3 Overvalued Renewable Energy Stocks To Avoid This Month

Growing concerns about global warming have compelled many countries to set sustainability goals and implement initiatives to achieve carbon neutrality over the next few decades. However, as many countries focus now on their economic revival from last year’s pandemic-led recession, climate change actions are to a degree on hold.

Though most of the developed countries plan to curb carbon emissions over the next several decades, only a handful of policies dedicated toward climate change have been passed into law globally. For example, even negotiations regarding President Biden’s proposed $2.3 trillion infrastructure package, which contains many climate change elements, have come to a halt in the U.S. Senate for now after Senate Republicans delivered a $928 billion counter offer to Biden’s proposal.

Image Source: Unsplash

Given this backdrop, renewable stocks NextEra Energy, Inc. (NEE - Get Rating), Plug Power, Inc. (PLUG - Get Rating), and Enphase Energy, Inc. (ENPH - Get Rating), prices for which skyrocketed over the past year on investor optimism, look extremely overvalued at their current levels. So, we think these stocks are best avoided now.

NextEra Energy, Inc. (NEE - Get Rating)

NEE generates, transmits, distributes and sells electric power to retail and wholesale customers worldwide. The company generates electricity through wind, solar, nuclear and fossil fuels, such as coal and natural gas. Through its subsidiaries, it also operates multiple commercial nuclear power units.

On April 1, 2021, NEE subsidiary Florida Power & Light Company (FPL), along with Gulf Power, announced plans to develop clean, zero-emissions energy solutions. By removing old and less efficient power plants, the company will make operational its largest solar-powered battery storage facility, along with seven new solar energy centers, by the end of this year, thus helping its customers save fuel costs. FPL forecasts nearly 40% of its power will be generated by zero-emissions energy sources by the end of the decade.

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Alpha Stockman 2 weeks ago Member's comment

You should really drop StockNews as a partner. Their research is always sloppy and articles often have errors. In this case, all of the earnings info is for Q1 21. #Enphase didn't have a loss, and their revenue was over 300M. i think the author accidentally used info from last year. $ENPH