Wind Power Stocks To Buy
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The Inflation Reduction Act (IRA) of 2022, was signed by President Biden on Aug. 16, 2022. The legislation calls for a more-than-$300-billion investment in energy and climate reform. This would be the largest federal investment in clean energy in U.S. history. Measures in the bill would invest in renewable energy infrastructure, including additional wind turbines and the manufacture of solar panels. Individuals would receive tax credits on the purchase of electric vehicles and steps taken to make homes more energy efficient.
Unfortunately, not even this impressive rate of growth in wind power assets is not enough to satisfy the net-zero emissions targets set by many countries to reduce the impact of climate change. According to the IEA report, many countries will need to double the rate of growth of wind power generation in order to reach their 2050 net-zero emissions targets.
Building the new wind energy infrastructure required for this massive transition will take time and money, but over the long term generation costs are lower, utility margins are wider, and consumers get cheaper, cleaner electricity.
Forbes Advisor has identified eight stocks that could be great wind power investments now. Most of these stocks are well off their 2020 highs, but are still offering impressive trailing and forward rates of growth in sales and earnings.
Eversource is a regulated electricity, gas, and water provider in the northeastern region of the United States. It has a partnership with Orsted, a Danish wind power company, to develop offshore wind power farms.
We began our search for the best wind power stocks with a list of 18 North American companies that included major players in the industry, with a significant portion of their businesses focused on wind power or related products and services.
Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
Cory has been a professional trader since 2005, and holds a Chartered Market Technician (CMT) designation. He has been widely published, writing for Technical Analysis of Stock & Commodities magazine, Investopedia, Benzinga, and others. He runs TradeThatSwing.com, has authored several trading courses and books, coaches individual clients, and regularly trades stocks, currencies, and ETFs.
But this may be only the beginning, given President Joe Biden's plan of deploying 30 GW of offshore wind energy in the U.S. by 2030. Plus, the Energy Information Administration (EIA) expects the the share of solar and wind renewable energy sources will grow from 13% in 2021 to 17% in 2023.
What's more, according to a report by the University of Delaware's Special Initiative on Offshore Wind (SIOW), private-sector investment in U.S. offshore wind could reach $109 billion by the end of the decade.
With that in mind, here are three wind stocks that are well-positioned to harness this growth. To narrow down our list, we turned to the TipRanks (opens in new tab) database to find names that analysts' are upbeat on. The wind energy stocks featured here either have Buy or Strong Buy ratings from the Wall Street pros or are targeted for significant upside potential over the next 12 months. Let's take a closer look.
Brookfield Renewable Partners (BEP (opens in new tab), $41.01) operates a publicly traded, pure-play renewable power platform. It is a flagship renewable power company of alternative asset management firm Brookfield Asset Management (BAM (opens in new tab)). The company's portfolio consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia. BEP's expansive portfolio of assets has around 21,000 megawatts (MW) of installed capacity and a 62,000-MW development pipeline.
While BEP generates most of its cash flows from its hydroelectric assets, its wind and solar assets are also growing quickly. This is indicated by the fact that the company's wind energy assets generated FFO of $396 million in 2021, up 67% year-over-year and comprising 42.4% of BEP's total FFO.
Credit Suisse analyst Andrew M. Kuske thinks BEP is one of the top wind stocks, calling it \"a best in class developer of long-dated renewable power, an active capital recycler and a savvy purchaser of distressed assets.\"
\"[W]hen you look medium to long term, we continue to be big believers in the demand environment for onshore wind, and we think we're well positioned to be an important part of that going forward,\" said CEO Larry Culp in the company's fourth-quarter earnings call.
TPI Composites (TPIC (opens in new tab), $14.12) is an Arizona-based manufacturer of composite wind blades, catering to the wind energy market. In 2020, the company's wind blades comprised around 32% of all those sold onshore globally, on a MW-basis, excluding those sold in China.
Similar to its fellow wind energy stocks, macro headwinds persisted for TPI Composites in the fourth quarter and are likely to carry over into 2022. However, the company still achieved record net sales in 2021 of $1.73 billion versus $1.67 billion in 2020.
And TPIC Composites actually started 2022 on our short list of stocks to sell. UBS analysts, for instance, had just reduced their 12-month price targets to $20 per share from $44. TPIC has since fallen to $20, then cratered to as low as $9.23. Now, a consensus price target of $19 per share sits 35.6% higher than current prices. The upside potential to the average price target suggests that the stock could be undervalued at current levels.
Shrilekha Pethe has been extensively covering and writing about the U.S. financial markets since 2015. Prior to writing about the world of finance, Shrilekha worked as an equity research analyst for a bulge-bracket client in investment banking, Credit Suisse. Her sole objective is to help investors make better and informed decisions. Her core competency lies in analyzing stocks across different sectors, from technology to mining, and banking to oil and gas. She holds a postgraduate degree in finance from ICFAI Business School, Pune, and is currently on her way to becoming a Certified Financial Planner. Shrilekha has been writing for TipRanks since January 2021. You can contact Shrilekha on LinkedIn.\"}; var triggerHydrate = function() { window.sliceComponents.authorBio.hydrate(data, componentContainer); } var triggerScriptLoadThenHydrate = function() { if (window.sliceComponents.authorBio === undefined) { var script = document.createElement('script'); script.src = ' -9-3/authorBio.js'; script.async = true; script.id = 'vanilla-slice-authorBio-component-script'; script.onload = () => { window.sliceComponents.authorBio = authorBio; triggerHydrate(); }; document.head.append(script); } else { triggerHydrate(); } } if (window.lazyObserveElement) { window.lazyObserveElement(componentContainer, triggerScriptLoadThenHydrate, 1500); } else { console.log('Could not lazy load slice JS for authorBio') } } }).catch(err => console.log('Hydration Script has failed for authorBio Slice', err)); }).catch(err => console.log('Externals script failed to load', err));Shrilekha PetheSocial Links NavigationContributing Writer, Kiplinger.comShrilekha Pethe has been extensively covering and writing about the U.S. financial markets since 2015. Prior to writing about the world of finance, Shrilekha worked as an equity research analyst for a bulge-bracket client in investment banking, Credit Suisse. Her sole objective is to help investors make better and informed decisions. Her core competency lies in analyzing stocks across different sectors, from technology to mining, and banking to oil and gas. She holds a postgraduate degree in finance from ICFAI Business School, Pune, and is currently on her way to becoming a Certified Financial Planner. Shrilekha has been writing for TipRanks (opens in new tab) since January 2021. You can contact Shrilekha on LinkedIn (opens in new tab).
Although the U.S. has just 42 megawatts of offshore wind energy currently operating from two pilot projects, an August report from the U.S. Department of Energy said there are more than 35,000 megawatts in various stages of development.
The U.S. offshore wind industry is also set to benefit from decades of development in other nations, as ever larger turbines have made offshore wind farms more efficient, an evolution that is good for companies and consumers.
\"Turbines that will be available in the next few years promise a new level of efficiency and generation capacity and could help reduce the costs of offshore wind while helping it power more of our energy needs,\" the Frontier Group think tank said in a March report.
\"Our outlook for the U.S. offshore wind industry is strong, driven by policy tailwinds from the Biden Administration, as well as an acceleration in new wind turbine project development,\" says Andrew Little, research analyst with Global X, which manages exchange-traded funds.
The Biden administration has set a goal to have 30,000 megawatts of offshore energy installed by 2030. While there is debate within the industry about whether it will hit that goal, the attempt could prove lucrative for companies involved. Capital expenditures in the U.S. offshore wind supply chain alone could total $200 billion through 2035, according to a recent report from the research provider Lium.
The U.S. Department of the Interior is engaged in the permitting process for a host of potential offshore wind farms off the East Coast and California, and just this year approved the first commercial-scale farm. The Energy Department has made $3 billion in loans available to support the industry. Congress recently approved a 30% investment tax credit for offshore wind projects that start construction by Dec. 31, 2025.
The nation's first commercial-scale offshore wind farm, in development off the coast of Massachusetts, recently landed $2.3 billion in investment from nine banks. Global investment manager Apollo Global Management Inc. (APO) last year bought into offshore wind developer U.S. Wind, which is working on a federal lease area off the coast of Maryland. 59ce067264