If you’re in limbo about which companies to invest in, maybe solar stocks should be your next stop.
It’s never been a better time for the solar industry. This is due to one obvious reason: the current friendly regulatory environment for U.S.-based solar manufacturers. Recently, the Biden admin raised tariffs on solar cells from China — a move that will boost domestic production at home, cut down on reliance on foreign imports and allow American solar companies to thrive.
The other rather unexpected reason is the rising demand for AI applications, which is projected to boost the adoption of solar power.
Major tech companies are likely to gravitate towards solar energy, which is cheaper and more environmentally friendly, to power large, energy-hungry data centers to support their AI systems.
This is good news for solar investors, but you need to identify solar stocks with a solid track record to make the best out of it. These three picks fit in that category.
Array Technologies (ARRY)
Array Technologies (NASDAQ:ARRY) is a solar manufacturer whose products optimize the orientation of solar panels. Its panels move and follow the sun throughout the day, rather than staying in one place — to maximize the generation of energy.
This simple value proposition is what has given the New Mexico-based firm a competitive edge in solar and enabled it to consistently post impressive growth metrics, with revenue growing each year over the past few years.
For instance, the company announced a total revenue of almost $1.6 billion for 2023, nearly double its revenue two years prior. And for its last quarter, Array announced it had secured $1.8 billion in new business, bringing its order book to over $2 billion.
This strong performance plus strong analyst ratings make Array a compelling choice for investors looking to buy solar stocks.
Clearway Energy (CWEN)
Though it delivered mixed results for its last quarter, Clearway Energy (NYSE:CWEN) projects its fundamentals will improve markedly in the foreseeable future.
The firm saw an improvement in metrics such as its quarterly dividend, which shot by 1.7% versus the previous year but incurred a net income loss of $46 million.
Despite the so-so performance, Clearway sought to reassure investors the company is on track to achieve its 2024 financial goals. Management divulged plans to invest in more locations and to secure new resource adequacy contracts for its Conventional fleet.
That roadmap for the company has proven persuasive for Wall Street analysts, who overwhelmingly rate Clearway a Buy — making it an interesting choice for solar stocks.
Clearway is one of the largest companies in the U.S. that builds and operates solar energy projects. It currently has solar projects in 19 states and is developing more in 16 states.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) shares opened the year trading at a ballpark of $170 before going on to fluctuate dramatically throughout the year. The most favorable period for investors who got in earlier was late May through mid-June, during which the stock traded at an average of $270 apiece.
Going by its financial fundamentals, First Solar is one of the best picks for solar stocks at the moment. It registered a robust performance in Q1 of 2024, with its revenue increasing 45% year-on-year and its net profit margins jumping over 28% — up from around 8% in the same period last year.
First Solar is likely to maintain this winning streak into the rest of the year, thanks to demand for solar energy and overall industry tailwinds. Also, its proprietary thin film Cadmium Telluride (CadTel) technology, which has allowed it to carve out a niche in the solar business, will help it achieve more growth and revenue in the foreseeable future.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.