Interested in clean energy stocks? For ideas of how to get started, we ran a stock screen on the industry.
We screened a universe of clean energy stocks (companies that use or produce clean sources of energy) for those with the highest ratios of levered free cash flow/enterprise value, potentially indicating that they are undervalued.
Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: Market cap, outstanding debt and preferred shares. Companies with high ratios of levered free cash flow/enterprise value may be undervalued by the market.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these stocks are being underestimated by the market? Use this list as a starting point for your own analysis.
List sorted by LFCF/EV.
1. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services and software to the semiconductor, flat panel display, solar photovoltaic and related industries worldwide. Market cap of $16.28B. Levered free cash flow/enterprise value at 13.58% (levered free cash flow at $1.60B and enterprise value at $11.78B). The stock has had a couple of great days, gaining 5.68% over the last week.
2. General Electric Company (NYSE:GE): Operates as a technology, service and finance company worldwide. Market cap of $202.17B. Levered free cash flow/enterprise value at 12.44% (levered free cash flow at $71.75B and enterprise value at $576.94B). The stock has had a good month, gaining 14.67%.
3. Shaw Group Inc. (NYSE:SHAW): Provides technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services to multinational and national oil companies, industrial corporations, regulated utilities, independent and merchant power producers, and government agencies worldwide. Market cap of $1.84B. Levered free cash flow/enterprise value at 11.75% (levered free cash flow at $195.02M and enterprise value at $1.66B). The stock has had a good month, gaining 29.85%.
*LFCF/EV data sourced from Yahoo Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.