A report from the International Energy Agency states that the total additions of renewable power capacity are expected to jump this year due to the growing climate crises and policy momentum. This growth will continue into 2024 with the total renewable energy capacity in the world rising to 4500 gigawatts and the growth will be driven by solar and wind energy. This has led to the rise of renewable energy stocks to buy.
About solar power additions, they will keep growing in 2024 and we will see a soaring demand for solar power due to the high electricity prices.
While these numbers are fascinating, it also throws light on our future. Governments will go all out to increase the production of renewable energy and we will see several companies raking in big profits. While the move toward renewable sources of energy is beneficial for all of us, smart investors are aware that investing in renewable energy stocks will also be beneficial in the long term. With that in mind, here are the three renewable energy stocks set to roar in 2024.
NextEra (NEE)
A hot favorite renewable energy company, NextEra Energy (NYSE:NEE) is the largest regulated electric utility in Florida. The company is a success because it is two businesses into one. The company is a utility company as well as a renewable energy company. It enjoys an early-mover advantage in the industry and has been increasing the dividend annually for about three decades.
NextEra Energy continues to generate steady revenue from the utilities business while investing in clean energy. NEE stock is an ideal option for income and growth investors since the company enjoys a dividend yield of 3.59% and has paid a quarterly dividend of $0.47. Trading at $52.15, the stock is down 37% year to date and this makes it a solid opportunity to buy.
The company is going to put cash to work where it can make a significant return on investments. In a market like today, a solid company with an impressive balance sheet can make all the difference. Its subsidiary recently announced the expected dividend distribution per unit to be cut by half. This means the rate will be around 5% to 8% through 2026. While investors weren’t happy with this, it is still better than several other companies in the industry.
Reporting a 100% jump in the net income is no small feat and NextEra achieved it in the second quarter. With the demand for renewable energy growing, NextEra Energy is set to benefit. It reported a revenue of $2.8 billion and a 10 times increase in income from renewable energy projects. This is a rock-solid dividend stock that will stand out in the industry in 2024.
Linde (LIN)
A global industrial gas company, Linde (NYSE:LIN) has shown steady growth and reported strong numbers each quarter. The company signed agreements in Brazil in July which will help increase its global active renewable energy by over 60% and help the company achieve the goal of doubling the purchase of low carbon energy by 2028. The company has been working to extend the supply agreements for industrial gases in order to increase its market share. It has a presence across multiple industries ranging from manufacturing to healthcare. The company also boasts of a solid balance sheet and the stock predictions for Linde are highly positive.
It raised 2023 earnings expectations from 12% to 14% and despite the market uncertainty, the company managed to report a 16% rise in the EPS year over year. Linde has a backlog of $7.8 billion which means it will continue to generate cash flow in the coming years. It also rewards shareholders through dividends and enjoys a yield of 1.38%. This makes it one of those renewable energy stocks to pay attention to.
The company is getting a boost from the other areas of the economy as well. The government is trying to offer incentives to renewable energy companies and this has helped Linde improve its financials. LIN stock is trading at a premium and is exchanging hands for $370 today but it could be well-deserved.
In an uncertain market like today, Linde stands out as a company that can thrive in any market situation. It also has a solid dividend payment history which will attract income investors. The stock has a buy rating from several analysts with price targets ranging from $410 to $460, a significant upside from the current level. This is one stock that will continue to thrive in 2024.
Brookfield Renewable (BEPC)
Brookfield Renewable (NYSE:BEPC) is another highly diversified company. It operates in solar energy, wind energy, hydroelectric power, and batteries. Due to this diversification, it manages to generate stable cash flows, and using its own assets, it sells the power through long-term purchase agreements with corporates and utilities.
The company also pays a regular dividend and has increased the dividends annually since 2016. It boasts of a dividend yield of 5.94% which is better than all the other companies mentioned here. The company has partnered with Origin Energy for $18.7 billion and this gives it a strong foothold in the Australian market. That said, it has also partnered with Cameco for $8 billion. It will acquire Westinghouse Electric Company which owns the largest nuclear service business in the world. These acquisitions give Brookefield a strong and consistent cash flow. All in all, it’s one of those renewable energy stocks to consider.
The sizeable growth prospects can offer a chance to increase the dividends in the coming years. Trading at $22 today, BEPC is a highly undervalued stock. The company has the potential to double your money and the higher power prices will drive growth in the coming months. It is a low-risk stock armed with a solid balance sheet. The company has enjoyed stable business through all the market ups and downs. Since the company has a utility business, it will be able to increase cash flow generation and the stock could be worth much more in the next six months.
On the date of publication, Vandita Jadeja did not hold (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.