar market that is energized by government policy goals, EV adoption, and demand for energy storage,” said BMO in its note.

Wall Street analysts are in general bullish on NOVA stock and it has 17 buys, one hold, and one sell rating. Its median target price of $52 is a premium of 29% over current prices. With a stable cash flow model, NOVA is among the renewable energy stocks that should be on your watchlist in October 2021.

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