The global movement against climate change has sparked a remarkable surge in investor interest in green energy stocks. Companies operating in the renewable energy sector, such as wind, solar, hydrogen, electric vehicles (EVs), and energy storage, are attracting significant attention. These companies not only promise financial returns but also offer the opportunity to contribute to a greener future.
ESG investments
Environmental, social, and governance (ESG) investments represent a growing trend in the financial world, emphasizing the importance of sustainable and responsible business practices. These investments consider not only financial returns but also the broader impact of companies on society and the environment.
- Environmental criteria evaluate a company’s efforts to minimize its ecological footprint and address climate change;
- Social criteria assess how a company manages relationships with its employees, suppliers, customers, and communities, focusing on diversity, labor practices, and human rights;
- Governance criteria examine a company’s leadership, transparency, and accountability.
ESG investments aim to generate positive societal and environmental outcomes while delivering competitive financial returns, making them increasingly attractive to investors seeking to align their portfolios with their values.
Tesla’s influence and beyond
Tesla (NASDAQ: TSLA) has played a pivotal role in driving this interest. Over the past decade, Tesla has significantly outperformed the S&P 500, becoming a beacon for investors seeking exposure to the green energy sector.
Now, a new wave of investors is eager to align their investments with sustainability goals. However, it’s crucial to recognize that companies in this sector often experience cyclical fluctuations. It’s, therefore, advisable to invest only what you can afford to potentially lose.
Linde PLC (NASDAQ: LIN)
A standout green energy stock for 2024 is Linde PLC (NASDAQ: LIN). Linde holds the distinction of being the world’s largest industrial gas company and a key player in the chemical industry. The company caters to a diverse range of sectors, including healthcare, food & beverage, electronics, and aerospace.
Linde’s core business revolves around the production and distribution of various gases essential for high-tech applications. These gases include oxygen, nitrogen, hydrogen, and helium, among others. However, what sets Linde apart is its significant market share in the hydrogen infrastructure segment.
Financial performance overview
| Metric | FY23 | FY24 |
| Revenue (in billions) | $32.9 | – |
| EPS | $14.20 | $15.25—$15.65 |
| Projected growth | – | 8%—11% |
Linde PLC stock price today
Pioneering clean energy investments
Linde has committed to investing between $7 to $9 billion in clean energy initiatives, including the conversion of 11 to 13 assets into clean hydrogen facilities. Despite a slight slowdown in top-line growth in FY23, the company experienced substantial profit growth. Operating profit surged to $8 billion, with earnings per share (EPS) rising by 16% to $12.59 per share.
With a project backlog amounting to $8.5 billion and support from initiatives like the Inflation Reduction Act (IRA), Linde is well-positioned for further growth. Management has set the stage for double-digit EPS growth in FY24, making Linde a compelling prospect for investors.
The bottom line
As the world intensifies its efforts to combat climate change, green energy stocks are poised for sustained growth. Companies like Linde PLC exemplify the potential for both financial returns and environmental impact.
While the journey towards a greener future may encounter bumps along the way, investors who align their portfolios with sustainability goals stand to benefit in the long run. With prudent investment strategies and a commitment to the cause, green energy stocks represent a golden opportunity for investors seeking both profit and purpose.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
