3 “Robust Purchase” Cleantech Shares to Snap Up Earlier than 2021


The cleantech industry, which includes solar, wind, and hydropower, has grown in importance around the world as concerns about climate change have risen. President-elect Joe Biden’s climatic ambitions have given cleantech stocks another boost as investors expect the world’s largest economy to be on its way to energy transition.

Cleantech companies are also constantly innovating, trying to address issues like storage capacity and cost. According to the International Energy Agency (IEA) report on Renewable Energy 2019, renewable energy capacity is expected to increase by 50% between 2019 and 2024, mainly led by solar.

The ETF iShares S & P Global Clean Energy Index Fund (ICLN), which aims to track the investment results of an index composed of global stocks in the clean energy sector, has gained 88% since the start of the year compared to the S & P 500’s return of 10.1% . Additionally, the economy is expected to be more favorable to renewable energy stocks as the president-elect is expected to make a historic investment in clean energy, climate research and innovation for the United States to achieve net zero emissions by 2050 at the latest.

As a result, cleantech stocks like Xylem Inc. (XYL), Enphase Energy, Inc. (ENPH), and Power Integrations, Inc. (POWI) are emerging leaders in their fields and are expected to perform well in 2021 and beyond.

Enphase Energy, Inc. (ENPH)

ENPH is the world’s leading supplier of solar plus storage systems based on microinverters. ENPH is headquartered in Petaluma, California and operates in more than 21 countries. Together with its subsidiaries, the company designs, develops and sells microinverter systems for the solar photovoltaic industry in the USA and internationally. The company has shipped more than 30 million inverters to date.

The company reported strong results for the third quarter (ending September 2020), largely driven by increasing demand for its micro-inverter products. ENPH delivered approximately 478 megawatts of DC power, or 1,442,743 microinverters. Revenue increased sequentially 42.2% to $ 178.5 million. Non-GAAP Gross Profit Margin rose to 41% due to disciplined pricing and expense management. While non-GAAP net income increased 5.8% year over year to $ 41.8 million, non-GAAP earnings per share increased 76.5% sequentially to $ 0.30.

Analysts expect ENPH’s revenue to grow 21.5% for the quarter ending December 2020 and 61.8% next year. The company’s EPS is projected to grow 34.7% annually this year, 44.5% next year, and 36.6% annually over the next five years. ENPH’s earnings surprise history looks impressive, with the company beating EPS consensus estimates for each of the past four quarters.

On November 16, ENPH entered into an agreement with MSpectrum, the renewable energy division of Manila Electric Company (MERALCO). MSpectrum will distribute the IQ 7 family of ENPH microinverters to residential and commercial installers in the Philippines in the first quarter of 2021. Earlier this month, ENPH announced a strategic partnership with DMEGC Solar Energy to develop highly efficient Enphase Energized AC (ACM) modules. for the European solar market for residential buildings. Cutler Bay Solar Solutions, Florida’s largest family solar plus storage installation company, has supplied more than 1.5 MWh of Enphase Encharge storage systems to Florida Homes. The share has gained 393.9% since the beginning of the year and is currently 3.1% below its 52-week high.

ENPH’s POWR ratings reflect this promising outlook. It has an overall rating of “Strong Buy” with an “A” for Trade Grade, Buy & Hold Grade and Peer Grade. It is number 1 among the 19 stocks in the solar industry.

Xylem Inc. (XYL)

Founded in 2011, XYL is a global leader in water technology dedicated to solving the world’s toughest water problems. The company enables customers to transport, purify, test and use water efficiently in public utilities, residential and commercial buildings, and in industrial and agricultural settings. As a global Fortune 1000 water technology provider, XYL operates in three segments: water infrastructure, applied water, and measurement and control solution.

XYL’s operating margin rose 520 basis points to 6% in the third quarter that ended September 2020. Earnings per share of $ 0.62 exceeded consensus estimate by 21.6%. In fact, XYL’s earnings surprise history looks impressive as the company missed the consensus estimate in just one of the past four quarters. Analysts expect XYL’s sales to grow 6.6% next year. The company’s EPS is projected to increase 73.9% for the quarter ended March 2021 and 35.6% next year.

A few months ago, with the help of Anglian Water, XYL took action to prevent water shortages in the UK. In the words of Patrick Decker, company president and CEO, “This project with Anglian Water and our managed network partner Arqiva illustrates the power of data and intelligent technology to solve water scarcity problems.” Last month, XYL received a dividend for the fourth quarter of $ 0.26 per share, payable on December 3rd. The stock closed Friday’s trading session at $ 94.38, up 19.8% year-to-date. It is currently trading 4.7% below its 52-week high of $ 99.06.

How does XYL stack up for the POWR ratings?

A for trade grade

A for Buy & Hold Grade

A for industry rank

A for the overall POWR rating

The stock also ranks fourth out of 38 industrial – manufacturing stocks.

Power Integrations, Inc. (POWI)

POWI has been operating for more than three decades, designing, developing, manufacturing, and marketing analog and mixed-signal integrated circuits, as well as other electronic components and circuits used in high voltage conversion. Using POWI’s EcoSmart energy efficiency technology, the company has avoided billions of dollars in energy waste and millions of tons of carbon emissions. The company’s integrated circuits enable compact, energy-efficient AC / DC power supplies for a wide variety of electronic products, including smartphones, devices, smart meters, LED lights and a wide range of industrial applications.

POWI revenue increased more than 6% year over year to $ 121.1 million for the third quarter through September 2020. This was primarily due to continued growth in fast charging of mobile devices and improved demand in the device market. Communications sales increased 32%. Net income increased 12.3% sequentially to $ 14.8 million. Earnings per share increased 2.6% year over year to $ 0.40.

Analysts predict POWI’s revenue will grow 13.5% in the quarter through December 2020 and 12.7% next year. The company’s EPS is projected to grow 21.1% annually this year, 12.9% next year, and 10.6% annually over the next five years. POWI’s earnings surprise history is impressive as the company beat EPS consensus estimates for each of the past four quarters.

Last month, POWI announced the MinE-CAP-IC for AC / DC converters with high power density and universal input, which reduces the volume of AC / DC converters by up to 40%. The MinE-CAP uses the small size and low RDSon of PowiGaN gallium nitride transistors to actively and automatically connect and disconnect segments of the bulk capacitor network depending on the line voltage conditions. The InnoSwitch IC family from POWI, introduced in 2014, exceeded deliveries of one billion units. Year-to-date, POWI is up 39.9%, closing Friday’s session at $ 69.18. In the past six months, POWI is up 25.1%.

It’s no surprise that POWI is rated “Strong Buy” on our POWR rating system. It also has an “A” for Trade Grade, Buy & Hold Grade, and Industry Rank, and a “B” for Peer Grade. It ranks 25th in the semiconductor and wireless chip industry with 86 stocks.

Would you like more great investment ideas?

9 “MUST OWN” growth stocks for 2021

Why investors are no longer interested in Covid-19

5 WINNING Stock Chart Patterns

ENPH shares were trading at $ 132.78 per share on Monday afternoon, up $ 3.19, up 2.46%. Since the beginning of the year, ENPH has gained 408.15%, while the benchmark index S&P 500 gained 12.41% over the same period.

About the author: Manisha Chatterjee

Manisha has had a keen interest in the stock market since she was a teenager. She studied economics in college and has a passion for writing which led to her career as a research analyst. More…

More resources for the stocks in this article


Please enter your comment!
Please enter your name here