Forget Oil, Renewable Energy Is All Charged Up: 4 Winners
Since early 2020, the price of West Texas Intermediate (WTI) oil has dropped by more than 40% thanks to the coronavirus pandemic and the supply flood. With no immediate pause in sight, investing in oil stocks has become risky. In addition, leading oil companies are considering investing in non-oil companies such as renewable energy in order to align the goals with the Paris Agreement.
According to Bloomberg New Energy Finance, renewable energy capacity increased from 414 gigawatts (GW) to 1,650 GW from 2010 to 2019. Overall, the prospects for the renewable energy industry currently appear to be good.
Oil majors are leaders in the energy transition
Several large oil and gas energy companies have set themselves ambitious goals to significantly reduce greenhouse gas emissions. The British energy giant BP plc BP has set itself the goal of becoming a zero-emissions net company by 2050. As a result, the integrated energy supplier plans to boost investment in non-oil and gas companies in the coming years.
Royal Dutch Shell plc RDS.A is another major energy company that plans to become a zero emissions net energy company by 2050. What is important is that the company intends to reduce the carbon intensity of the products it will sell by about 30% by 2035. By 2050 The company plans to reduce its carbon footprint by 65%.
In addition, Eni S.p.A E, headquartered in Rome, Italy, recently announced the purchase of three onshore wind projects in Italy. The company expects the three projects to generate 35.2 megawatts (MW) at maximum capacity. Eni also assumes that the developments - which are to be built in the Comune di Laterza in Puglia - will produce around 81 gigawatt hours (GWh) of electricity annually. The energy major therefore expects these wind projects to help reduce 33,400 tons of carbon dioxide emissions per year.
In particular, the company expects construction of the facilities to begin in the third trimester of 2021. It is important that the energy giant generates energy from wind projects in Italy for the first time. With this acquisition, Eni has made significant progress in decarbonization and estimates that it will reduce net greenhouse gas emissions by 80% by 2050.
Renewable energies as the fastest growing power source
With the energy transitions in the maps, renewable energy will be the fastest growing source of power generation in 2020, the US Energy Information Administration (EIA) said. In 2020, the share of renewable energy used to generate electricity in the United States will increase from 17% in 2019 per EIA to 21%. The share will continue to increase to 23% in 2021, added EIA. On the contrary, the EIA assumes that coal's share of electricity generation will decrease from 24% in 2019 to 17% in 2020.
With the increasing demand for clean energy, more electricity is generated from renewable energy sources. In fact, the EIA assumes that wind and sun will continue to expand electricity generation capacity. In 2020, the electricity sector will add 12.6 gigawatts of new solar capacity on a supply scale and 23.2 gigawatts of wind capacity in the US, according to UVP forecasts.
To buy shares
With oil prices still in decline, crude oil researchers and producers are throttling operations and investment to survive. The future of all oil and gas companies is in renewable energies as investors put pressure on companies to cut net emissions.
Overall, it seems to be a good time for energy investors to consider stocks from the renewable energy industry. Here we present a stock with a Zacks rank 1 (strong buy) that is well positioned to win. There are three other stocks with a Zacks rank 2 (buy). The full list of today's Zacks # 1 Rank stocks can be found here.
Canadian Solar Inc. CSIQ is one of the world's leading solar companies. The company, founded in Canada in 2001, is one of the largest providers of solar energy solutions and also produces photovoltaic solar modules. In 2020 and 2021, Zacks Rank # 2 is expected to grow earnings by 22.8% and 11.4%, respectively.
First Solar, Inc. FSLR is one of the large companies that offer photovoltaic solar energy solutions worldwide. In 2020 and 2021, the second-tier share should see earnings growth of 93.2% and 20.2%, respectively.
Bloom Energy Corporation BE delivers affordable and clean energy to customers like several Fortune 100 companies through its energy server platform. Over the next five years, the number 1 ranked stock is expected to grow earnings by 25% and outperform the 13.1% in the industry.
Enphase Energy, Inc. ENPH is one of the world's largest providers of solar microinverters. The Zacks # 2 leaderboard is expected to post 8.4% and 37.5% earnings growth in 2020 and 2021, respectively.
5 shares double
Each was chosen by a Zacks expert as number 1 among the favorite stocks to achieve + 100% or more in 2020. Each comes from a different sector and has unique properties and catalysts that could promote exceptional growth.
Most of the stocks in this report fly under the radar of Wall Street, which is a great opportunity to get on the ground floor.
Check out these 5 potential home runs today >>
Do you want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click here to get this free report
Canadian Solar Inc. (CSIQ): Free stock analysis report
First Solar, Inc. (FSLR): Free stock analysis report
Eni SpA (E): Free stock analysis report
BP p.l.c. (BP): Free stock analysis report
Royal Dutch Shell PLC (RDS.A): Free stock analysis report
Enphase Energy, Inc. (ENPH): Free stock analysis report
Bloom Energy Corporation (BE): Free stock analysis report
To read this article on Zacks.com, click here.
Zacks Investment Research
You should check here to buy the best price guaranteed products.
‘Is my wife running my kids ragged?’: Dad wonders if his kids are doing too much during the week
Fox News' Dana Perino Makes 'Nonsensical' Comment About Wind Power
Twitter ‘Spaces’ for everyone
Doug Wilder, black former Virginia governor, rips Kamala's church ad for McAuliffe
On This Day: 22 October 2018
Steve Harvey on how his wife inspired his fashion makeover: 'She stopped me from wearing the big long suits a long time ago'