The entire solar industry has the potential to continue blossoming in ’21 following a spectacular ’20. A handful of the industry’s stocks stand out from the rest. Zero in on these solar industry superstars instead of going all-in on SEDG and your portfolio will be that much more diversified within this growing sector.
Below, we provide insight into solar industry stocks outperforming SEDG year-to-date. Every investor should consider adding Enphase Energy (ENPH), Sunrun (RUN), and JinkoSolar (JKS) to his or her portfolio.
Enphase Energy (ENPH)
Though SEDG increased from $311 to $319 to start the new year, ENPH is performing even better. ENPH started the year at $172.24. The stock is currently trading at $202. ENPH is a worldwide solar company that provides energy management solutions with high-tech solutions. ENPH has already shipped more than two million microinverters. More than a million of the company’s residential and commercial systems have been put into use across more than 130 countries.
ENPH is ranked 5th out of 17 stocks in the Solar industry. If you would like to find out more about the Solar industry, click here. Though ENPH’s forward P/E ratio is 105, the stock is still trading about $27 below its 52-week high of $229.04. ENPH recently beat Q4 earnings, coming in at 51 cents per share with sales of $264.8 million as opposed to the analysts’ expectations of 40 cents per share on sales of $254.8 million. The jump in sales represents a hike of more than 25% on a year over year basis. For the entire year, ENPH sales were up 24%.
If everything goes as planned, ENPH will enjoy revenue growth of over 41% in the first quarter of ’21 as compared to that of the first quarter of ’20. Add in the fact that ENPH announced it will extend its partnership with Solar Optimum for energy storage purposes and ENPH investors have all the more reason to be bullish as the deal indicates ENPH is actively looking to diversify its revenue streams.
Run started the new year at $69.98 and is now trading at $78.08. The analysts paint a rosy picture for SUN, setting an average price target of $82.62 for the stock. If RUN hits this target, the stock will have increased by nearly 10%. RUN has a fairly high forward P/E Ratio of 270 yet it is still trading well below its 52-week high of $100.93.
RUN makes money by financing residential solar systems in the United States. RUN installs solar systems through investment from corporations, providing those companies with tax breaks. RUN profits from each installation and also make money through monthly payment collections. The result is a win-win-win for RUN, the company’s customers, and its corporate partners who receive a sizable tax break by going through RUN.
If the Biden administration puts the transition to renewable energy into high gear, RUN has the potential to double in size within the next three years. Add in the fact that falling interest rates are helping RUN finance even more solar system installations across the long haul at lower costs and there is even more reason to be optimistic for the company’s prospects moving forward.
JKS is the world’s top solar panel manufacturer. The company launched as a wafer manufacturer back in ’06, before the point at which it became a publicly-traded company.
JKS is ranked 4th out of 17 stocks in the Solar space. Investors who would like to learn more about the solar industry can do so by clicking here. While many other solar industry stocks are trading at a forward P/E ratio above 100, JKS is comparably affordable, with a forward P/E ratio of an attractive 18.39.
JKS is currently trading well below its 52-week high ceiling of $90.20. The future looks bright for JKS as its margins have been improving over the past couple of years. JKS leadership deserves credit for reducing costs while expanding profit margins, ultimately setting the stage for JKS to have a truly spectacular year ahead.
ENPH shares were trading at $205.70 per share on Thursday morning, up $3.63 (+1.80%). Year-to-date, ENPH has gained 17.23%, versus a 4.57% rise in the benchmark S&P 500 index during the same period.
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About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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