Please ensure Javascript is enabled for purposes of website accessibility

Here's Why NRG Energy Lept 21% in March

By Maxx Chatsko - Apr 10, 2016 at 12:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

NRG Energy had a great run last month. Here's what you need to know.

NRG Chart

NRG data by YCharts

What: Shares of renewable energy-focused power company NRG Energy (NRG 2.27%) rocketed 21% in March on increased investor optimism from 2015 earnings results, 2016 guidance, and the announcement of two new projects, including a major solar partnership with Whole Foods Market.

So what: March started off on the right foot when NRG Energy announced full-year 2015 financial results on the last day of February. The company notched record full-year adjusted EBITDA of $3.3 billion and accelerated its debt reduction efforts. The latter will result in a slightly reduced quarterly dividend, from $0.14 per share to $0.12 per share. Investors still enjoyed the progress, which gives confidence that NRG Energy remains on solid footing for the future.

Meanwhile, NRG Energy and Whole Foods Market announced plans for a commercial solar portfolio that will install rooftop solar at up to 84 grocery stores and distribution centers in nine states. The installations will be able to generate up to 13.8 MW of solar power and help to lower Whole Foods Market's carbon footprint. To put that into perspective, SolarCity and Wal-Mart have installed over 65 MW of rooftop solar on stores since 2010, which hints that NRG Energy and Whole Foods Market could enjoy a fruitful long-term partnership.

Now what: Investors have stomached plenty of volatilty in recent years. After peaking at over $37 per share in mid-2014, shares of NRG Energy collapsed all the way to $9 in late 2015 after its longtime CEO stepped down. While challenges remain for the company, I think there's a solid case to be made for this being a value play for long-term investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$123.37 (-0.61%) $0.76
Whole Foods Market, Inc. Stock Quote
Whole Foods Market, Inc.
WFM
NRG Energy, Inc. Stock Quote
NRG Energy, Inc.
NRG
$46.85 (2.27%) $1.04
SolarCity Corporation Stock Quote
SolarCity Corporation
SCTY.DL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.