With certain solar stocks rebounding, now may be a good time to buy in. Below are three of the smartest solar stocks to buy with just $1,000.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) is currently a key part of the solar panel supply chain. The solar firm manufactures photovoltaic solar modules with a thin film semiconductor technology that ultimately provides a lower-carbon alternative to conventional crystalline silicon PV solar modules. The energy transition and generous government subsidies have helped to transform First Solar into a force to be reckoned with in the space. First Solar reported $3.3 billion of revenue in fiscal year 2023, growing revenue by 26.7% on a year-over-year basis. The company also generated $830.8 million in net income, representing a margin of slightly over 25%.
Additional tariffs on solar products that the Biden Administration recently approved will likely be a growth catalyst for First Solar on a going-forward basis. In particular, the current administration has imposed a 50% tariff on Chinese solar cells, which will ultimately benefit domestic companies.
FSLR shares have risen nearly 45% on a year-to-date basis, but since the solar module manufacturer trades at a relatively cheap 18.5x forward earnings, it still could make a good long-term investment.
Canadian Solar (CSIQ)
Canadian Solar (NASDAQ:CSIQ) has had less success over the past 12 months. The solar module and battery storage maker has seen its share price plummet 40% since the start of the year. That decline goes even further if we look at where its share price was a year ago. Sluggish growth and a legal battle have made investors weary of the stock. In particular, at the end of the first quarter, Maxeon Solar Technologies (NASDAQ:MAXN) filed a lawsuit against Canadian Solar in the U.S., accusing the company of infringing on its patent for its tunnel oxide passivated (TOP) contact solar cell technology. TOPCon modules will account for around 70% of Canadian Solar’s shipments this year, and a patent lawsuit could imperil those sales.
Fortunately, Canadian Solar has maintained its U.S. operations are still functioning normally. This would not be the first lawsuit in the solar panel space and it will likely get settled in a manner that’s not very obstructive to Canadian Solar’s future sales.
Canadian Solar’s stock trades at 5.4x earnings, and the company generated $7.6 billion in sales in 2023, making it a sizable player that investors should consider.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) makes the final entry on the list. The firm operates as both a utility company as well as a generator of energy from solar, wind and natural gas. NEE has made significant strides to become carbon neutral. Those continue to show in successive earnings reports that see the company’s renewable energy portfolio increase significantly in size.
In NextEra’s first quarter earnings report for fiscal year 2024, the firm’s NextEra Energy Resources unit had one of its quarters for new renewables and storage origination. The business unit added approximately 2,765 MW to its energy backlog, as well as approximately 1,545 MW of solar, 145 MW of wind, 1,025 MW of storage and 50 MW of wind repowering to its backlog.
NextEra’s Florida Power & Light (FPL) utility unit also placed 1,640 megawatts of solar energy into service.
NEE’s share price is essentially trading flat for the year, but as more of these solar and wind projects come online and the market continues to warm up to solar stocks again, NEE will likely see price growth.
On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.