The clean energy industry, which has exhibited impressive momentum over the past year, based primarily on investor optimism over its growth prospects, has begun seeing concrete developments toward a green future. Within less than two months of assuming office, President Biden has rejoined the Paris Climate Accord as well as rescinded the Keystone XL pipeline permit, which allowed fracking activities at the Arctic National Wildlife Refuge.
The alternative-energy industry’s solid stock market performance is evident in the iShares Global Clean Energy ETF’s (ICLN) 92.6% gains over the past year.
In tune with Biden’s $2 trillion plan to make the United States carbon neutral by 2050, the International Energy Agency (IEA) forecasts that renewable energy will overtake coal to become the largest source of electricity generation worldwide by 2025. Therefore, we think renewable energy companies Hubbell Incorporated (HUBB) and Hallador Energy Company (HNRG) will deliver solid returns in the coming months.
Hubbell Incorporated (HUBB)
Headquartered in Shelton, Connecticut, HUBB is engaged in the design manufacture and sale of electrical and electronic products for a range of non-residential and residential construction, industrial and utility applications. The company operates primarily through two segments — Electrical and Power. The Electrical segment consists of businesses that sell stock and custom products, including standard and special application wiring device products and components and assemblies for the natural gas distribution market. The Power segment consists of operations that design and manufacture various distribution, transmission, substation and telecommunications products that are used primarily by the electrical utility industry.
Last month, the company’s Board of Directors declared a regular quarterly dividend of $0.98 per share on the company’s common stock, payable on March 15, 2021. Following David G. Nord’s retirement on October 1, 2020 as the company’s CEO, Gerben W. Bakker was appointed as the President and CEO of HUBB.
For the fourth quarter ended December 31, 2020. the company’s net sales were reported to be $1.04 billion. In the Utility solution segment, its power system sales increased 5% year-over-year. Moreover, its Utility Solutions segment’s operating income increased 12.8% year-over-year to $70.60 million, while its adjusted operating margin for the same segment increased 210 basis points to 17.5%.
A consensus EPS estimate of $2.26 for the quarter ending June 30, 2021 represents an improvement of 20.9% year-over-year. Moreover, HUBB has surpassed the consensus EPS estimates in three of the trailing four quarters. The consensus revenue estimate of $1.15 billion for the same quarter ending June 30, 2021 represents an 11.5% rise on a year-over-year basis.
The stock has gained nearly 30% over the past year and closed yesterday’s trading session at $177.50.
HUBB’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Momentum, and B for Stability and Quality. We have also graded HUBB for Sentiment, Growth and Value. Click here to access all HUBB’s ratings.
HUBB is ranked #15 of 59 stocks in the B-rated Industrial – Equipment industry.
Hallador Energy Company (HNRG)
HNRG is an oil and gas exploration company focused on the development of coal reserves in the Illinois Basin. The company, through its subsidiary Sunrise Coal, LLC, is engaged in coal mining in the state of Indiana, serving the electric power generation industry. HNRG’s projects include Carlisle Mine, Ace in the Hole Mine, Oaktown 1 Mine, Oaktown 2 Mine and Bulldog Mine. The company is also involved in gas exploration activities in Indiana.
Last December, the company received a notification letter from The Nasdaq Stock Market confirming that the company had regained compliance with Nasdaq’s minimum bid price requirement under Listing Rule 5550(a)(2).
HNRG is scheduled to release its fourth quarter and fiscal 2020 (ended December 31, 2020) financial results on March 8, after the market closes. The company’s total revenue has increased more than 25% sequentially to $65.13 million for the third quarter ended September 30, 2020. It reported net income at $1.92 million for the third quarter, which is a huge improvement considering the company’s net loss of $3.72 million for the third quarter of 2019. Its adjusted EBITDA has also increased 63.4% year-over-year to $17.08 million.
A consensus EPS estimate of $0.05 for the quarter ending March 31, 2021 represents an improvement of 141.7% year-over-year. Moreover, the company’s EPS is expected to grow 1250% for the fiscal 2021.
The stock has gained 62.3% over the past three months and closed yesterday’s trading session at $1.72.
HNRG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
The stock has an A grade for Momentum and B for Sentiment, Growth and Value. We have also graded HNRG for Stability and Quality. Click here to access all HNRG’s ratings.
HNRG is ranked #1 of 8 stocks in the Coal industry.
The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
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HUBB shares were unchanged in after-hours trading Friday. Year-to-date, HUBB has gained 13.84%, versus a 1.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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