The post Renewable Energy Stocks by Chetan Shekar appeared first on Benzinga. Visit Benzinga to get more great content like this.
Global warming and climate change have had an undeniable impact on people around the world. Driven by the need to reduce carbon emissions and the limited supply of fossil fuels, investors are looking to back renewable energy companies in an effort to make life sustainable for future generations. Want to pitch in on protecting the planet? Here’s a guide to help you invest in renewable energy stocks that are growing steadily in the market.
Quick Look at the Best Renewable Energy Stocks:
- Brookfield Renewable
- Sunrun, Inc.
- Clearway Energy Inc
- Enphase Energy Inc
- Atlantica Online
- SolarEdge Technologies
- Southern Copper Corporation
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Overview: Renewable Energy Stocks
Energy stocks can primarily be differentiated into 2 categories — renewable and nonrenewable energy companies. But, is renewable energy going to overtake the more traditional players on the energy market? When can that happen? Or, will more traditional energy companies be able to pivot? Because you don’t know, you need a diverse portfolio that will perform well when changes occur in the sector.
Firms that engage in the production and distribution of energy from limited resources such as coal, oil and natural gas are considered nonrenewable energy stocks. Companies that produce and distribute energy from renewable resources such as solar, biomass, wind and water are considered renewable energy stocks. At the same time, this industry could continue to grow and add new options for the investor.
Coal was used in the early 1800s to fuel steam-powered boats and trains. Then, wood became the main source of energy in the U.S. Wood was the only commercially traded resource for renewable energy until the first hydropower plant began producing electricity in 1882. However, it’s taken quite a long time for renewable energy resources to catch up with the rest of the market. In the 2020s, it’s clear that there’s quite a lot of work to do, with small startups and larger brands spreading across the world. Thus you must find a place where you can profit safely.
Even though oil prices have taken a hit over the last few years, traditional mega-cap oil companies like ExxonMobil (NYSE: XOM) and BP (NYSE: BP) are considered less risky investments. These oil and gas companies apply tried and tested industrial processes to produce energy. The value of renewable energy stocks is comparatively more volatile due to the increasing expenses of developing innovative technology for more efficient and eco-friendly energy generation.
The first solar panel was developed in the mid-1900s and sparked a renewable energy revolution. Solar stocks like First Solar (NASDAQ: FSLR) and Tesla (NASDAQ: TSLA) are pioneering battery technology that can empower cars, homes and commercial complexes at affordable prices. Investing your money in renewable energy stocks can accelerate the research and give oil companies a run for their money. However, there’s no way to know which sectors of the renewable energy industry will rise or fall.
At the same time, oil companies still perform well because the energy market has not flipped. This means that some energy stocks may not grow as fast as you thought. A long position may be a better idea, but you should monitor the performance of these assets to make sure a long position is still a good idea. This means that you may need to adjust your investment strategy from time to time because certain assets will not perform well, but they might soar while others fall, given the state of the market and current events.
Types of Renewable Energy
Because the renewable energy market is so robust, there are several types from which you may choose. As you look to invest in renewable energy, remember that you can invest different segments of the market, including:
- Solar
- Wind
- Biofuel
- Hydroelectricity
- Biomass
- Geothermal
- Tidal
- Cogeneration
In these segments, you will encounter wind turbines, wave harvesting stations, decarbonization efforts and more. Moreover, you will run into companies working on ESG efforts that will make them more palatable to investors. Because renewable energy sources are so diverse, you must diversify your energy investing plan, look at where energy consumption is going and move your investments to anything from offshore wind farming to solar power and more.
Best Online Brokers for Renewable Energy Stock
Online brokers offer user-friendly tools for new and seasoned investors to improve their trading tactics. You can use these tools to research and filter stocks as per your financial goals. These platforms are integrated with a fully customizable stock screener. For example, you can set the price range between $0.1–$10 to quickly find stocks under $10.
You should be comfortable with the platform you’re using. You want to fully understand how the broker works, get good customer service and have access to your account at all times. Take a look at these online brokers to begin your investment journey. When you choose the most appropriate broker for your situation, you’re more likely to be comfortable with the situation. At the same time, don’t be afraid to look for brokers that offer bonuses and additional perks that might appeal to you when you look into green energy stocks.
Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.
IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.
- Access to international markets
- Active traders
- Detailed mobile app that makes trading simple
- Wide range of available account types and tradeable assets
- IB SmartRouting provides significant price improvement vs. industry
- Fractional trading allows investing regardless of share price
- Industry’s lowest margin rates
- Earn more by lending your fuly-paid shares
- Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources
80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments.
Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.
The Plus500 CFD platform is for CFDs. The Plus500 Futures platform offers futures for U.S. customers, and Plus500 Invest offers stock trading.
- Traders looking for a smooth mobile experience
- Great mobile app
- Low spreads and commissions
- Unlimited demo account
- Only derivatives are available
- Not open to U.S. residents
Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.
Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research.
- Stock and ETF investors
- Crypto investors
- Investors looking to diversify with alternative assets or bonds and options
- Commission-free stock and ETF trading
- Fractional share investing
- Advanced data, tools, and insights with Public Premium
- You can’t transfer crypto to another wallet
- No mutual funds or precious metals
- At this time, only offers individual brokerage accounts and not IRAs
Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.
- Beginners looking for simplicity
- Mobile-first investors
- Commission-free trades
- User-friendly mobile app
- Instant double
- Cash management
- Access to cryptocurrencies
- Limited research tools
- No mutual funds available
- Basic customer support options
TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.
- Traders seeking high transparency and mobility in a stock trading program
- Those attracted to commission-free trades
- Those seeking a free version of a high-quality trading program
- 24/7 live customer support
- Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
- Mobile app allows users to access stocks and trade in real-time while on the go
- Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
- Mobile app could offer more features
Features to Look for in Renewable Energy Stock
- Earnings per share: You can calculate the earnings per share (EPS) of a company by dividing its net income by its total number of outstanding shares. Stocks with negative EPS are considered bad investments and may imply that the company is running under loss.
- P/E ratio: The price-earnings (P/E) ratio helps you determine if a stock is undervalued or overpriced. The lower the P/E ratio, the better an investment it is. Many stocks under $5 have the lowest P/E ratios.
- Liquidity: Take into account the company’s average volume of shares traded per day before you make a decision. Renewable energy stocks can seem like an attractive investment but make sure there are enough takers before you buy into these stocks.
- Growth potential: Remember, you want to see growth potential in your assets. If you don’t believe you have growth potential, you may want to exit these positions to protect yourself. Energy efficiency is one thing, but the balance sheet of each business must also be managed efficiently.
Make Sustainable Investments
Global warming and climate change have raised concerns for our environment. Renewable energy companies are leading the change with innovative technology to produce energy with the least carbon footprint. You can consider investing in these clean energy stocks to shine the way for a better and brighter future. Remember that this segment of the economy is susceptible to massive swings in the market because it’s not fully ensconced amongst investors the same way an oil stock might be. You should monitor the performance of your holdings and exit positions that are no longer serving you.
You can also look at renewable energy assets as a way to balance the diversity of your portfolio when you also invest in non-renewable energy assets like oil and gas. Over time, you may find your portfolio leaning towards renewable assets, but you must maintain that diversity as much as you can.
Frequently Asked Questions
Are reneweable energy stocks a good investment?
If you believe in renewable energy, then renewable energy stocks would be a good investment for you. International Energy Agency projects that 95% of the world energy will be renewable by 2026. They have also predicted that Global renewable energy capacity will rise more than 60% from 2020 levels by 2026. Renewable energy will undisputedly play a bigger role in the future than they do today.
What are renewable energy stocks?
Renewable energy stocks are shares in companies that are related to the renewable energy sector.
Which renewable energy stocks are good?
You can find Benzinga’s recommended list of renewable energy stocks on the list above.
The post Renewable Energy Stocks by Chetan Shekar appeared first on Benzinga. Visit Benzinga to get more great content like this.
