The energy industry has managed to hold up well through the market collapse despite the ongoing COVID-19 pandemic. Higher commodity prices have benefited companies, and management teams have been more cautious with expansion, resulting in a more stable industry.
While not every energy stock is a great buy, a few stand out as potential opportunities for investors looking for exposure to the sector.
First Solar
A top solar manufacturer, has once again become a growth stock in the renewable energy industry. The company has strong operational momentum and has tripled its backlog demand to 67.7 GW.
First Solar is increasing its capacity from 9.8 GW in 2022 to 20.1 GW in 2024. Moreover, new plants in the U.S. and India are coming online, and the company is benefiting from a better policy environment in the U.S.
The Company is improving its efficiency and costs compared to commodity suppliers, and management expects net sales of $3.4 billion to $3.6 billion this year. The gross margin is expected to reach 35% or higher. As the company scales operations, it should be more profitable.
Brookfield Renewable Partners
A Prominent Financier in the Renewable Energy Industry Brookfield Renewable Partners is one of the most prominent financiers in the renewable energy industry.
The company generated $1 billion, or $1.56 per share, in funds from operations in 2022, an increase of 8% from a year ago, and growth should continue. With 19 GW of assets being constructed and a pipeline of 110 GW, Brookfield Renewable allocates a part of its funds to pay off debts and procure assets for expansion.
But the goal is to grow the dividend 5% to 9% per year long-term, and the current 4.6% dividend yield will grow as a result. In the renewable energy asset business, Brookfield Renewable is a leader and a stock to hold for a very long time.
ConocoPhillips
A Highly Profitable Oil and Gas Company The oil and gas business has changed a lot over the last decade, and ConocoPhillips is now a cash machine in the energy industry, generating record amounts of cash.
Management can buy back cash or pay dividends to shareholders. Higher interest rates and more stringent investor demands for returns are having a positive impact on oil and gas companies, and ConocoPhillips is one of the most profitable oil and gas companies.
The Future of Energy Despite the ongoing pandemic, the energy industry is holding up well, and higher commodity prices have benefited companies. Energy stocks such as First Solar, Brookfield Renewable Partners, and ConocoPhillips are diverse and worth considering.
These companies are industry leaders in energy and will generate value for shareholders for a long time. Whether it’s growth or dividends, there’s a lot to like for shareholders in the future of energy.
