5 Best Renewable Energy Stocks to Buy in September 2021

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 US took a step back from its commitments, President Biden has pledged his support to address climate change.

Biden has re-joined the Paris Climate Deal and the administration has taken several measures to increase the adoption of renewable energy. Globally also governments are taking different measures to increase the adoption of green energy. Meanwhile, renewable energy stocks have come down sharply from their highs. Here are five of the best renewable energy stocks that you can buy in September 2021.

1. Canadian Solar (NYSE: CSIQ)

Canadian Solar is a diversified solar company and is among the best renewable stocks to buy in September. 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.  The stock has fallen almost 33% in 2021.

Currently, CSIQ trades at a discount of almost 48% from its 52-week highs that it earlier this year and has a market cap of only about $2.1 billion. However, the crash looks like an opportunity to buy this renewable energy stock at attractive valuations.

CSIQ is an attractively valued renewable energy stock

CSIQ trades at an NTM (next-12 months) PE multiple of 17.7x. While a lot of renewable energy stocks still trade at exorbitant valuations, Canadian Solar’s valuations look attractive. The company’s revenues are growing in double digits and analysts expect them to rise 65.2% this year and 13.2% next year.

Wall Street analysts have a bullish forecast for CSIQ and consensus estimates call for an upside of 45.7% over the next 12 months. If you are looking at a reasonably valued renewable energy stock with a decent growth outlook, CSIQ would fit the bill.

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2. Brookfield Renewable Partners (NYSE: BEP)

Brookfield Renewable Partners is majority-owned by Brookfield Asset Management company. The company has a portfolio of renewable energy assets that are spread across the world. BEP gives a diversified exposure to green energy and has solar, wind, as well as hydroelectric projects as part of its portfolio. The company also has energy storage operations.

The stock trades at an NTM EV (enterprise value)-to-revenue multiple of 8.85x. Wall Street analysts have a split rating on the stock and it has four buys and five hold ratings. The stock’s median target price of $39.17 is similar to the current stock prices. However, its street-high target price is $46.

BEP is a good play on the global renewable energy industry

BEP stock is down 11.5% so far in 2021. If you are looking to play the renewable energy sector through a globally diversified company, BEP stock looks like a good bet. The stock is looking bearish on the charts and trades below the 50-day and 200-day SMA (simple moving average). The stock has been facing resistance at the 50-day SMA and if it can cross above the trendline, it can move higher.

Overall, Brookfield Renewable Partners looks like a good renewable energy stock to have in your portfolio and bet on the global pivot towards green energy.

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3. Enphase Energy (NYSE: ENPH)

Enphase Energy stock rose over 550% last year and also joined the S&P 500 Index. Tesla also joined the S&P 500 index as the index added green energy stocks to the index to make it look more relevant under the changed dynamics. Meanwhile, after a strong 2020, ENPH stock has looked weak in 2021 and is down 8.2% for the year.

KeyBanc sees ENPH as a good renewable energy stock to buy

While ENPH stock has sagged in 2021, KeyBanc sees better days ahead for this renewable energy stock. It initiated coverage on the stock earlier this week with an overweight rating and $179 target price.

“We like ENPH’s strong core microinverters business, where the Company enjoys significant market share and is well positioned to capitalize on the robust growth in the U.S. residential solar market. While ENPH’s nascent storage … business does not at present enjoy a similar competitive position, we view it as a solid addition to the growth engine provided ongoing operational and financial discipline,” it said in its note.

ENPH is a renewable energy stock worth buying for long term

Enphase Energy’s top line is growing at a fast pace. Analysts expect the company’s revenues to rise 72.3% in 2021 and 34.3% in 2022. The company produces microinverters which are a key part of the solar energy ecosystem.

KeyBanc is also constructive on the long-term forecast of ENPH. It said, “Broadening into complementary and adjacent products should enhance ENPH’s long-term growth profile, in our view. The Company continues to innovate in its core business, as well as expanding the scope of its product offerings.”

The stock might look somewhat overvalued with an NTM PE multiple of 68.7x. However, markets are giving a premium to the stock anticipating a tectonic shift towards renewable energy. Overall, ENPH looks like a good renewable energy stock to buy and play the solar energy industry.

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4. SolarEdge Technologies (NYSE: SEDG)

SolarEdge Technologies is an Israel-based producer of power optimizers, solar inverters, and monitoring systems. While the stock has lost 9.4% so far in 2021, it has delivered good returns since its listing. The company became the largest solar inventor company last year. The company’s revenues are expected to rise 34.8% this year and 29.5% next year.

The stock trades at an NTM PE of 46.3x. The multiples have averaged 56.7x over the last year. However, like most other renewable energy stocks, SEDG trades at a significant premium to its long-term averages. The stock’s forward PE multiples have averaged 33.6x over the last three years. Since its listing in 2014, the multiples have averaged 23.8x.

However, markets have rerated renewable energy stocks over the last year anticipating a faster shift towards green energy. SEDG stock looks like a good renewable energy stock to buy amid the global pivot towards renewable and solar energy.

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5. NextEra Energy (NYSE: NEE)

NextEra Energy is the world’s largest utility company and has 45,500 megawatts of net generating capacity. The company is also a play on renewable energy and is the largest wind and solar energy producer globally. Earlier this year, Goldman Sachs identified NEE as a top renewable energy stock to buy.

NEE stock forecast

NEE stock has gained 10.4% so far in 2021 and consensus estimates call for an upside of 10% over the next 12 months. Its street high target price of $103 is a premium of over 25%. Overall, of the 22 analysts covering the stock, 15 rate it as a buy while six have a hold rating. One analyst has rated NEE stock as a sell.

While most renewable energy stocks don’t pay dividends, NEE has a dividend yield of 1.9% which is higher than the S&P 500’s dividend yield. The stock currently trades at an NTM PE of 32.7x. If you are looking for a dividend-paying renewable energy stock, NEE looks like a good bet.

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