Podcast: Renewable Energy and Sustainable Bank Stock Buys

Ethical & Sustainable Investing News to Profit By!

Podcast: Renewable Energy and Sustainable Bank Stock Buys include articles “The Top 3 Renewable Energy Stocks Targeting 50% Upside by 2028” and “Top 10: Sustainable Banks” from sustainabilitymag.com, and more.

By Ron Robins, MBA

Transcript & Links, Episode 132, June 14, 2024

Hello, Ron Robins here. So, welcome to this podcast episode 132 titled “Renewable Energy and Sustainable Bank Stock Buys.” It’s presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing mentoring, news, commentary, information, and resources.

Now, remember that you can find a full transcript, and links to content – including stock symbols and bonus material – on this episode’s podcast page located at investingforthesoul.com/podcasts.

Also, a reminder. I do not evaluate any of the stocks or funds mentioned in these podcasts, nor do I receive any compensation from anyone covered in these podcasts. Furthermore, I will reveal to you any personal investments I have in the investments mentioned herein.

Additionally, quotes about individual companies are brief. Please go to this podcast's webpage for links to the actual articles for more company and stock information. Also, some companies might be covered more than once and there are also 2 article links below that time didn’t allow me to review them here.

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The Top 3 Renewable Energy Stocks Targeting 50% Upside by 2028

As we approach the summer holiday period the number of suitable articles for this podcast usually declines. And that’s what’s beginning to happen now. However, there are still some great articles worth covering for you.

I’m going to start with this one titled The Top 3 Renewable Energy Stocks Targeting 50% Upside by 2028. It’s by Terel Miles and found on msn.com. Here’s some of what Mr. Miles says about his picks.

“1. First Solar (NASDAQ:FSLR)

The company has skyrocketed more than 60% year to date, and it is just getting started.

First Solar’s expertise spans the entire solar value chain, from module manufacturing to project development and energy services. Moreover, artificial intelligence is set to boost demand for solar and energy storage solutions in data centers. In Q1 FY24, revenue increased 45% year-over-year (YOY) to $794 million. Earnings per share (EPS) skyrocketed 456% YOY to $2.20 per share, with gross margins up sequentially. As the company ramps up manufacturing capacity in 2024, First Solar stock should certainly be kept on your radar.

2. NextEra Energy (NYSE:NEE)

As the world’s largest producer of wind and solar energy, NextEra is at the forefront of the clean energy transition.

NextEra Energy’s focus on innovation coupled with its strong financial performance, position it as a reliable investment choice… In the 2023 fiscal year…. revenue swelled 34% YOY to $28.11 billion, with EPS up 71% to $3.60 per share. They delivered extremely impressive results, amid inflation and higher interest rates. Its backlog also remains robust, as the company’s subsidiaries, FPL & NextEra Energy Resources, deliver best in class services… Management has forecast 10% dividend growth through 2026. This makes NextEra Energy’s stock one of the best renewable energy stocks to buy now.

3. ON Semiconductor (NASDAQ:ON)

is a global leader in power management and sensing solutions, playing a critical role in the advancement of renewable energy technologies. The company’s products are essential components in various renewable energy applications, from solar inverters, to electric vehicles and energy storage systems.

ON Semiconductor is having a tough year in 2024. It is still up against the slump in the EV market, as well as the broader slowdown in renewable energy projects. However, this is only temporary, and they have an exciting long term growth trajectory ahead. ON Semi’s powerful silicon carbide (SiC) platform appeals to a wide variety of industries. This includes automation, industrial, healthcare, and aerospace.

ON Semi is laying the foundation for accelerated growth over the next decade.”

End quotes.

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These Alternative Energy Stocks Are Poised for Takeoff

Continuing on this renewable energy theme is this second article titled These Alternative Energy Stocks Are Poised for Takeoff. It’s by Michael Lebowitz. It appeared on investing.com and offers his assessments of companies engaged in many aspects of the alternative energy sector. Here are some quotes from him.

“1. Battery Diversification May Be Critical

Global X Lithium & Battery Tech ETF (NYSE:LIT) is far and away the largest (of this sector’s etfs), with nearly $1.5 billion AUM. While it invests in companies with new battery technology, it also ‘invests in the full lithium cycle, from mining and refining the metal, through battery production.’ Its top three holdings are lithium producers.

Amplify Lithium & Battery Technology ETF (NYSE:BATT) is the second largest ETF with a mere $89 million in AUM. Like Global X Lithium & Battery Tech ETF, they invest in lithium producers like BHP (BHP) and Albemarle (NYSE:ALB).

If you want to make investments in individual companies, Tesla (NASDAQ:TSLA) (battery technologies), LG Chem (051910.KS) and Samsung SDI (006400.KS) are well-positioned in the industry.

2. Lithium Miners

Assuming lithium remains a crucial component in electricity storage batteries, its miners should do well, especially given the recent decline in lithium prices and the related stocks.

Albemarle (ALB) is the world’s top lithium producer and the largest producer by market cap. It is the only lithium producer of size based in the US. Like the rest of the alternative energy sector, its stock has traded poorly recently. However, with a forward P/E of 16, there is value if its revenues continue upward at their recent pace.

We caution you that lithium deposits are being actively explored. Assuming success, the lithium supply may limit the price appreciation of lithium.

3. Utility and Grid Operators

Utilities will generate more power, thus increasing their revenue. However, they must invest significant capital to modernize, expand, and reduce greenhouse emissions. (Here are some companies the author comments on.)

Dominion Energy (NYSE:D) in Virginia and Entergy (NYSE:ETR) in Texas are the two utility companies that may be the biggest beneficiaries of the growth of AI data centers. Both stocks have relatively low forward P/E’s of approximately 14 and dividend yields of 4.25% for Dominion Energy and 5.50% for Entergy. It will be crucial to follow their margins to see how effectively they offset the expansion costs with rising revenue.

Constellation Energy (CEG) and NextEra Energy (NYSE:NEE) are also worth tracking as they invest heavily in renewable energy infrastructure and will benefit from increased demand. We would add Duke (DUK) and Southern Company (NYSE:SO) to the list of companies to follow.

4. Technology and AI Firms

Companies specializing in AI software for energy efficiency and management will find opportunities in this evolving landscape. Some of the more prominent names in this sector include IBM (NYSE:IBM), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), and GE Vernova (NYSE:GEV).

5. Physical Plant Expansion

Companies that supply utility plants with generators, transformers, circuit breakers, and switchboards, among many other parts, will undoubtedly benefit from power grid expansion. (These include.)

GE Vernova, Eaton (NYSE:ETN), Quanta Services (NYSE:PWR), Emerson Electric (NYSE:EMR), and Siemens (ENR.DE).

6. Water/Cooling

The average data center uses 300,000 gallons of water a day to cool its equipment. That is the equivalent of the water used by 100,000 homes. Therefore, companies that can develop cheap cooling solutions for data centers will be in high demand. (Companies so engaged include.)

Vertiv Holdings (NYSE:VRT)… a leader in this segment. Its shares have risen tenfold since it went public in 2019 and now trades at a P/E of 100. It’s a high-risk, high-reward stock, not for the faint of heart.

7. Infrastructure ETFs

There are many other businesses set to profit from the coming infrastructure boom.

Those looking for a diversified investment approach in the power grid may want to explore thematic ETFs.

For example, the First Trust Clean Edge Smart Grid Infrastructure Fund (GRID) holds 103 positions. Beyond diversification and portfolio manager expertise, the fund can buy stocks in foreign markets, which many US investors do not have access to or are uncomfortable with.

iShares U.S. Infrastructure ETF (IFRA) is a similar fund with a different basket of stocks and approach toward investing in the industry.

The bottom line is we are confident the expansion and modernization of the power grid will be highly profitable for some companies… Diversification will prove to be essential for investors.”

End quotes.

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MTB Named A Top Socially Responsible Dividend Stock

Now many of you also like dividend-paying stocks, so I’m including this recent article on a socially responsible bank stock. It’s titled MTB Named A Top Socially Responsible Dividend Stock by Just2Trade and found at j2t.com. Here are some brief quotes from the article.

“M & T Bank Corp (Symbol: MTB) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, signifying a stock with above-average ‘DividendRank’ statistics including a strong 3.7% yield, as well as being recognized by prominent asset managers as being a socially responsible investment…

According to the ETF Finder at ETF Channel, M & T Bank Corp is a member of the iShares USA ESG Select ETF (SUSA), making up 0.10% of the underlying holdings of the fund, which owns $4,322,259 worth of MTB shares.

The annualized dividend paid by M & T Bank Corp is $5.4/share.”

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Top 10: Sustainable Banks

On the subject of banks, I thought to share this article with you as I know many of you are interested in banking with a bank or banks that prioritize social responsibility, ESG, and sustainability issues. The article is titled Top 10: Sustainable Banks. It’s by Charlie King and seen at sustainabilitymag.com. Now some brief quotes by Mr. King on his picks.

“10. Nykredit

Headquarters: Copenhagen, Denmark

Founded in 1851 and based in Copenhagen, Nykredit is a customer-owned bank and Denmark’s biggest lender with 35% market share. With ESG at the heart of its operations… Nykredit has made a special commitment to offer financial solutions in urban and rural districts alike at all times.

On the environmental side, Nykredit was the first Danish systemically important financial institution (SIFI) to join the Science Based Targets initiative (SBTi), and announced tighter restrictions on financing gas and oil companies in 2023.

9. UOB (U11.SI)

Headquarters: Singapore

“It is our responsibility to build a sustainable future for generations to come,” says Wee Ee Cheong, CEO.

8. SpareBank 1 (B4M1.F)

Headquarters: Oslo, Norway

A collection of Norwegian banks, SpareBank 1 prides itself on its strong local ties. The alliance is built on the foundation of being local, committed and responsible social actors.

“Climate change is increasingly affecting our world and making our future uncertain,” says Benedicte, CEO.

7. Banco Pichincha (BVL:BPICHC1)

Headquarters: Quito, Ecuador

South American company Banco Pichincha not only serves six countries in Latin America, but also works to preserve the country's heritage and promote art and culture.

6. The City Bank Limited (DSE:CITYBANK)

Headquarters: Dhaka, Bangladesh

Founded in 1983, City Bank serves more than 1.7 million customers. Governance and compliance is at the heart of City Bank’s sustainability strategy, as it works to reduce risk for itself and its stakeholders.

In 2022, City Bank joined the UN’s Net-Zero Banking Alliance (NZBA) and has since been recognised for its sustainability by Bangladesh Bank, German Agency for International Cooperation (GIZ) and Global Finance for its sustainability.

5. TSKB (XIST: TSKB.E)

Headquarters: Istanbul, Turkey

Investment banking specialist Turkiye Sinai Kalkinma Bankasi (TSKB), or Turkey Industrial Development Bank, uses a sustainable banking model to provide a qualified contribution to climate and environmentally friendly investments, equal opportunities in employment and inclusive economic growth.

4. Amalgamated Bank (AMAL)

Headquarters: New York, US

Self-defined as ‘the bank for change-makers’, Amalgamated Bank is committed to environmental and social responsibility and uses its funds to support sustainable organisations, progressive causes and social responsibility.

3. Triodos Bank

It prides itself on publishing details of every organisation it finances on its website, so customers can see how their money is delivering positive change for people and the planet.

In 2023, its €23.2bn (US$25.2bn) in assets were used to create social, environmental and cultural value in a transparent and sustainable way.

2. ProCredit Holding (ETR: PCZ)

Headquarters: Frankfurt, Germany

ProCredit Holding is part of ProCredit, an international group of development-oriented commercial banks dedicated to its ethical corporate mission. Aiming to drive forward the creation of transparent, inclusive financial sectors in developing countries and transition economies, ProCredit supports SMEs and has a strong focus on human ethics.

1. Vancity

Headquarters: Vancouver, Canada

Founded in 1946, Vancity is a Canadian financial co-operative that uses financial tools to stimulate social and environmental progress. Having achieved carbon neutrality in 2008, a first for a North American-based financial institution, it is now working towards net zero by 2040 – a slight sooner than many others.”

End quotes.

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Honorable Mentions that time didn’t allow me to cover here

Title: Biodiversity Funds: Top Biodiversity Funds to Consider on sustainabletreasure.com. By sustainabletreasure.

From Canada

Title: Seven U.S. renewable energy stocks well-positioned to benefit from future rate cuts on theglobeandmail.com. Requires login though does show stock symbols of 3 of the 7 companies. By Christine Elegado.

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Ending Comment

Well, these are my top news stories with their stock and fund tips -- for this podcast titled: “Renewable Energy and Sustainable Bank Stock Buys.”

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I’ll talk to you next on June 28th.

Bye for now.

© 2024 Ron Robins, Investing for the Soul