With a growing awareness about climate change, people are more conscious of what impact their actions could have on the earth. Human activities are changing the natural greenhouse effects. Burning of fossil fuels over the last century, like coal and oil, has increased the concentration of atmospheric carbon dioxide. These effects of these activities have led to the aggressive adoption of clean technologies.
The cleantech industry, which includes wind energy, solar energy, hydropower, and geothermal among others, is at the center of this revolution. With president-elect Joe Biden in the White House, the growth of the cleantech stocks is expected to accelerate further. Taking on the “existential threat” of climate change is one of the “Day One” priorities for Biden. Moreover, he has also announced his plans to make the United States rejoin the Paris Agreement on climate change.
While many companies are entering this promising industry, Brookfield Renewable Partners L.P. (BEP), First Solar, Inc. (FSLR), and Niu Technologies (NIU) are expected to perform pretty well based on their constant innovations and cutting-edge technologies.
Brookfield Renewable Partners L.P. (BEP)
Founded in 1999, BEP operates one of the world’s largest publicly-traded renewable power platforms. The company’s portfolio consists of roughly 19,400 MW of capacity and 5,318 generating facilities in North America, South America, Europe and Asia. Being the global leader in hydroelectric power, it makes up roughly 64% of its portfolio. The company generates electricity through hydroelectric, wind, solar, cogeneration, and biomass sources.
BEP remained focused on continuing to deliver on its target of 12 to 15% long-term returns to equity holders. For the third quarter that ended September 2020, BEP’s actual generation increased 8.3% year-over-year to 12,007 GWh. Funds from Operations (FFO) increased 18% year-over-year to $157 million. While revenues from Solar increased 114.3% year-over-year to $120 million, revenues from Wind increased 17.4% year-over-year to $101 million. BEP’s EPS is expected to grow at a rate of 53.3% per annum in the next five years.
Last month, JP Morgan Chase & Co. (JPM) and BEP announced a five-year energy agreement for supplying clean, renewable electricity to more than 500 of JPMorgan Chase’s real estate operations in New York State. This is in line with JPM’s commitment to annually source renewable energy for 100% of its global power needs starting in 2020. On September 24th, Plug Power, Inc. (PLUG) announced an agreement to source 100% renewable energy supplies from BEP to fully energize PLUG’s planned green hydrogen production plant, one of the first industrial-scale facilities in North America. On a year-to-date basis, BEP has rallied 50.8% to close yesterday’s session at $56.24. Over the past six months, BEP has soared 44%.
How does BEP stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #3 out of 18 stocks in MLPs – Other industry.
First Solar, Inc. (FSLR)
Based in Tempe, Arizona, FSLR is a leading global provider of photovoltaic (PV) solar energy solutions. The company has developed, financed, engineered, constructed and operated many of the world’s largest grid-connected PV power plants. Operating for nearly two-decades now, FSLR operates through two segments, components and systems.
FSLR’s net sales for the third quarter that ended September 2020 increased 69.6% year-over-year to $927.6 million. This quarterly improvement was driven by growth in international project sales, and an increase in the volume of modules sold to third parties. Net income increased 406.5% year-over-year to $155 million. EPS increased 400% year-over-year to $1.45.
Analysts expect FSLR’s revenue to increase 24.4% for the quarter ending March 2021 and 6.6% next year. The company’s EPS is expected to increase 150.7% this year and at a rate of 26% per annum over the next five years. FSLR’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
Vistra Corp (VST) selected FSLR’s PV solar modules last month to power its six solar energy projects across Texas. In September, JP Energie Environnement (JPee) started using the advanced Series 6 PV solar modules to power the 59-megawatt (MW)DC Labarde solar power plant in Europe. The stock has gained 50.2% year-to-date and is currently trading 14.2% below its 52-week high.
FSLR’s POWR Ratings reflect this promising outlook. It has an overall rating of “Buy” with a “B” for Trade Grade and Buy & Hold Grade. Among the 17 stocks in the Solar industry, it’s ranked #2.
Niu Technologies (NIU)
Based in China, NIU is the world’s leading provider of smart urban mobility solutions. Operating for nearly six years now, the company currently designs, manufactures and sells high-performance electric bicycles, mopeds and motorcycles. NIU’s portfolio consists of seven series NQi, MQi, UQi, NIU Aero, Gova, RQi, TQi. The company developed a 4th generation NIU Energy lithium battery technology that has a longer lasting battery life, longer range, and more lightweight.
NIU’s total revenue increased 21.6% year-over-year to $91.3 million for the second quarter that ended June 2020. It was mainly driven by retail network expansion and new product launches in China. E-scooter sales revenue from the China market increased 58.5% year-over-year. Net income increased 11.5% year-over-year to $8 million. NIU’s EPS for the second quarter was $0.13, which surpassed the consensus estimate by 44.4%. Driven by the launch of the G0, MQi2, and MQiS earlier this year, NIU’s e-scooter sales volume for the third quarter (ended September 2020) increased 67.9% year-over-year to 250,889.
Analysts expect NIU’s revenue to increase 38.7% this year, and 68.3% next year. The company’s EPS is expected to grow 20.5% this year, 78.7% next year, and at a rate of 5.9% per annum over the next five years. NIU’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters. NIU is expected to release its financial results for the third quarter on November 23rd before the market opens.
Since May, NIU has gradually reopened its overseas dealer shops. The company launched two new models under Gova series, the G0 and G2, and MQiS, another new model under the MQi series. The company has also been expanding aggressively internationally. Last month, the company opened its own flagship store in Bristol, United Kingdom. The stock closed yesterday’s trading session at $35.89, gaining 320.8% year-to-date. It is presently trading 4.1% below its 52-week high of $37.44.
It’s no surprise that NIU is rated “Strong Buy” in our POWR Ratings system. It also has an “A” for Trade Grade, Buy & Hold Grade, and Peer Grade, and a “B” for Industry Rank. In the 30-stock Technology – Hardware industry, it is ranked #10.
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BEP shares were trading at $57.02 per share on Friday morning, up $0.78 (+1.39%). Year-to-date, BEP has gained 59.28%, versus a 12.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...
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