No matter how you slice it, Donald Trump has the more straightforward path to the White House. Republican voters overwhelmingly chose him over other candidates. It was telegraphed that he would run for years and it happened. On the other end, Vice President Kamala Harris wasn’t even on the top of the ticket just a few weeks ago. Things changed and that might be good for renewable energy stocks.
One element that has many on the left worried is Trump’s vow to reverse President Joe Biden’s green energy initiatives. Primarily, this stated directive will target electric vehicles. Instead, under a second Trump administration, combustion-powered vehicles may dominate the streets. Presumably, other green projects – such as the deployment of wind turbines (which the former president doesn’t like) – may get the axe.
However, Harris has energized the left and that has many in Trump’s camp worried. She’s younger and has a prosecutorial edge that some opponents find intimidating. After much turmoil from Democrats, circumstances are looking brighter for them. And that may be a positive for the below renewable energy stocks.
Brookfield Renewable (BEPC)
One of the world’s largest publicly traded renewable power platforms, Brookfield Renewable (NYSE:BEPC) owns and operates a wealth of sustainable energy assets. These include hydroelectric, wind and solar power facilities, which are located across the Americas and Europe. The BEPC ticker has the advantage of corporate class structure, whereas the partnership version trades under BEP.
Financially, Brookfield isn’t the most consistently profitable enterprise. In the past year since the first quarter, only Q4 saw positive earnings (and 1 cent per share at that). Nevertheless, during this period, the loss per share came out to 12 cents. This figure mitigated the expected loss of 15 cents per share. Therefore, the average surprise came out to 11.23%.
BEPC stock is also relatively undervalued. Right now, shares trade hands at 1.26X trailing-year sales. Between Q1 2023 and Q1 2024, this metric was 1.31X.
More importantly, analysts anticipate sales to rise to $5.74 billion by year’s end. If so, that would be up 13.9% from the prior year. With a forward annual dividend yield of 5.02%, BEPC represents one of the top renewable energy stocks to consider.
Enphase Energy (ENPH)
A leading provider of solar energy solutions, Enphase Energy (NASDAQ:ENPH) specializes in designing and manufacturing microinverters. In addition, it also focuses on energy management technologies and storage systems. The company serves both residential and commercial solar power systems. With the Federal Reserve potentially poised to lower rates, business could blossom for Enphase. Add in a possible Harris victory and ENPH stock would be one to watch.
To be fair, Enphase is a riskier entity among renewable energy stocks. In the past year since Q2, the company posted an average earnings per share of 59 cents. However, this figure missed the collective consensus view by 2 cents. So, the negative earnings surprise came out to 5.38%.
Another problem is the valuation. Right now, ENPH stock trades at 11.08X sales. Further, in the past year, the metric sat at 7.57X. That analysts are anticipating a big drop of 38.8% in sales to $1.4 billion this year isn’t helpful.
That said, in fiscal 2025, analysts are seeking revenue of $2.01 billion. And the high-side estimate calls for $2.38 billion.
Clearway Energy (CWEN)
Falling under the renewable utilities industry, Clearway Energy (NYSE:CWEN) operates both conventional and renewable power generation segments. For the former category, the company focuses on natural gas. For the latter, it concentrates on wind and solar projects. While a risky investment, Clearway attracts market dollars thanks to its burgeoning renewable energy initiatives.
Should Harris pull off a victory, even speculative renewable energy stocks like CWEN could swing higher on the rising-tide thesis. While Clearway hasn’t been consistently profitable, where the company wins is in the top line. Following a miss in Q4 2022, the company has consistently posted sales higher than analysts’ expectations.
To be sure, CWEN stock isn’t the most discounted idea. Priced at 2.39X revenue, it’s about even with the underlying industry. It is slightly discounted relative to the prior year’s average metric of 2.42X.
Since the start of the year, shares slipped 3%. However, they’ve gained nearly 7% in the trailing month. Combined with a consensus analyst rating of strong buy, CWEN is one of the renewable energy stocks to consider.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.