eToro Renewable Energy Smart Portfolio
eToro Renewable Energy Smart Portfolio Review
How to Invest in Renewable Energy? (eToro Renewable Energy Smart Portfolio)
The world economy is rapidly changing its energy sources. As a result of concerns about climate change, the globe is shifting away from carbon-based fossil fuels and toward cleaner alternative energy sources. Over the next three decades, decarbonization of the global economy will require an estimated expenditure of more than $100 trillion. In this energy revolution, renewable energy will be critical.
As a result, eToro has developed a Renewable Energy smart portfolio to allow investors to participate in the industry's growth.
What are the benefits of investing in the eToro Renewable Energy Smart Portfolio?
Renewable energy sources such as wind, solar, and hydropower now account for around a quarter of all electricity generated in the power industry. The industry has been rapidly expanding, with yearly increases in energy-generating capacity of around 8% over the last decade. However, in recent years, the pace has accelerated due to growing climate change concerns. It has to pick up speed to assist the economy to decarbonize.
Climate change is prompting businesses and other institutions to consider how they might contribute to the decarbonization effort. Many businesses are entering into power purchase agreements (PPAs) with electric utilities and other electricity generators to purchase renewable energy.
Others, on the other hand, are directly investing in renewable energy development projects. While many people are doing this to become more socially responsible global citizens, renewable energy is becoming more affordable as the cost of solar panels, wind turbines, and energy storage batteries fall. As a result, the sector is becoming more appealing as an investment option.
How eToro select the stocks for the Renewable Energy Smart Portfolio?
Governments are also working to hasten global decarbonization by proposing and enacting legislation to boost investment in the area. The US Senate enacted a $1.2 trillion infrastructure bill in August 2021, which included cash to speed up clean energy development. Many see it as merely a first step toward the necessary spending to decarbonize the economy, implying that future legislation might enhance the country's investment level much further.
Solar energy, wind energy, garbage, recycling, electrical infrastructure, battery charging, and clean transportation are all covered under eToro's Renewable Energy Smart Portfolio.
Businesses that provide power through clean energy plants, as well as companies that develop and sell technologies for the industry, such as inverters for solar panels, wind turbines, and hydrogen filling stations, are included in the portfolio.
The following is the procedure for picking assets for the portfolio: First, companies that suit the Renewable Energy landscape are examined through the universe of stocks available on eToro. After that, each stock is screened using a set of criteria, including market capitalization, share liquidity, financial statistics, and analyst consensus ratings. The measures are used to rank the equities, and the top-ranked stocks are then included in the portfolio and weighted appropriately.
eToro Renewable Energy Smart Portfolio Stocks
Gevo Stock
Gevo is a next-generation "low-carbon" fuel firm dedicated to the research and development of renewable alternatives to petroleum-based goods.
Gevo is focused on the creation and manufacture of mainstream fuels such as gasoline and jet fuel from renewable feedstocks that have the potential to reduce greenhouse gas emissions on a large scale while also improving agricultural productivity, such as food and other related items.
Gevo's technology can also serve markets for the manufacturing of chemical intermediate products for solvents, polymers, and building block chemicals, in addition to low-carbon fuel applications.
NextEra Energy Stock
NextEra Energy is the largest wind and solar energy producer in the world. It generates this energy through its Florida utilities and its energy resources sector, which sells power to other utilities and end consumers under PPAs.
NextEra has a long history of increasing shareholder value. Over the last decade, it has generated a total return of almost 700 percent. Above-average growth has fueled the energy company's high results. Since 2005, NextEra's adjusted profits per share have increased at a compound annual rate of 8.7%, while its dividend has increased at a 9.6% annual rate.
With sustained investments in renewable energy, the company expects annual earnings growth of 6% to 8% through at least 2023.
First Solar Stock
Thin-film solar panels are developed and manufactured by First Solar. This type of panel provides more useful energy than competing technologies because it is larger. It's therefore perfect for large-scale solar energy installations.
Since its initial public offering, the solar panel manufacturer has generated a cumulative annualized return of around 9.5 percent for its stockholders. As one of the world's leading solar panel manufacturers, the company is well-positioned to increase shareholder value as solar panel demand grows.
By 2025, capacity will have doubled from its current level in 2020. First Solar also has one of the greatest balance sheets in the industry. In 2021, it had nearly $1.5 billion in net cash, providing it plenty of financial room to expand.
Clearway Energy Stock
Clearway Energy is one of the major renewable energy owners in the United States. Its wind and solar energy portfolio is complemented by highly efficient natural gas power plants and district energy assets. Clearway also sells its power through PPAs, which provide consistent financial flow.
Clearway has done an excellent job of building shareholder value over the years, with yearly total returns nearing 10% since its founding. It's worth noting that since private equity firm Global Infrastructure Partners gained control of the company in 2018, its overall annualized returns have more than doubled. It has a continual supply of investment opportunities thanks to this relationship. It plans to increase its dividend by 5% to 8% annually in the next years while maintaining a strong financial position.
SolarEdge Technologies Stock
SolarEdge Technologies creates and manufactures an inverter system that is optimized. This component helps to reduce the cost of electricity generated by the system by maximizing the power supplied by solar panels.
Throughout its history, SolarEdge has been a tremendous value creator. Since its IPO, the solar company has provided an annualized total return of over 50%. Its quick rise from 10th-largest supplier in 2014 to the market leader in solar inverter production in 2020 is fueling that growth.
It also has a strong balance sheet, with more than $500 million in net cash in 2021 to help fund its expansion.
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