Are these the best green energy stocks to watch for 2022?
Clean energy has become important in the portfolio selection of some investors’ environmental, social, and governance (ESG) strategy. Discover whether these are the best green energy stocks to watch this year.
What’s on this page?
What you need to know about the green energy industry
Green energy is clean power that’s environmentally friendly, which means it doesn’t cause harm to the earth, and its more sustainable. We tend to confuse clean energy with renewable energy, but they’re different in a few ways.1
Nature serves as a source of renewable energy by generating solar power from the sun and wind energy from rotating turbines. Green energy, due to its clean nature, produces little to no pollution and is a good alternative in providing a sustainable environment.
Nuclear power is also a clean energy source with zero-carbon emissions and helps reduce air pollution. Nuclear comes from uranium, so while its categorised as clean energy, it’s not renewable. It’s generated through fission, a process of splitting uranium atoms to produce energy.1, 2
The green energy space has proven to be resilient despite supply chain constraints, high shipping costs, and increased pricing for key commodities during the Covid-19 pandemic. Instead, the industry has seen some technology improvements and increased competition among battery storage companies. Governments have also introduced mandates to increase the use of clean energy as part of promoting environmental sustainaiblity.3
As more awareness is placed on climate change efforts, investors are also aligning their portfolios towards companies that are either directly involved in green energy or are using this clean power. This type of investing that follows ESG strategies is likely to lead to a positive outlook for green energy stocks for the rest of the year and beyond.3
How to trade or invest in green energy shares
Trading and investing are two different ways you can take a position green energy shares. When trading via spread bets or CFDs, you'll be speculating on the price movements of the underlaying asset, meaning you won’t take ownership of the stock. When investing, you’ll buy and own the stock outright. You can trade or invest in green energy stocks by following these steps:
- Learn more about the green energy industry
- Choose whether to trade or invest
- Open an account
- Place your trade
Learn more about the green energy industry
If you don’t know where to start your research about the green energy industry, you can read our article on green energy stocks. Once you have an idea of the green stocks that pique your interest, you can open a demo account with us.
The demo account dashboard will give you access to the price chart of the green energy stock of your choice so you can monitor its past performance. Note that past performance is not a guarantee of future results. Under the stock’s price chart you’ll also see a ‘News and analysis’ section that you can further use for your research to make an informed decision.
Choose whether to trade or invest
With us, depending on your risk appetite, you can decide to invest in green energy stocks and exchange traded funds (ETFs). Alternatively, you can trade green energy stocks and options using spread bets and CFDs.
When investing in green energy stocks and ETFs, you can hold onto the asset until it appreciates before selling it at a profit.
If you choose to trade green energy stocks and options using leveraged products – spread bets and CFDs – ensure you understand how they work. When trading with leverage, you’ll need to pay an initial deposit called margin to open a position and increase your exposure to your green energy stock of choice.
Keep in mind that when trading with leverage, your profit or loss is determined by your position size, not just margin. This means that while leverage can amplify your profits, it’ll magnify your losses. Remember to manage your risk carefully.
Also consider whether you can afford to risk losing your money.
Open an account
If you choose to trade green energy shares and options, then you can apply for a spread betting or CFD trading account with us. If, on the other hand, you opt to invest, then you can open a share dealing account with us so you can buy and own green energy stocks and ETFs.
Once you submit your application, we’ll verify your details and if approved, you can deposit funds and start trading or investing with us. You can withdraw your funds from your account as and when you want.
If you’re still not confident about your trading or investing skills, then you can open a demo account and sharpen your skills using £10,000 worth of virtual funds in a risk-free environment.
Place your trade
- Open your spread betting account or CFD trading account if you’ll be trading green energy shares or options. Open a share dealing account if you've chosen to invest in green energy stocks or ETFs
- From the left-hand menu, search for the stock you’re looking to trade or invest in and select it
- Open the deal ticket, choose to ‘buy’ if you think the price will rise, or ‘sell’ if you believe it’ll fall
- When trading or investing, set the size of your trade, and select your stop-loss and limit levels
- Open and monitor your position
5 best green energy stocks to watch
Note that the following shares have not been chosen as the 5 best green energy stocks in the world alone, but rather based on various factors including market cap, future growth prospects, dividends and latest results.
McPhy Energy is a France-based company that specialises in zero-carbon hydrogen production and distribution equipment (electrolysers and refuelling stations). It develops hydrogen storage and production solutions for the merchant hydrogen market and renewable energy industry.4
Its products include the electrolyser, a hydrogen generator that uses water as a raw material, solid hydrogen storage solutions and other ways that integrate electrolysers. The company has offices in France, Italy and Germany and distributors across Europe, Asia and the Americas.4
In its financial year 2021 (FY21) results, the group reported €13.1 million in revenue, a decline from €13.7 million in financial year 2020 (FY20). The revenue is composed of 55% electrolysers supply and at 45% McFilling hydrogen stations. The group attributed this decrease in the expected growth in first half (H1) 2021 to the ‘wait-and-see’ approach of certain stakeholders that were dependent on public financing mechanisms.5
Despite delays in the launch of its major projects and the management of an industrial incident that resulted in an increased backlog, McPhy is positive backlogs will be cleared by its project portfolio deployment and intensified industrial efforts. The company also believes that the implementation of its scaling-up strategy, coupled with a solid financial situation will reinforce its growth outlook.5
Cameco is a uranium producer headquartered in Canada. It’s involved in the exploration for mining, milling, purchase and sale of uranium concentrate. Its fuel services segment involves the refining, conversion and fabrication of uranium concentrate, including the purchase and sale of conversion services.6
In its quarter four (Q4) FY21 results, the company reported net earnings of $11 million and adjusted net earnings of $23 million. These were said to be driven by normal quarterly variations in contract deliveries and the continued execution of the company’s strategy.7
The group had an annual net loss of $103 million and adjusted net loss of $98 million due to the continued execution of its strategy and its proactive measures during the Covid-19 pandemic. Some of these precautionary measures included the suspension of production at its Cigar Lake operation, which resulted in a low level of uranium being produced and affecting its bottom line.7
The group is optimistic that long-term contracts will continue to strengthen its price environment in the uranium segment of the business.
BWX Technologies (BWXT) is a specialty manufacturer of nuclear components. It develops and provides services in nuclear technologies. It also designs and manufactures precision nuclear components, reactors and nuclear fuel use by the navy. Its operations are done through three segments: Nuclear Operations Group (NOG), Nuclear Power Group (NPG) and Nuclear Services Group (NSG).8
NOG manufactures reactors for the United States (US) Naval Nuclear Propulsion Program for use in submarines and aircraft carriers. NOG’s revenue for FY21 was more than $1.6 billion, a 1% decrease compared with that in FY20. The group attributed this to the higher labour volume and increased nuclear fuel and uranium down-blending, which they said was offset by lower long-lead material production.8,9
NPG produces commercial nuclear steam generators, fuel and its handling systems, pressure vessels, reactor components, heat exchangers, to name a few. NPG’s FY21 revenue was $407 million, a 10% increase compared to FY20. This was driven by higher fuel production and handling, higher nuclear power field service activity and increased nuclear medicine demand, which was partially offset by lower component manufacturing volume.8, 9
NSG provides various services to the US government, including nuclear materials and environmental management facilities. NSG segment’s FY21 operating income was $27.9 million compared to the previous year. This was an overall 8% increase the group attributed to better contract performance and lower costs that were offset by increased business development expenses and lower income from completed contracts.8,9
The company manufactures fuel cell technology platforms. It offers sub-megawatt solutions for smaller power consumers in Europe. Its customers include utility companies, municipalities, universities, hospitals, government entities or military bases and several industrial and commercial enterprises.10
In its financial results, a $31.8 million revenue was reported for quarter one (Q1) financial year 2022 (FY22) compared to $14.9 million in Q1 FY21 due to the delivery of six fuel cell modules to Korea Fuel Cell (KFC) under the settlement agreement. The settlement agreement requires KFC to place an additional order for eight modules on or before 30 June, 2022.11
The company’s Q1 FY22 operating expenses increased to $41.9 million from $10.8 million in Q1 FY21. Results for Q1 FY22 were negatively impacted by a non-recurring expense of $24 million related to payment of legal fees to our outside counsel in connection with settlement of the POSCO Energy dispute. POSCO is the largest private energy producer in South Korea.11
The increase in expense was due to marketing and consulting costs due to the company’s rebranding exercise to accelerate its sales and commercialisation efforts, and talent acquisition. It also spent $5 million on research and development on its hydrogen commercialisation initiatives in Q1 FY22.11
A $2.9 million gross loss was reported for Q1 FY22 compared to $3.6 million in Q1 FY21. The decrease in gross loss was, in part, due to revenue recognised in the sales of modules during the quarter to KFC.11
In the same period, the company realized a lower service margin as a result of no new module replacements, including $3 million of non-recoverable costs due to the Toyota construction project. This loss included the $1 million asset impairment charge related to a legacy conditioning facility at its Danbury headquarters in Connecticut, US.11
Energy Fuel (EF) is a US based company that’s involved in conventional and in situ recovery (ISR) uranium extraction and recovery, which includes exploration, permitting, and evaluation of this metal’s properties. The company also extracts and recovers vanadium from certain of its uranium projects.12
The company reported a net income of $1.5 million for FY21 compared to below the $1 million it generated the previous year. This was since the company chose not to sell any uranium in FY21, likely due to a low number of contracts during the Covid-19 pandemic. The company is now actively engaged in pursuing selective long-term uranium sales contracts.13
Russia is a major supplier of uranium and nuclear fuel to customers in the US and Europe. And economic sanctions placed on Russia following its invasion of Ukraine have opened a gap for EF to grab some market share.
The company said its looking to increase its utility interest for long-term contracts. It’ll be pursuing uranium sales contracts with pricing and terms that return acceptable project margins, while also maintaining exposure to the increased potential of the uranium market.13
EF will also be deploying unique licenses, facilities, and expertise to recover elements required for carbon-free nuclear energy, electric vehicle powertrains and other clean energy and advanced technologies.
What is the most used green energy?
The most common green energies, that’re both sustainable and eco-friendly include wind, solar and water energy. Turbines generate wind energy using the rotating blades connected to the drive shaft. Another form of green energy is solar energy, which is produced from sun radiation, generating electricity. Hydroelectricity, also known as water energy, uses natural flowing water to generate power.
What are the benefits of green energy?
Green energy is beneficial since it’s environmentally friendly and doesn’t produce greenhouse gasses that pollute the earth. Using green energy doesn’t only aid in slowing down climate change, but it also diversifies the power supply.
Green energy is sustainable. The world, including businesses and governments, have seen its importance, and have begun migrating towards its use to try and preserve the earth for coming generations. For instance, some governments, like the UK, have mandates to increase the manufacture of hybrid and or full electric vehicles over those using fossil fuels like petrol and diesel.
Green energy stocks summed up
- Green energy is beneficial in that is environmentally friendly, meaning it does not produce greenhouse gasses that pollute the earth, leading to air pollution and subsequently climate change
- The most common green energies, that’re both sustainable and eco-friendly include wind, solar and water energy
- Nuclear power is also a clean energy source with zero-carbon emissions and helps reduce air pollution
- Some governments have also introduced mandates to increase the use of clean energy as part of promoting environmental sustainability
- Trading and investing in green energy stocks are different. When trading via spread betting and CFD trading, you'll be speculating on the price movements of the underlying asset, while when investing you’ll buy and take ownership of the stock outright
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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