2 Low-Risk Alternative Energy Stocks To Buy

alternative energy, solar energy, wind energy

With the clean energy revolution in full swing, these two low-risk alternative energy stocks are a safe way for conservative investors to play the trend.

Alternative energy, also referred to as renewable or clean energy, has been a story that’s been knocking at the door for a while now. But lately, a certain critical mass in growth and development seems to be taking place. The market usually gets it. And it’s telling us something.

The iShares Global Clean Energy ETF (ICLN), which tracks 30 stocks in the Global Clean Energy Index, has recently caught fire after going nowhere for more than a decade. ICLN soared 103% over the past year and 180% for the past two years, compared to S&P 500 returns of 28% and 46%, respectively, over the same period.

Consider the recent performance of some of the big players in the clean energy space. Electric car company Tesla (TSLA) has soared 1,140% in the last two years. Hydrogen fuel cell company Plug Power (PLUG) moved 939% higher in just the last year. At the same time, the energy sector, which is primarily constituted of fossil fuel companies, has been by far the worst-performing sector of the market in just about every measurable period over the last 10 years.

What’s going on?

It appears that the technology has developed to a crucial level were clean energy is cheaper and makes more economic sense. Success breeds success. And more and more companies are getting involved.

Alternative energy has been by far the fastest-growing energy source for a while, with usage doubling in the first 18 years of this century. But it’s about to really take off now. The International Energy Agency (IEA) estimates that global renewable power supply will grow 50% in just the next five years.

The outperformance of clean energy stocks may just be getting warmed up. The Biden Administration will surely focus on the climate change agenda. That means more tax breaks and subsidies and other goodies for related companies. But even more importantly, the focus will draw still more investor attention to the booming growth in alternative energy. And investor intrigue will only accelerate.

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