PODCAST: Buy These ESG Stocks, Say Analysts


Buy These ESG Stocks, Say Analysts Articles covered: “Which Renewable Energy Stocks to Buy Now? 3 Top Picks” by Tezcan Gecgil; “My 3 Best Stock Split Growth Stocks to Buy Now and Hold Forever” by Danny Vena; “iShares ESG Aware MSCI USA ETF: Key Themes” by Michael A. Gayed. Companies reviewed include: Blink Charging, Brookfield Renewable Partners, Clearway Energy, and Nvidia

PODCAST: Buy These ESG Stocks, Say Analysts

Transcript & Links, Episode 80, April 8, 2022

Hello, Ron Robins here. Welcome to podcast episode 80 published on April 8, 2022, titled “Buy These ESG Stocks, Say Analysts” — and presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.

Remember that you can find a full transcript, and links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.

Now, just a reminder. I do not evaluate any of the stocks or funds mentioned in this podcast. Furthermore, if you’re concerned about the ESG and sustainability ratings of any stock or fund included in this podcast, check your broker’s online site for such information.

If your broker doesn’t have this information, signup for free with Morningstar and you can gain access to company and fund ESG-sustainability ratings. Please note, that I receive no compensation from Morningstar or anyone else covered in these podcasts.

Also, if any terms are unfamiliar to you, simply Google them.

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1. Buy These ESG Stocks, Say Analysts

Now, the first article I want to talk about is titled Which Renewable Energy Stocks to Buy Now? 3 Top Picks by Tezcan Gecgil, an InvestorPlace Contributor. Here are some quotes by Mr. Gecgill on each of the three companies…

“1) Blink Charging (NASDAQ:BLNK)

Blink Charging operates electric vehicle (EV) charging equipment and networked EV charging services. It offers over 30,000 charging ports in more than a dozen countries.

Blink Charging released fourth-quarter 2021 results on March 10. Revenue increased 224% year-over-year (YOY) to a record $7.95 million. Net loss widened to $19 million, or 45 cents per share, compared to $7.9 million in the prior-year quarter. Cash and equivalents ended the period at $175 million.

Management attributes its impressive top-line growth to increasing brand recognition for its EV charging technology. Blink sold 3,733 charging stations during the quarter, representing a 253% YOY increase.

In addition, services revenue increased 471% YOY. Management continues to grow its charger network with new partners and overseas expansion as well.

As with most long-term growth stories, Blink is a volatile stock. It’s down almost 40% over the past year. Shares are trading at 54.7 times trailing sales. The 12-month median price forecast for Blink stock is $29.50.

2) Brookfield Renewable Partners (NYSE:BEP)

… operates one of the world’s largest pure-play renewable power platforms. Its portfolio consists of hydroelectric, wind and solar energy, plus storage facilities.

Brookfield released Q4 2021 results on Feb. 4. Revenue increased 15% YOY to $1.1 billion. Funds from operations (FFO) increased 6.5% YOY to $214 million, generating a record FFO per unit of 33 cents. Cash and equivalents ended the period at $764 million.

The company ended 2021 with an operational capacity of 21 gigawatts. In addition, it has an enormous development pipeline of 62 gigawatts. Hydroelectric power accounts for more than half of its revenue. Meanwhile, solar and wind power are expected see further growth in the coming years.

Brookfield Renewable Partners stock currently offers a generous 3.1% dividend yield. Management targets sustained 12% to 15% returns annually, as well as a yearly distribution growth of 5% to 9%.

This renewable energy stock is up nearly 14% so far in 2022. Shares are trading at 2.7 times trailing sales. Meanwhile, the 12-month median price forecast for (this) stock stands at $68.

3) Clearway Energy (NYSE:CWEN)

… operates renewable and conventional energy assets. The group generates revenue from sales to local utilities under long-term, fixed-price agreements.

Clearway released Q4 2021 results on Feb. 28. Net loss came in at $56 million, down from $73 million a year ago. Cash and equivalents ended the period at $654 million.

The alternative energy name has the opportunity to develop 19.1 gigawatts of renewable energy projects through 2025. Clearway invested $820 million to expand its portfolio last year. Meanwhile, management is selling the thermal business for $1.9 billion, resulting in cash proceeds of $1.3 billion.

Clearway stock currently generates an attractive 3.8% dividend yield, perfect for investors looking for passive income. Management targets annual dividend growth of 5% to 8% through 2026.

The alternative energy stock has returned 27% over the past year. Shares are trading at 38.3 times forward earnings and 3.4 times trailing sales. Finally, the 12-month median price forecast for Clearway stock is at $39.50.” End quotes.

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2. Buy These ESG Stocks, Say Analysts

The next article by Danny Vena is titled My 3 Best Stock Split Growth Stocks to Buy Now and Hold Forever. It’s found on fool.com. Here are Mr. Venna’s picks and edited comments on each one.

“1) Nvidia (NVDA)

After a 14-year hiatus and more than 2,000% stock price gains, Nvidia surprised investors on July 19, 2021, with a four-for-one stock split. Since then, even in the face of the recent market correction, shares of the semiconductor giant have still gained 49% since the split.

What’s driving those gains? Demand for the company’s graphics processing units (GPUs) used by gamers continues to increase, as Nvidia now controls 83% of the discrete desktop GPU market. Beyond gaming, Nvidia chips are the processor of choice in cloud computing and data center operations, which are accelerating as a result of the digital transformation. At its GTC Conference held just last week, the company added CPUs to its arsenal in a further push into data center servers.

Its strategy is bearing fruit. In the fourth quarter, Nvidia reported record revenue in three of its four major operating segments, resulting in revenue that grew 53% year over year. This was driven by gaming revenue that climbed 37%, data center revenue that surged 71%, and professional visualization revenue that soared 109%. 

The company is also well positioned to power the metaverse and the continuing quest toward self-driving cars with its state-of-the-art processors. Furthermore, Nvidia’s record revenue of $26.9 billion last year pales in comparison to the company’s total addressable market (TAM), which is expected to top out at a staggering $250 billion by 2023. 

2) Alphabet (GOOGL)

It’s been nearly eight years since Alphabet last split its shares, but the company broke that streak in early February when it revealed plans for a historic 20-for-1 stock split, scheduled to take place in July. Since its last split on March 27, 2014, Alphabet shares gained a whopping 410%.

Google’s search dominance has helped fuel those gains, with roughly 92% of the worldwide search engine market. This has helped cement the company’s market leadership in digital advertising, collecting an estimated 29% of worldwide digital ad spending. Then there’s Google Cloud, the third-largest provider of cloud services, with an estimated 9% of the market and growing more quickly than its top competitors. 

Alphabet’s triple threat has fueled impressive financial results. Q4 revenue climbed 32% year over year, while operating margins marched higher, pushing net income up 38%. That’s impressive growth for the fourth-largest company in the world, with a market cap of $1.87 trillion.

Its growth is far from over, fueled by strong secular trends. Digital ad spending is expected to climb to $873 billion by 2024, while estimates for the global cloud computing market clock in at $482 billion. Alphabet’s revenue of $257 billion last year still leaves plenty of room for future upside and additional market share gains.

3) Amazon (AMZN)

From little acorns grow mighty oaks, and from humble online bookstores, mighty e-commerce titans evolve. At least, that was the case with Amazon. And in terms of stock splits, the online retailer has gone the longest since its last pared its shares in the dot-com era, circa 1999. Since then, however, shares have skyrocketed 5,490%, leading to current plans for a 20-for-1 stock split.

Amazon is the undisputed leader in e-commerce. While estimates vary, the company controlled roughly 40% of online sales in the U.S. last year, with an industry-leading 8% of global digital retail in 2020. 

Furthermore, Amazon dominates the area of cloud computing, a space it pioneered. During Q4 2021, Amazon Web Services (AWS) boasted a 33% share of the cloud infrastructure services market, controlling more than No. 2 Microsoft (MSFT) and No. 3 Google Cloud combined.

I’d be remiss if I didn’t mention that Amazon has quickly become a force in the digital advertising market. While the company only began to break out its results in Q4, Amazon’s ads generated more than $31 billion in 2021, up 63%, and giving it the third-largest share of global digital ad spending, behind Alphabet and Meta Platforms (FB). 

This trifecta of businesses drove solid results for Amazon last year, with net sales that climbed 22% while net income climbed 57%. 

Yet, there are worlds left to conquer. Global e-commerce alone is worth $5.55 trillion, while cloud computing and digital advertising represent $482 billion and $873 billion, respectively. When viewed in the context of Amazon’s net sales of $470 billion last year, there’s a long runway for growth ahead.” End quotes.

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The iShares ESG Aware MSCI USA ETF: Key Themes

Now Michael A. Gayed, CFA has posted an article on seekingalpha.com focusing on one of the leading US ESG ETFs. The article’s titled iShares ESG Aware MSCI USA ETF: Key Themes. Here are some quotes of his from the article.

“Summary

  • iShares ESG Aware MSCI USA ETF is one of the most popular names in the ESG space and its AUM has grown at a rapid pace since its inception.
  • It could be one of the key beneficiaries of the expected $30 trillion worth of intergenerational inheritance transfer from baby boomers to the millennials.
  • (It’s) valuations are pricey and it is dominated by tech names where the outlook looks mixed.

The iShares ESG Aware MSCI USA ETF (NASDAQ:ESGU) is a $25bn sized product covering large and mid-cap US stocks with favorable ESG ratings. Companies involved in the business of tobacco, defense, and fossil fuels are excluded whilst companies involved in ‘very severe business controversies’ (as determined by MSCI) too are excluded…

Note that since its inception in late 2016, iShares ESG Aware MSCI USA ETF AUM has expanded by 3.5x the level of the SPY which tracks the broader market… and its popularity is reflected in its valuations which are still quite cheap.

Currently this ETF trades at 22 P/E and the income component too is fairly underwhelming at around 1.16%. Also, note that tech stocks dominate (its) portfolio accounting for 27% of the holdings; as noted in The Lead-Lag Report, this sector has seen a slight bounce off late on account of the Russian-Ukraine conflict and cyber attacks but it may struggle to deliver outsized gains as the Fed continues to pivot to a hawkish environment.” End quotes.

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Articles for the UK Investor

1) Title These are the best ESG brokers for sustainable investing in 2022, new research reveals – London Business News. By LLB Finance Reporter.

2) Title Five ethical ISA options to invest in this year – AltFi.com. By Liza Tetley.

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Ending Comment

Well, these are my top news stories with their stock and fund tips — for this podcast: “Buy These ESG Stocks, Say Analysts.”

To get all the links, stock symbols, or to read the transcript of this podcast — and more — go to investingforthesoul.com/podcasts and scroll down to this episode.

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Thank you for listening.

Talk to you next on April 22. Bye for now.

© 2022 Ron Robins, Investing for the Soul

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