Forget everything you know about environmental stocks. You don't need high-risk investments, and you certainly don't need to lose all your money. Utilities are the backbone of the American energy system, and their go-getter attitudes are what are really going to turn our country clean and green. Here are three of the best environmental stocks for your powerful profit-pulling portfolio.
1. NextEra Energy Inc
For seasoned environmental stock investors, NextEra Energy Inc (NYSE:NEE) is no newcomer. If you're into wind, this utility will blow you away.
NextEra Energy Inc boasts more than 100 wind farms across 19 states and Canada, capable of producing 10,200 MW of green electricity. As one of the world's largest wind generators, this renewable energy accounts for a whopping 56% of the utility's total competitive generation.
NextEra Energy Inc fills an important environmental stock niche. Pure renewable plays are often too small to influence America's larger energy system. Utilities usually add on renewables as a sexy side project. But as one of the largest regulated electric utilities in the country, with nearly 5 million customers, NextEra Energy has taken the renewables leap, and it will inherently play a pivotal and powerful role in the future of clean energy.
2. NRG Energy Inc
Like many utilities today, NRG Energy Inc (NYSE:NRG) is far from green. But this company's progressive outlook is helping it embrace an environmental tomorrow faster than nearly all of its peers.
The company's current generation capacity clocks in at 60% coal, 30% from other fossil fuels, and 10% from renewables. Although some competitors like NextEra beat NRG Energy Inc on clean capacity, this utility is rapidly rearranging the way we approach environmental energy solutions.
On the solar generation front, this environmental stock lays claim to the world's largest photovoltaic project: a 290 MW facility outside Phoenix, Arizona. If you watched the Super Bowl this year, then you witnessed a part of NRG's major push into commercial solar, as well. NRG's 1,350 solar panels atop New York's MetLife Stadium power the entire ring of multi-colored lights around its roof.
Alongside Google (NASDAQ:GOOG) and other investors, NRG Energy Inc also runs the largest solar thermal project in the world, a massive, 400 MW plant in the California desert.
In a Bloomberg interview this week, CEO David Crane said he believes "clean energy becomes the dominant energy over the next 30 or 40 years. It almost has to, because of what the scientists are telling us about climate change. By 2050, our energy system needs to be largely not putting greenhouse gases into the atmosphere."
The company is setting up electric vehicle infrastructure, exploring carbon capture opportunities, and directly connecting consumers to renewable energy purchase opportunities. It's these sorts of embedded innovations that make NRG Energy Inc one of the best environmental stocks around.
3. Dominion Resources
Dominion Resources (NYSE:D) isn't your average environmental stock. When investors frame their Dominon "buy" thesis, it's usually a natural gas, LNG, pipeline, and/or regulated power play.
But for visionary first movers, Dominion may end up being the most environmental stock America has ever seen. The reason: offshore wind.
While the company will continue to push ahead with a variety of clean and dirty projects, its offshore wind investments may revolutionize America's energy system. Offshore wind capacity clocks in at an astonishing 4,150,000 MW -- around four times the total capacity of our country.
Dominion has been quietly making offshore wind headway that is setting this environmental stock up for success. It's been buying up long-term leases for dirt-cheap prices (112,000 offshore Virginia acres for $1.6 million) and has received both financial awards and technical support from the U.S. Department of Energy to help it find its sea legs.
The utility is in the process of piloting two 6 MW wind turbines, and there are increasingly tempting opportunities for scale-up. Improved energy storage opportunities, stronger transmission networks, and dropping generation costs could all set Dominion Resources up to be the best environmental stock ever.
Go green to make green?
These environmental stocks aren't your typical high-risk small-cap solar options. Instead, they're fully fledged major corporations with a finger on the future of America's energy system. With smart regulation, consumer demand, and a supportive technology push, these companies could turn America greener than it's ever been before.
Justin Loiseau owns shares of Google (C shares). The Motley Fool recommends Dominion Resources and Google (C shares). The Motley Fool owns shares of Google (C shares) and NRG Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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