3 Solar Stocks to Buy Now: May 2024

Industry Overview - The global shift towards environmentally friendly solutions is driving demand for solar energy, with the U.S. having approximately 3.9 million photovoltaic solar power systems by the end of 2022, reflecting a remarkable 37% year-over-year growth [1] - Solar energy is projected to remain the fastest-growing renewable energy source in the U.S. due to favorable tax credits and political support, with expectations for continued expansion in the coming years [2] Company Analysis: First Solar (FSLR) - First Solar is a leading solar manufacturing company and the largest photovoltaic solar energy provider globally, with stock price estimates ranging from $157.56 to $356.00 over the next year [5] - The company's growth is significantly driven by expansion plans supported by tax benefits from the Inflation Reduction Act, including a $1.1 billion investment in a new factory set to begin production in 2026 [6] - Management anticipates that tax benefits will enhance company margins by nearly 30%, and with a P/E ratio of 20.71, which is 10% below the sector median, First Solar presents a compelling investment opportunity [7] Company Analysis: Sunrun (RUN) - Sunrun is recognized for its direct-to-consumer marketing and solar design and installation services, despite experiencing a nearly 20% stock drop over the past year, with price targets ranging from $7.78 to $42 [11] - The company's storage segment is emerging as a growth area, with a 50% increase in new storage installations and the introduction of new grid service programs [12] - Sunrun's focus on a margin-driven growth strategy positions it for increased earnings, with a target of $500 million by Q4, and its P/B ratio is nearly 75% lower than its 5-year historical values, indicating a potential high-growth investment [13] Company Analysis: Brookfield Renewable (BEP) - Brookfield Renewable Partners is a major investor in renewable assets, including solar, with over 211 solar facilities and a capacity of over 7000 MW, with stock price estimates between $20 and $32 [15] - The company offers a diversified and lower-risk investment option in the renewable energy sector, with expected total returns of around 12%-15% due to durable cash flows [16] - Brookfield maintains a dividend yield of nearly 5%, higher than the industry median of around 4%, and its P/B ratio is slightly discounted compared to its 5-year historical averages, making it an attractive investment opportunity [17]