The alternative energy sector is comprised of companies that engage in the generation, distribution, and sale of renewable and clean energy, as well as related products and services. Examples of alternative energy sources include solar, wind, hydroelectric, and geothermal. The growing list of names in the sector includes companies like Israel-based SolarEdge Technologies Inc. (SEDG), Brazil-based Companhia Energetica de Minas Gerais (CIG), and First Solar Inc. (FSLR).
Alternative energy stocks, as represented by the iShares Global Clean Energy ETF (ICLN), have outperformed the broader market, posting a total return of 45.1% compared to the Russell 1000’s total return of 34.8% over the past 12 months. These market performance numbers and all statistics in the tables below are as of Sept. 3, 2021.
Here are the top 3 alternative energy stocks with the best value, the fastest growth, and the most momentum.
These are the alternative energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Alternative Energy Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|ReneSola Ltd. (SOL)||7.09||0.5||6.0|
|SunPower Corp. (SPWR)||21.83||3.8||8.9|
|Daqo New Energy Corp. (DQ)||61.75||4.5||11.6|
- ReneSola Ltd.: ReneSola is a global solar power project developer and operator. The company sells electricity generated by its operated solar power plants, and also offers project financing and construction management services. ReneSola recently announced financial results for Q2 of its 2021 fiscal year (FY), the three-month period ended June 30, 2021. Net income attributable to the company’s shareholders rose 125.2% year over year (YOY) despite net revenue declining 29.2% compared to the year-ago quarter. The company’s cost of revenue sank 61.4%, helping to boost net income.
- SunPower Corp.: SunPower is an integrated solar products, systems, and services company that sells primarily to residential and commercial customers worldwide. The company designs and manufactures solar panels and systems. SunPower announced in early August financial results for Q2 FY 2021, the three-month period ended July 4, 2021. Net income rose 34.5% YOY on revenue growth of 41.9%. The company said that it was seeing increasing consumer demand for solar.
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for sale to manufacturers of solar cells and modules.
These are the top alternative energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general.
|Fastest Growing Alternative Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Daqo New Energy Corp. (DQ)||61.75||4.5||9,980||230.6|
|Enphase Energy Inc. (ENPH)||173.94||23.4||N/A (see company description)||151.8|
|Sunrun Inc. (RUN)||45.54||9.4||N/A (see company description)||121.3|
- Daqo New Energy Corp.: See above for company description.
- Enphase Energy Inc.: Enphase Energy is a global energy technology company that supplies microinverter-based, solar-plus-storage systems. It brings together solar generation, storage, and energy management on a single platform. The company announced in late July financial results for Q2 FY 2021, the three-month period ended June 30, 2021. Enphase Energy posted net income of $39.4 million, a significant improvement from the net loss of $47.3 million reported in the year-ago quarter. Net revenue rose 151.8% YOY. The company noted that demand for its microinverter systems outstripped supply due to supply chain constraints on components. Because the company’s EPS went from negative in the year-ago quarter to positive in the most recent quarter, an EPS growth rate could not be calculated for the table above.
- Sunrun Inc.: Sunrun is a provider of residential solar electricity. The company designs, develops, installs, and provides maintenance of residential solar energy systems. Sunrun announced in early August that cofounder Lynn Jurich will transition from her current role as chief executive officer (CEO) to executive co-chair of the company’s board of directors. Mary Powell, a Sunrun director and former president and CEO of Green Mountain Power, was appointed to take over as CEO effective Aug. 31, 2021. Sunrun reported negative EPS for the most recent quarter, which is why an EPS growth rate was not calculated for the table above.
These are the alternative energy stocks that had the highest total return over the last 12 months.
|Alternative Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|ReneSola Ltd. (SOL)||7.09||0.5||312.2|
|Daqo New Energy Corp. (DQ)||61.75||4.5||205.9|
|Enphase Energy Inc. (ENPH)||173.94||23.4||156.5|
|iShares Global Clean Energy ETF (ICLN)||N/A||N/A||45.1|
- ReneSola Ltd.: See above for company description.
- Daqo New Energy Corp.: See above for company description.
- Enphase Energy Inc.: See above for company description.
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YCharts. “Financial Data.” Accessed Sept. 7, 2021.
ReneSola Ltd. “ReneSola Q2 2021 Letter to Shareholder,” Page 10. Accessed Sept. 7, 2021.
SunPower Corp. “SunPower Reports Second Quarter 2021 Results.” Accessed Sept. 7, 2021.
Enphase Energy Inc. “Enphase Energy Reports Financial Results for the Second Quarter of 2021.” Accessed Sept. 7, 2021.
Sunrun Inc. “Sunrun Announces Co-Founder and CEO Lynn Jurich to Transition to Executive Co-Chair of the Board; Mary Powell to Become Company’s Next CEO.” Accessed Sept. 7, 2021.
Sunrun Inc. “Sunrun Reports Second Quarter 2021 Financial Results.” Accessed Sept. 7, 2021.