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Five of the Best Wind Energy Stocks
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Wind energy has suddenly become hot.
Oilman T. Boone Pickens plans a massive wind farm in Texas, costing $10 billion to $12 billion, to be completed by 2014, and capable of supplying power to more than 1.3 million homes.
Barack Obama, if elected president, has pledged to Invest $150 billion over 10 years in clean energy and require that 25 per cent of electricity be from renewable sources by 2025.
The US has become the world's fastest-growing wind energy market, and is expected to remain so. In 2007, the US installed 5,249 MW of new capacity, more than a quarter of the global total. Wind projects accounted for more than a third of all new power generating capacity added in the US in 2007.
So which are the hot stocks?
Unfortunately, they are few, for several reasons:
- American companies have been late in discovering wind energy. Most of the leading companies - and stocks - are European.
- And now Asian companies are moving rapidly into this business.
- The biggest American wind power company is General Electric. Wind power is a fast-growing part of its business, but still far too small to make General Electric, realistically, a wind power stock.
Fortunately, some of the overseas stocks are listed on US exchanges. And America does boast a few excellent wind power companies. Here are five of the best:
* Vestas (VWDRY), a Danish company, is the world leader in wind turbines, and its shares are among the top holdings of numerous green energy funds around the world. After General Electric it is the leading supplier of wind turbines to the booming US market. Its June 2008 second-quarter profits rose 27 per cent and its order backlog leapt 67 per cent.
* FPL Group (FPL) is a giant Florida-based power utility, and the US leader in wind energy generation. Like many utilities, its shares have been hit by credit concerns.
* Gamesa (GCTAF) of Spain is another leading wind turbine supplier, with extensive activities around the world, including in the US. Its 2008 first-half earnings jumped 69 per cent.
* Composite Technology (CPTC), based in California, produces the DeWind series of wind energy turbines. It also makes electricity transmission equipment. It is seeing particularly high growth in demand for its turbines from Europe and China, although this business remains in the red.
* Trinity Industries (TRN), a Texas company, makes towers for the wind power industry, and also operates a trucking company that provides logistical support and transportation services to the industry. It is, in addition, America's largest manufacturer of railway freight cars. Though its energy-related business is less than 20 per cent of total turnover, it is by far the fastest-growing part of the company's operations.
September 26th, 2008
* Thank you to the The Skilled Investor for including this post in the Carnival of Financial Planning.
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