2 Energy Stocks You Can Buy Right Now to Play the EV Boom

Canadian Solar (NASDAQ:CSIQ) stock is just one way to play the EV trend without buying EV stocks.

| More on:

“Energy stock” is a funny term. Normally, when you think of an energy stock, you think of an oil and gas company. That is what many industry classification guides deem to be an energy company. But the truth is, technology stocks, utilities, and even asset management companies can be “energy stocks” if they’re involved in transmitting energy.

That brings me to the point of this article.

The rise of electric vehicles (EVs) isn’t necessarily bad for energy stocks. Many people think that it is, but it isn’t. If you define “energy” broadly to include solar, wind, and nuclear power, EVs might even help out the energy industry. In this article, I will explore two renewable energy stocks that profit from the EV trend instead of being hurt by it.

Canadian Solar

Canadian Solar (NASDAQ:CSIQ) is a Canadian renewable energy company that manufactures and sells solar panels. This isn’t just some small company helping people buy panels to put on their roof: it sells solar panels to utility companies, large offices buildings, and more. To be sure, CSIQ does sell solar panels to homeowners, but it’s so much more than the dime a dozen solar startups you’ve probably heard about. It’s a medium-sized company worth US$2 billion that has relationships with big companies.

The solar industry benefits from the rise of EVs in many ways. First, solar panels are used to generate electricity, which is what EVs run on. Second, solar is a unique form of energy in that some people generate it themselves at home, and EV owners are more likely than average to be in that group. A study showed that 38% of North American EV owners also owned solar panels, and a further 10% planned on getting some soon. These figures are much higher than the population averages. So, the more people buy EVs, the more potential customers there are for CSIQ.

How is Canadian Solar doing as a business? Pretty good. In its most recent quarter, it did $2.31 billion in revenue, up 31% year over year, and $74.4 million in earnings, up 560% year over year. That’s terrific growth. And if governments keep incentivizing their citizens to go green, then you can bet CSIQ will keep it up.

Brookfield Renewable Partners

Brookfield Renewable Partners (TSX:BEP.UN) is a Canadian fund of green energy investments. It owns a diversified portfolio of assets that you can buy on the stock market, just like an exchange-traded fund or a real estate investment trust.

BEP.UN owns a variety of “green energy” assets, the kinds that EV users to power up their cars. Examples include hydro power facilities, wind farms, and solar utilities. These are all “clean” energy sources that governments look kindly upon, which may give BEP an edge in an era of increasing climate change regulations.

How is BEP doing as a business? From the looks of it, pretty well. In its most recent quarter, BEP.UN reported $294 million in funds from operations, up 10%, and $1.27 billion in revenue, up 25%. That’s pretty strong growth, and Brookfield Renewable Partners is likely to get friendly treatment from the government going forward, as Canada has made climate change a priority. So, there is some tentative reason to believe that BEP.UN’s strong results will continue.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

Piggy bank with word TFSA for tax-free savings accounts.
Stock Market

3 Canadian Stocks to Consider Adding to Your TFSA in 2025

Here's why Canadian investors can consider holding quality growth stocks such as Magellan Aerospace and Sylogist in a TFSA.

Read more »

clock time
Investing

It’s Time to Buy: 1 Canadian Stock That Hasn’t Been This Cheap in Years

Alimentation Couche-Tard (TSX:ATD) is a great Canadian stock that's close to the cheapest it's been in a while.

Read more »

Investing

Missing Out Is Costly: Why the Smartest Investors Keep Buying Canadian Stocks

Here's why you should continue to include a decent allocation to domestic equities.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, February 12

TSX investors will keep a close watch on the U.S. inflation report and corporate earnings as today’s trading session unfolds.

Read more »

Canadian flag
Dividend Stocks

1 Magnificent Canadian Dividend Stock Down 8% to Hold for Decades

Do you want some dividends with those returns? Then buy this stock while it's down.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Suncor Energy: Buy, Sell, or Hold in 2025?

Let's dive into the risks and catalysts underpinning Suncor Energy (TSX:SU) right now and see if this stock is worth…

Read more »

A plant grows from coins.
Stocks for Beginners

Rebalancing Your Portfolio for 2025? 3 Growth Stocks to Consider

There's no shortage of great growth stocks to consider for your portfolio. Here's a look at three that could provide…

Read more »

calculate and analyze stock
Dividend Stocks

2 Stocks That Cut You a Cheque Each Month

These two top Canadian monthly dividend stocks could help you generate reliable passive income for years to come.

Read more »