We are living in a world that is rapidly changing. Being conscious of how we interact with the environment is not a choice but a necessity now. People are becoming increasingly aware of the implication of their actions on nature and looking for ways to protect it. This has led to a huge shift in our habits, for example – the use of eco-friendly goods, looking for environment-friendly alternatives, and more. People realize that to promote mindfulness, they need to support companies that do not harm the environment. Therefore, more and more investors are deciding to support environmentally aware companies. They wish to further their cause, which will ultimately benefit everyone, by investing in their stocks,
Companies across the board have understood that tomorrow will be too late as we are already facing the flashes of climate change. Progress cannot be at the planet’s cost, which is why companies throughout the globe are turning a greener leaf. If you wish to support their efforts and build a livable future for your loved ones and yourself, keep reading.
What Are Green Stocks and Why You Should Invest in Them?
Green stocks belong to the companies whose policies and activities are targeted towards benefiting the environment. These stocks are likely to focus on activities concentrated in pollution control, recycling, alternative energy, carbon abatement, and more.
These stocks are also called eco-friendly stocks, and they align with the interest of investors who believe in sustainable development. While there is a raising need for environment-friendly companies, their growth often does not spurt as they rely primarily on government subsidies and incentives. As the government’s support depends mostly on the country’s economic condition, there is no surety of stability.
There is a greater need for investment in greener stocks. This will allow these companies to expand. We have shortlisted the top eco-friendly stocks that you can invest in.
1. Enphase Energy Inc. (ENPH)
ENPH is a California-based company that produces solar micro-inverters. This green energy company produces energy-efficient inverters for both commercial and residential properties. The company has installed over 940,000 micro inverters worldwide, curbing billions of pounds of carbon dioxide. Its product has generated over four billion KW of energy without adding to the carbon level in the environment.
ENPH has been presented with several awards and accolades for its contribution towards promoting clean sources of energy. It includes the prestigious Solar Innovation Award that was presented to them in 2018 by Solar Solutions. The company has had the honor of being mentioned in many lists for its innovation. Enphase is a rapidly growing company that has shown only upward revisions.
It was named one of the Grids Edge Top 20 Most Innovative Companies in 2015 and made the Green Builder Hot 50 Products list in 2018. The company is growing, and earnings estimates have only received upward revisions, with expected earnings growth of 420% for the fiscal year of 2019. Investing in this company will be a smart move for your financial targets and the planet as well.
2. Weyerhaeuser (WY)
Weyerhaeuser is a trust for timber real estate investment. It is almost unacceptable to see a company on this list whose primary activity is to chop trees to procure construction lumber. What we need to understand here is that sustainable development does not mean abstinence from using natural resources. It means doing it judicially. This company believes in sustainable forestry. Weyerhaeuser has planted over a billion trees within a tenure of 10 years. It is committed to clean energy and responsible development.
It is also known to be transparent towards its stakeholders and promotes inclusion in the workforce. Weyerhaeuser was featured on the Ethisphere list as one of the most ethical companies globally and on other lists. The price to earnings ratio offered by the company is 28.28, and its dividend yields 4.57%.
3. Clean Harbors (CLH)
Clean Harbors is one company that takes social responsibilities very seriously. In addition to being ethical while performing its core operations, CLH is also known to clean up the mess created by other organizations. Complete hazardous waste management and emergency spill response are two of its main services.
CLH took the responsibility of heading the clean-up effort to deal with the oil spill in 2010 in the Gulf of Mexico and the mess created after the Deepwater Horizon explosion.
CLH was founded in 10980. It is a Massachusetts-based organization that operates throughout the states, Canada, Puerto Rico, and Mexico. Safety-Kleen is its subsidiary that is deemed as the largest recycler and re-refiner of used oil. It aims towards sustainable growth, and its programs revolve around health and safety, energy usage, and customer solutions. The revenue of this company has only tripled in the last.
4. Brookfield Renewable Partners (BEP)
BEP focuses on renewable, green, and clean energy resources. Every ounce of energy produced by this company comes from a clean source. 75% of the energy is generated using hydroelectric dams, 20% energy comes from wind power, and the remaining 5% is generated using solar power.
BEP invests in renewable energy across the globe. It owns 940 facilities for power generation, including hydroelectric facilities, worldwide. Brookfield goes the extra mile when it comes to taking social responsibility. It has many philanthropy projects running under its name. The company focuses on its employees’ well-being, ethical governance, and maintaining transparency across the board. BEP{ has a long-term growth plan. The plan is to build and buy more wind and solar farms to produce cleaner energy. Its growth has been consistent.
5. Bloom Energy (BE)
Bloom Energy is a San Jose-based firm that focuses on renewable energy. They offer sustainable and clean electricity to commercial organizations across the globe. Its product is Bloom Energy Servers, which are power generators. These generators run on fuel derived from biological sources like methane. Methane gas is a by-product of decomposed biowaste like vegetables. BE recycles this gas and converts it into an energy source that can be used in the industries. By using this energy, industries worldwide can reduce the overall carbon footprint.
Along with reducing carbon emission, there is less consumption of water as well. BE’s technology has considerably brought down air and water pollution.
The company was expected to have an earnings growth of 250% in the year 20202.
Advantages of Investing in Green Stocks
Investing in eco-friendly stocks is ideal in many ways. If you are not convinced yet, the following advantages will make you consider it:
1. Contribution to Eco-friendly Projects
Green stocks belong to the companies that aim towards directing a part of their capital towards renewable and clean energy, natural habitat restoration, and more. If you are an investor who is aware of the ongoing climate change and interacts with the environment that it doesn’t cause any harm, you should invest in green stocks.
2. Tax Exemption
In addition to the fact that your investment will create a positive impact, you will be happy to know that any income derived from green stocks is exempted from taxes. The government wants more people to invest in green stocks.
3. Low Borrowing Cost
The higher the demand, the lower the borrowing costs. When the borrowing cost is low, the company incurs less expenditure, and it can maximize profits. This increased income is ultimately shared with the investors as dividends, bonds, or ETFs exchange-traded funds.
Trading Sustainable Stocks
Most green stocks, including the ones we have mentioned above, are available online. You can trade them by opening an account with a broker. Look for a broker that offers individual stocks. You can even look for eco-friendly ETFs.
Frequently Asked Questions
Q1. Which stocks can be called green stocks?
Green chip stocks are the ones that belong to companies that work towards the betterment of the environment. Mostly stocks that belong to companies focusing on alternative energy sources, carbon abatement, recycling, and pollution control.
Q2. Are green chip stocks legal?
Yes, green chip stocks are legal.
Q3. Are green chip stocks profitable?
Green stocks are not like your conventional stocks. It can be difficult to make a profit, but with the right stocks, it is possible. Do your research before investing money. In addition to financial gains, the real gain is the sense of fulfilling your ethical duty towards the environment.
Q4. What are some of the top eco-friendly stocks available in the market?
There are many, and we have explained the most popular and profitable ones above.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
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