The wind energy industry is comprised of both a small number of pure-play companies and also big corporations that operate their wind energy business as a division or a subsidiary. One example of the latter is General Electric Co.’s (GE) Renewable Energy division. The wind industry has potential for significant growth, with the Global Wind Energy Council forecasting that offshore wind sources will increase dramatically in the coming decades.
Wind stocks, represented by the First Trust Global Wind Energy ETF (FAN), have dramatically outperformed the broader market. FAN has provided a total return of 53.0% over the past 12 months, well above the Russell 1000’s total return of 20.7%, as of December 1, 2020. All statistics in the tables below are also as of December 1.
Here are the top 3 wind stocks with the best value, fastest growth, and the most momentum.
Best Value Wind Stocks
These are the wind 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 Wind Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Northland Power Inc. (NPI.TO)||CA$45.13||CA$9.1||24.0|
|General Electric Co. (GE)||10.15||88.9||28.2|
|NextEra Energy Inc. (NEE)||74.15||145.3||37.4|
- Northland Power Inc.: Northland Power is a Canada-based diversified energy company with assets in wind, natural gas, and solar. For Q3 2020, Northland Power reported a 24.4% year-over-year (YOY) increase in sales and a 1.5% YOY decline in net income. Although the COVID-19 pandemic continued to suppress renewable power demand, Northland closed the acquisition of three onshore wind development projects in New York State during the quarter.
- General Electric Co.: General Electric is a global diversified technology and financial services company. GE provides power generation, household appliances, aircraft engines, water processing, financing, and industrial products.
- NextEra Energy Inc.: NextEra is an electric power and energy infrastructure company that generates electricity through wind, solar, and natural gas. Through its subsidiaries, the company also operates multiple commercial nuclear power units. In November, the company announced agreements to sell interests in a long-term contracted renewables portfolio for approximately $1.3 billion to investors including KKR & Co. Inc. (KKR).
Wind Stocks With the Most Profit Growth or Least Profit Decline
These are the wind stocks with the highest YOY earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Wind Stocks With the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|NextEra Energy Inc. (NEE)||74.15||145.3||38.1|
|Vestas Wind Systems A/S (VWDRY)||67.55||39.7||-0.3|
|Northland Power Inc. (NPI.TO)||CA$45.13||CA$9.1||-2.4|
- NextEra Energy Inc.: See above for company description.
- Vestas Wind Systems A/S: Vestas Wind Systems is a Denmark-based wind energy company that designs, manufactures, and installs wind turbines used to generate electricity. In November, Vestas announced a strengthened partnership with Mitsubishi Heavy Industries Ltd. through which Vestas will acquire Mitsubishi’s shares in the MHI Vestas Offshore Wind joint venture. As part of the transaction, which is subject to regulatory approval, Mitsubishi will acquire a 2.5% stake in Vestas and will be nominated to a seat on Vestas’ Board of Directors.
- Northland Power Inc.: See above for company description.
Wind Stocks with the Most Momentum
These are the wind stocks that had the highest total return over the last 12 months.
|Wind Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|TPI Composites Inc. (TPIC)||43.89||1.6||143.2|
|American Superconductor Corp. (AMSC)||18.70||0.5||124.0|
|Vestas Wind Systems A/S (VWDRY)||67.55||39.7||116.6|
|First Trust Global Wind Energy ETF (FAN)||N/A||N/A||53.0|
- TPI Composites Inc.: TPI Composites is a maker of composite wind blades for use in wind energy applications. The company also provides composite vehicle structures to customers worldwide. For Q3 2020, TPI reported a 23.5% YOY increase in net sales and net income of $42.4 million after a net loss of $4.6 million in Q3 2019. The company said the performance was driven by increased production, high utilization, and a strong demand environment.
- American Superconductor Corp.: American Superconductor is a renewable energy company offering electric control systems, power converters, voltage solutions, generators, and similar products.
- Vestas Wind Systems A/S: See above for company description.