The first Earth Day was held on April 22, 1970, and was created in response to an oil spill during the previous year that dumped more than three million gallons of fuel into the Pacific Ocean and killed over 10,000 sea mammals and birds.
Fast-forward 51 years and Earth Day observances are now focused on the challenges created by global climate change and ongoing efforts to mitigate the seemingly endless assaults on the ecosystem.
Environmentalism and investing do not need to be considered as parallel pursuits. Indeed, a great many public companies are actively involved in environmental preservation. On this Earth Day, let’s hold up a spotlight – solar powered, of course – on five stocks that could bring multiple hues of green to a portfolio.
American Waterworks Company Inc. AWK
This Camden, New Jersey-based company first turned on its faucets in 1886. Today, American Waterworks defines itself as the “largest and most geographically diverse U.S. publicly-traded water and wastewater utility company,” serving more than 15 million people in 46 states.
The company recorded 2020 net income of $715 million, up from $654 million one year earlier. President and CEO Walter Lynch referred to 2020 as an “unprecedented year,” albeit in a positive way with “approximately $1.9 billion in capital investment, continued cost management, success in growth with 23 completed regulated acquisitions, the addition of our 17th military installation contract and the execution of enhanced COVID-19 safety protocols.”
As a result of its 2020 performance, American Waterworks reported results of $3.91 per share, up from the previous year’s $3.43 per share, and forecasted 2021 diluted earnings per share in a guidance range of $4.18 to $4.28.
American Waterworks opened its Earth Day trading at $160.97, closer to its 52-week high of $172.56 than to its 52-week low of $112.50.
Related Link: Companies around the world are shifting gears towards clean technology to adhere to more sustainable business practices. Check out Benzinga's Cleantech Small Cap Conference on April 22 to learn more!
Avangrid, Inc. AGR
This Orange, Connecticut-based subsidiary of Spain’s Iberdrola S.A. is an energy services holding company with a bifurcated mission of power transmission serving 3.5 million customers through its eight utilities in the Northeast and the development of renewable energy generation facilities.
The company’s subsidiary Avangrid Renewables is on the cusp of making energy history with Vineyard 1, a $2 billion project that will encompass 62 GE Haliade-X turbines 15 miles off the Martha Vineyard coast with the capacity to generate 800 MW of electricity through two export cables buried under the Atlantic seabed.
Avangrid generated net income of $581 million, or $1.88 per share, during 2020. The company offered a 2021 earnings guidance of $2.15 to $2.35 per share.
“I am excited about the promise for 2021 and beyond,” said CEO Dennis V. Arriola. “We have ambitious goals and are uniquely positioned to drive the energy transition in the U.S.”
Avangrid’s stock arrived on Earth Day at $52.21, closer to its 52-week high of $56.20 and distant from its 52-week low of $38.78.
Ormat Technologies Inc. ORA
Headquartered in Reno, Nevada, Ormat develops geothermal and recovered energy generation power plants. Its geothermal and solar generating portfolio totals 932 MW and is spread across the U.S., Kenya, Guatemala, Indonesia, Honduras and Guadeloupe while its 83 MW energy storage portfolio is concentrated in the U.S.
Ormat’s most recent achievement was the April 1 commencement of the 10 MW/40 MWh Vallecito Battery Energy Storage System (BESS), which will provide local resource adequacy to Southern California Edison under a 20-year energy storage resource adequacy agreement. It's now developing a 25 MW battery energy storage system in Upton County, Texas, which is scheduled to begin commercial operation before the end of 2021.
The company reported $705.3 million in revenue in 2020, down from $746 million in 2019. Its net income of $85.5 million was lower than 2019’s $88.1 million, and its diluted earnings per share of $1.65 were less than the previous year’s $1.72.
CEO Doron Blachar acknowledged the multiple challenges of 2020 but insisted 2021 will compensate generously.
“With the tail wind of governments’ support around the world for renewable energy, we are increasing our capital expenditures for 2021 as we are confident with our solid growth plans aiming to increase our combined geothermal, energy storage and solar generating portfolio to approximately 1.5 GW by 2023 with a significant contribution coming from our energy storage business,” Blachar said.
Ormat began trading at $116.50, closer to its 52-week high of $128.87 than to its 52-week low of $53.44.
Watch investor presentations and interviews with companies on the frontier of the renewable resources industry.
Polaris Infrastructure Inc. RAMPF
Formerly known as Ram Power corporation, this Toronto-headquartered company acquires, develops and operates renewable energy projects in Latin America. Through its subsidiaries, the company owns and operates the 72MW San Jacinto geothermal project in northwest Nicaragua and three run-of-river (ROR) hydroelectric facilities in Peru with the capacity levels of roughly 5 MW, 8 MW and 20 MW, respectively.
Polaris generated $74.7 million in revenue from energy sales in 2020, approximately 5% higher than the previous year. compared to the same period in 2019. The Company generated $40.3 million in net cash flow from operating activities and $48.4 million in operating cash flow, finishing the year with a cash position of $60.1 million.
The company began 2021 by extending the period of exclusivity for the Memorandum of Understanding (MOU) signed in 2020 to acquire the owner of a Panama-based 10 MW ROR hydro project called Chuspa from Navitas Holdings Inc. of Panama to June 30. The pandemic prevented construction on the project last year, but the company is aiming to start work during the second quarter of this year.
Polaris trades at $15.51, near its 52-week high of $19.25 and far from its 52-week low of $7.75.
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Sunrun Inc. RUN
This San Francisco provider of residential solar panels and home batteries received initiated coverage this week from Evercore ISI at Outperform and an $87 price target. Analyst James West pegged Sunrun as “the clear U.S. residential solar market leader and as such enjoys scale advantages in a massively underpenetrated market.”
West also pointed out the company’s $4.2 billion in 2020 net earning assets, adding its’ 550,000 customers will allow the company to “upsell and cross-sell opportunities.”
Sunrun achieved total revenue of $922.2 million in 2020, up from $858.6 million in 2019. Customer agreements and incentives revenue were $484.2 million last year, up by 25% compared to 2019, but solar energy systems and product sales revenue were $438 million, down 7% year-over-year.
The expenses and restructuring costs from Sunrun’s acquisition of Vivint Solar last year were $58.9 million in 2020. The net loss attributable to common stockholders was $173.4 million, or $1.24 per share.
“Extreme weather events and power outages necessitate a transition to a clean and decentralized energy system,” said CEO Lynn Jurich. “Sunrun is leading this change with affordable local solar and battery solutions, delivering reliable clean energy to American households and supporting grid stability.”
Sunrun trades around $52.22, halfway between its 52-week high of $100.93 and its 52-week low of $12.16.
(Image by Kevin Gill / Wikimedia Commons.)
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