Energy investing is an extremely changeable landscape at the moment. The times are certainly changing, with everything from oil headwinds to green energy rearranging stock portfolios. The green power sector could take over and go mainstream in the long term.
Two disrupting technologies are also waiting in the sidelines for their breakthrough moment. The oil price crash could be the signal that their time has come.
A top energy stock to buy and hold
When it comes to growth potential in the green economy, Brookfield Renewable Partners is one of the first names to look at. The Brookfield name brings top-tier asset management experience, while renewables are a massive growth trend.
Brookfield Renewable Partners is an especially strong play in this field. It offers a 4.7% dividend yield, exceptional growth prospects, and a wide-moat business model. Its operations span hydroelectric, wind, and solar energy, and cover North and South America as well as Europe.
GFL Environmental is a play for the green economy rather than the energy sector. However, this exciting new IPO offers some rare momentum in an adjacent sector. GFL is active in waste management, soil remediation, and infrastructure. The stock has already proven resilient amid the extreme volatility of the markets.
Industry disruption equals upside potential
Hydrogen extraction could see oil fields get a new use in the new decade. A new mode of draining the oil patch could even be the lifeline for some struggling oil producers. An environmentally friendly source of clean fuel could reverse the fortunes of Western oil producers if a new technique can be scaled up.
Proton Technologies is working on drawing hydrogen from oil fields while leaving the carbon in the ground. This would be a groundbreaking step forward for energy production if the technique can be utilized at scale. Such sites could also be self-powered using some of their own hydrogen. Hydrogen is a clean fuel source that has the potential to capture an increasing market share this decade.
Meanwhile, a company called Heliogen is pioneering a new solar power technique. The process has caught the attention of Bill Gates. The business also just picked up 2020 World Changing Ideas award selection by Fast Company. Heliogen’s technique harnesses AI-powered mirrors to optimize solar energy production in a way that could revolutionize the industry. An IPO could even be forthcoming.
“As Heliogen pursues our vision of decarbonizing industry across the world, our team has achieved a scientific and technical breakthrough,” Heliogen CEO Bill Gross said in a press release this week. “Heliogen’s technology will dramatically slash carbon emissions and reduce costs for the companies whose businesses depend on running these processes — taking a major step toward solving climate change.”
The bottom line
The oil price crash last week was a wake-up call to investors. But there are alternatives to hydrocarbons out there. From hydrogen conversion to solar, the task of decarbonizing could bring upside to long-term stock portfolios. In the meantime, green economy-focused plays abound, such as Brookfield renewable Partners and newcomer GFL.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.