There are many solar companies on the market, but how do you decide which are the best solar companies for investment? There are many companies to choose from, but we will focus on Enphase Energy, Sunrun, JinkoSolar, and Boralex. Here’s a quick rundown of the pros and cons of each of them. Which are the best solar companies for investment? Listed below are five factors to consider before making your decision.
Best Solar Companies For Investment – Enphase Energy
The stock of Enphase Energy has skyrocketed in recent months from a low of $1 in 2017 to over 200 a share in early 2021. Since then, it has largely traded sideways, forming a double-bottom base and trading slightly above its 193 buy point on Tuesday. While Enphase stock still has plenty of long-term upside, investors should be cautious given the lofty expectations, market volatility, and unclear policy picture.
While Enphase has had a wild ride in recent years, the company’s technology is impressive. It combines solar PV generation with power management and integration with batteries and other power devices. However, the company’s management has failed to maintain its growth rate under the previous management. However, with new leadership, Enphase has shown remarkable results and is now expanding overseas. If you are looking for a good solar investment, Enphase should be a good choice.
While many solar companies will sell only the products that they manufacture, Enphase has developed its own microinverter, which is better suited for residential systems. The company has also branched out into the energy management market, including energy storage. Its technology has been hailed by a leading research analyst, Kashy Harrison of Simmons Energy. Harrison attributed this growth to the momentum behind residential solar and the demand for energy storage.
While Enphase Energy may not be the best solar company for investment, it is one of the better-performing stocks in the industry. The company has returned more than +11,000% in the last five years. In addition to this, SolarEdge Technologies Inc. SEDG produces solar monitoring systems, inverters, and solar equipment. The company also offers solar financing for customers. There are several other solar stocks that investors should consider, but Enphase Energy is one of the best solar companies for investment.
Best Solar Companies For Investment – Sunrun
Investors looking to purchase shares of Sunrun solar companies for investment should consider a few key points. While this solar company has no dividend history, it’s likely focusing on boosting its share price and maintaining income rather than paying dividends. That said, a dividend is good for investors because it will help Sunrun operate in the field more efficiently and free up cash for investment purposes. Investors should also consider the company’s recurring revenue model, which relies on a contract with an average duration of 17.2 years.
The economy has hit the solar industry hard. Many investors expected solar tax credits to expire in 2016, so they avoided investing in the company. However, the economy has rebounded and the Trump administration has extended renewable energy tax credits to 2022. Furthermore, the new Biden administration is committed to combating climate change, which should help the industry. That being said, investors should consider Sunrun solar companies for investment in order to capture the growth potential of this fast-growing sector.
While this solar company has a limited operating history, it has already generated considerable revenue. Investors should note that RUN purchases the solar panels from Asia and pays the interest from the proceeds of the contract with its customers. While solar is not the best energy source, it can produce a decent profit when it is installed and marketed properly. The company will eventually break even and become profitable. Investing in solar companies is a good idea for many investors. The market is still growing and there are other renewable energy companies to consider.
While Sunrun does not release pricing information publicly, analysts still favor the company. Both companies have potential to increase earnings by 30 percent over the next year. Investors should look for solar companies that can provide long-term returns, regardless of size. The growth potential of Sunrun is very high compared to the market’s current growth rate. Its competitive position in the solar industry also allows it to market its products inside places like Home Depot and Costco. It is definitely one of the best solar companies for investment
Best Solar Companies For Investment – JinkoSolar
If you’re looking for a solar stock, JinkoSolar is a good choice. They’re a leading manufacturer of solar panels for residential, commercial and industrial settings in several countries. Their subsidiaries are located throughout the world and include South Korea, Italy, Germany, Turkey, the US, and Brazil. They have a global sales team that’s located in the US, China, and Vietnam.
JinkoSolar’s FY2021 earnings report is full of details. Chinese demand for solar power is expected to reach 100 gigawatts by 2022. The company also has significant interest in Europe and India. Its Gener Miao recently told investors that the recent Russian invasion of Ukraine has only strengthened their interest in Europe and India. They’re also making a big push in China.
In addition to manufacturing solar panels, JinkoSolar also sells inverters and system kits. It also sells residential solar power systems and backup batteries. Their systems come with a 20 to 25 year warranty and are sold through power purchase and lease agreements. The company is also a leading residential solar installer in the U.S., with over 8,000 solar system orders a year.
Another company with a large production footprint is Daqo New Energy, which produces high-quality polysilicon. Its products are then sold to solar panel makers. They are also a leader in solar panel manufacturing. This is why JinkoSolar is the best solar company for investment. This company is backed by the Chinese government and is cost-competitive. These two companies have similar mission statements and is one of the best solar companies for investment.
Best Solar Companies For Investment – Boralex
As a utility company, Boralex is a good investment option. They generate renewable energy from a variety of sources and operate energy storage facilities. However, they focus on solar energy, which currently accounts for 9GW of their total production. They have a history of steady growth, and their plans to expand into new markets are likely to continue. As a result, Boralex shares are one of the best solar companies for investment.
Despite a modest dividend yield, Boralex has a robust pipeline of wind and solar projects in its pipeline. This makes the company an excellent defensive investment opportunity. While Boralex does not pay a high payout ratio, it is still growing its discretionary cash flow, which means that it has plenty of capital to invest in future growth. In other words, Boralex has the potential to return cash to shareholders in the form of dividend growth and capital appreciation.
As a dividend growth investor, you will want to make sure you invest in well-run solar companies. Investing in a handful of them will help you reap the rewards of the industry’s rising prices. If you don’t like risk, you can invest in an index fund that includes a broad range of solar stocks, including companies with a large market cap. This way, you can be sure that you’re not missing out on a broad trend.
Another solar company to invest in is Sunnova Energy. This company manufactures solar panels components, including silicon wafers, and provides solar solutions to homebuilders and contractors. It also holds several patents in China for proprietary silicon wafers. It also received the China Patent Award for ingenuity. This Hong Kong-based company has already been included in two index funds and is predicted to surpass forecasts in 2022 as one of the best solar companies for investment.
Best Solar Companies For Investment – Sunnova
If you are looking for a solid long-term investment opportunity, look no further than Sunnova Energy International, Inc. (NASDAQ: SUNE). This residential energy service provider provides solar energy systems, electric vehicle chargers, and home solar protection. Founded in 2012, the company has experienced tremendous growth since its inception. Sunnova beat estimates for the past two years, and it expects to continue exceeding expectations into the next decade.
With its rapid growth, Sunnova continues to earn a premium valuation for the foreseeable future. While Sunnova currently boasts a higher price-to-sales ratio than its rivals, it faces many challenges in its growth. The company’s revenue base and customer base are relatively small, making higher growth in percentage terms easier to achieve now. However, this rate would become difficult to sustain as the company expands.
The company is focused on business and residential accounts, so it provides solutions for both. Its smart micro-inverter, for example, can be controlled through a smartphone app. Additionally, the company has a battery of stored solar energy that is used to power essential electronics during power outages. As a result, the company has increased its revenue by 96% in the past year. Therefore, it may be a good idea to trust in Sunnova as one of the best solar companies for investment.
Best Solar Companies For Investment Conclusion
If you are looking for the best solar companies for investment, you should consider the above. These offer great investment opportunities in solar, you should give them serious consideration and they are listed on the Russell 1000 index.