Get ready for clean energy stocks if Biden wins Get ready for clean energy stocks if Biden wins Get ready for clean energy stocks if Biden wins

Get ready for clean energy stocks if Biden wins

Equities 6 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  Since our big research note on green stocks calling it a mega trend in equities the theme has been bid up by investors. Despite elevated valuations we remain positive on the long-term prospects for green stocks and believe every long-term investor should have exposure to this theme. Political capital will only increase over time and stimulate the economy in the direction of a green transition away for high carbon intensity. Biden's big clean energy plan announced this week underscores this trend and in this research note we present 28 stocks with exposure to clean energy.


According to PredictIt Joe Biden has a 15%-points lead over Donald Trump for winning the US 2020 Election in November a margin that came about as the public opinion of the current administration soured over the handling of COVID-19. But more importantly for a potential Biden administration is the fact that PredictIt also has a 58% probability that the Democratic Party will take the Senate and thus make a clean sweep during the election. In that event the US is likely headed into four years of drastic policy reforms.

One of the pillars in a Biden administration is climate policy which has been neglected by the Trump administration pulling the US out of the 2016 Paris Agreement and rolling back many of the environmental laws (Recovery Act) from the Obama years. As part of the 2020 Democratic National Convention Biden has introduced a climate policy called Clean Energy Revolution looking to spend $1.7trn in federal spending over 10 years on top of commitments from local states and the private sector. Part of the plan is to ensure the US achieves a 100% clean energy economy and net-zero emissions no later than 2050. For utilities, the goal will be 2035.

In the case of a clean sweep by the Democrats it will mean big changes to some US sectors. The oil and gas industry will lose out and financials will most likely see it difficult to ease regulation. The corporate tax cut by Trump in 2017 would most likely also be rolled back. The clear winners would be any company or industry that offers solutions to progress the US towards a 100% clean energy economy. That would mean a boost to electric vehicles manufacturers, solar, wind, waste management and recycling, water efficiency solutions, etc.

Back in early January we wrote the research note Green stocks are the next mega trend in equities which has proven so far to correctly assess the positive sentiment in green stocks. The basket of stocks mentioned in the research note is up 44% year-to-date and up 230% since January 2015 easily outperforming the global equity market.

We remain long-term positive on the ‘green transition´ as the coming years will show that the COVID-19 crisis is insignificant relative to the long-term impact from climate change. Political capital will be mobilized and the carbon economy will be fought against like the tobacco industry. Oil and gas are still important and will play a crucial role to bridge society to a cleaner energy future and our view is that oil prices will likely rise significantly from current levels as excess inventories are brought down. Investors with a long-term investment horizon should consider having exposure to clean energy stocks and the table below shows 28 stocks sorted on market capitalization from the S&P Global Clean Energy Index comprising of a mix of clean energy producers and clean energy technology and equipment providers.

NameIndustryMarket cap (USD, mn.)Revenue (USD, mn.)% YTD% 5yr
Vestas Wind Systems A/SWind Energy Equipment29,50615,56038.7159.6
Siemens Gamesa Renewable Energy SAWind Energy Equipment18,94210,57045.695.2
Verbund AGPower Generation18,3444,1730.2264.2
SolarEdge Technologies IncSolar Energy Equipment10,9771,592132.1779.7
Enphase Energy IncSolar Energy Equipment9,471721188.91418.9
Xinyi Solar Holdings LtdSolar Energy Equipment9,3241,24764.0301.5
Meridian Energy LtdRenewable Energy Generation7,9912,360-1.2208.2
First Solar IncSolar Energy Equipment7,8853,12135.551.9
Xinjiang Goldwind Science & Technology Co LtdWind Energy Equipment6,4225,484-18.1-19.2
Sunrun IncDevelopment & Construction5,704852248.6348.6
Plug Power IncFuel Cells & Industrial Batteries5,071257332.0523.3
Neoen SARenewable Energy Generation4,33328336.2N/A
Ormat Technologies IncRenewable Energy Generation3,145730-16.976.9
Atlantica Sustainable Infrastructure PLCOperations & Maintenance3,07597218.490.5
Cia Energetica de Minas GeraisElectricity Networks3,0435,551-37.97.9
Cia Paranaense de EnergiaElectricity Networks2,9713,969-34.753.5
Contact Energy LtdPower Generation2,9661,317-8.964.6
Innergex Renewable Energy IncRenewable Energy Generation2,96242435.8163.7
Scatec Solar ASADevelopment & Construction2,55226035.9306.9
Boralex IncRenewable Energy Generation2,41344736.7185.9
Encavis AGRenewable Energy Generation2,29031152.0102.7
Solaria Energia y Medio Ambiente SARenewable Energy Generation2,23941122.61772.5
SunPower CorpSolar Energy Equipment2,0261,88252.7-51.2
Falck Renewables SpARenewable Energy Generation1,86942515.7435.4
Canadian Solar IncSolar Energy Equipment1,5703,20120.331.6
Renewable Energy Group IncBiofuels1,4802,62339.8312.1
JinkoSolar Holding Co LtdSolar Energy Equipment1,0034,6540.45.4
GCL-Poly Energy Holdings LtdSolar Energy Equipment9272,78715.3-77.5
Source: Bloomberg and Saxo Group

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.