Top Solar Stocks for Q4 2020
The solar energy industry has grown rapidly even as fossil fuels remain the dominant source of global energy use. Solar industry companies come from multiple sectors, including utilities, industrial, and energy, and include popular stocks such as First Solar Inc. (FSLR) and Sunrun Inc. (RUN). While some large utilities and energy companies have solar and renewable energy divisions, these businesses typically are not included in the industry’s listings because the parent’s primary focus is not solar.
Solar stocks, as represented by the Invesco Solar ETF (TAN), have dramatically outperformed the broader market over the past year. TAN has provided a total return of 77.3% over the last 12 months, well above the Russell 1000’s total return of 13.8%, as of September 11, 2020. All statistics in the tables below are as of September 14.
Here are the top 3 solar stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Solar Stocks
These are the solar stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Solar Stocks|
|Price ($ )||Market Cap ($ B)||12-Month Trailing P/E Ratio|
|Canadian Solar Inc. (CSIQ)||28.42||1.7||6.7|
|JinkoSolar Holding Co. Ltd. (JKS)||21.14||0.9||9.7|
|Daqo New Energy Corp. (DQ)||112.57||1.6||26.9|
- Canadian Solar Inc.: Canadian Solar is a Canada-based solar power company that designs, manufactures, and sells solar module products that convert sunlight into electricity. The company posted a 66.1% decline in net income as net revenue fell 32.9% in Q2 2020, which ended June 30, 2020. Canadian Solar indicated that project execution and sales schedules were delayed as a result of the impact of COVID-19.
- JinkoSolar Holding Co. Ltd.: JinkoSolar is a China-based solar energy company that manufactures solar products including silicon wafers, solar cells, and solar modules. The company also offers solar system integration services.
- Daqo New Energy Corp.: Daqo New Energy is a China-based solar energy company that manufactures polysilicon for distribution to manufacturers of solar technology products.
Fastest Growing Solar Stocks
These are the solar stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Two of the top companies on our screen posted rising earnings, while the third moved into the black after losing money in the same period a year earlier.
|Fastest Growing Solar Stocks|
|Price ($ )||Market Cap ($ B)||EPS Growth (%)|
|JinkoSolar Holding Co. Ltd. (JKS)||22.63||1.0||159.1|
|SolarEdge Technologies Inc. (SEDG)||195.92||9.8||6.1|
|First Solar Inc. (FSLR)||71.25||7.6||N/A|
- JinkoSolar Holding Co. Ltd.: See above for company description.
- SolarEdge Technologies Inc.: SolarEdge Technologies is an Israel-based solar energy company that provides solar power optimization and photovoltaic monitoring solutions. The company provides optimizers, inverters, monitoring equipment, tools, and accessories for the purpose of power harvesting, conversion, and efficiency. SolarEdge reported net income growth of 11.4% on revenue growth of 2.1% in Q2 2020, which ended June 30, 2020.
- First Solar Inc.: First Solar designs and manufactures solar power systems and solar modules. The company utilizes a thin film semiconductor technology to manufacture electricity-producing solar modules. The company reported positive earnings per share (EPS) of $ 0.35 in Q2 2020, which ended June 30, 2020. It was a significant change from the loss reported in the same three-month period a year ago. The company said that its financial results have not been materially impacted by COVID-19, but that uncertainties remain regarding the severity and duration of the pandemic.
Solar Stocks with the Most Momentum
These are the solar stocks that had the highest total return over the last 12 months.
|Solar Stocks with the Most Momentum|
|Price ($ )||Market Cap ($ B)||12-Month Trailing Total Return (%)|
|Vivint Solar Inc. (VSLR)||30.52||3.8||315.8|
|Sunrun Inc. (RUN)||55.88||7.1||257.3|
|Enphase Energy Inc. (ENPH)||65.10||8.2||163.3|
|Invesco Solar ETF (TAN)||N/A||N/A||77.3|
- Vivint Solar Inc.: Vivint Solar is a residential solar energy provider that designs, installs, and maintains photovoltaic systems. A class action lawsuit was filed against Vivint this week for failing to disclose material information concerning a merger agreement between the company and Sunrun Inc. The merger, through which Sunrun would acquire Vivint in an all-cash transaction worth $ 3.2 billion, was announced in early July.
- Sunrun Inc.: Sunrun is a provider of residential solar electricity. The company designs, develops, installs and provides maintenance of solar energy systems. Sunrun announced last week that the U.S. Department of Justice had granted an early termination of the antitrust waiting period for its proposed acquisition of Vivint Solar.
- Enphase Energy Inc.: Enphase Energy provides solar energy cells and monitoring equipment for distributors, large installers, original equipment manufacturers, strategic partners, and homeowners.
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