Nine Hot Geothermal Stocks to Consider Adding to Your Portfolio

One of the alternative energy industries that hasn't received much press coverage is the geothermal group of stocks. Geothermal generation utilizes natural underground heat sources that powers a turbine which turns a generator. The word 'geothermal' comes from the Greek words 'geo', which means 'earth', and 'therme,' which means 'heat'. As it turns out, several of these geothermal stocks have been steaming in terms of stock price.

Here is the list:

Calpine Corporation (CPNLQ.PK), was founded in 1984. This San Jose-based company provides electricity in the United States, and Canada through the ownership, and operation of its own power generation plants. It owns 19 geothermal power plants at The Geysers in California. Its earnings have been negative, but revenues were up about 27% for the latest quarter.

Constellation Energy Group (CEG), was founded in 1906. This electrical generating company owns, and operates generating plants and fuel processing facilities utilizing various types of fuel including nuclear, coal, natural gas, oil, solar, geothermal, hydro and biomass. It has a P/E of 15.8, and a PEG of 1.43. Its yield is 2%.

IdaCorp, Inc. (IDA), is the holding company that owns the Idaho Power Company, which is involved in the generation, transmission, distribution, and sale of electric energy primarily in southern Idaho, and eastern Oregon. Its electrical generation comes from hydroelectric, natural gas, diesel, coal, and geothermal plants. It has a P/E of 12.6, and a PEG of2.92. It has a yield of 3.8%.

Nevada Geothermal Power, Inc. [NGLPF.OB], explores for, and develops geothermal projects in the United States to provide electricity. It owns a 100% leasehold interest in the Blue Mountain, Pumpernickel, and Black Warrior projects in Nevada, and the Crump Geyser Project, in southern Oregon.

Ormat Technologies Inc. (ORA), is a Nevada-based company, that was founded in 1965, and trades on the New York Stock Exchange. It owns, and operates geothermal power plants, that sell electricity in the United States, Guatemala, Kenya, Nicaragua, and the Philippines. It also provides products, and services to other geothermal power generators. It has a P/E of 70.2, a PEG of 2.67, and a yield of 0.5%.

PG&E Corp. (PCG), is a California-based electric, and gas utility which serves 5 million customers. Its electrical generation comes from natural gas, nuclear, hydro, coal, geothermal, wind, and several other types of renewable sources. It has a P/E of 15.6, and a PEG of 2.08. Its yield is 3.2%.

Polaris Geothermal (PGTHF.PK), is a developer of renewable energy in Latin America. It is currently developing a 66 MW geothermal project on its San Jacinto Tizate concession in Nicaragua.

Raser Technologies (RZ), is a Utah-based company that was founded in 2003, and trades on the New York Stock Exchange. It develops high performance electric motor, and controller technology. In addition, it has secured geothermal rights to certain Nevada properties owned by Truckee River Ranches, LLC, under the terms of a 50-year lease agreement. Its earnings have been negative.

Sierra Geothermal Power Corp [SRAGF.PK)], is a developer of renewable power from geothermal sources. It has investments in 15 geothermal projects located in Nevada, and California.

U.S. Geothermal Inc. (UGTH.OB) , is a Boise-based company, that was founded in 2002. It is involved in the development of geothermal energy power plants in the Raft River area of Idaho. Its earnings for the latest quarter were negative.

Western GeoPower Corp [WGPWF.PK] , develops geothermal energy projects. It owns the Unit 15 Steam Field located in The Geyser Geothermal Field in California, and in the South Meager Geothermal Project in British Columbia, Canada.

WFI Industries (WFILF.PK), is a Fort Wayne, Indiana company that develops, and manufactures geothermal heating and cooling systems, for both residential, and commercial customers. It has a P/E of 35.5.

Disclosure: The author does not own any of the above.

Comments

[Pete C.:]

I'm not sure why geothermal energy doesn't get more attention. To me, the investment prospects and the energy itself are very appealing. There are a bunch of well-known companies in this sector and some are mentioned above: Constellation, U.S., etc.

I found a list of some lesser-known companies: cleanenergysector.com/.../

Anyone have any good info on some more speculative plays?

2008 Dec 17 02:54 PM

[itirvin6:]

First of all I appreciate the 9 companies mentioned in the first article
and the link Pete C added. I will tell you where I got into Geothermal
as an energy stock play later.

But first: I cannot do the geothermal speculative plays (penny geothermal essentially) though full disclosure, there is a part of me that would love to do that.

But laid off at 63 I am living off my savings and must have income.
So I like the stocks mentioned that have at least some dividend.

Now the biggest non speculative geothermal play of all--it may be Chevron! Chevron produces more Geothermal power world wide than any other company (well at least according to Conde Nast Portfolio magazine article April 2009-I know bring on the fact checkers). Chevron as I write this (April 18,2009) way down to $66 (once at $112) with a 3% dividend. You can search the net and find interesting links with Chevron and Geothermal. Incidentally, Exxon is doing zilch with anything renewable and proud of it.

Anyway, if you are building a geothermal portfolio because you sense that geothermal has more potential that the solar or wind, then why not think some Chevron (comments).

How I got into Geothermal:
I subscribe to a magazine called "Skeptic". "Skeptic" is more about putting the scientific method on to anything than it is about
energy and they never give advice about stocks. But the vol 14 no.1 2008 has a brilliant article comparing energy sources (you will never consider hydrogen again) and geothermal came out on top passing solar and wind easily for potential. Big solar (cf big oil)
is going through a crises because the cheapest build is in the desert and suck up all the water resources (which is, of course, a no no in the desert), wind is warm and fuzzy but limited, even Denmark which has sold their soul to wind only gets 35% from wind. I don't know why those dratted windmills have taken over the air waves.

anyway, many thanks to Peter C for opening up more geothermal stocks. I am really looking for companies that have 1) experience 2) pay a dividend. I am looking into Chevron as core of the Geothermal portfolio.

Tucker I.

tucker

Apr 18 02:52 PM

[wind4me:]

I really like Nevada Geothermal for the 49mw's of green clean power coming online October 2009. With ORA, you get a much safer profitable company but with Nevada Geothermal approaching revenues and profitability, you get a much greater growth strategy and a pure player in Geothermal. ORA much safer, NGLPF.ob much greater growth opportunity and pure clean player!
Calpine with natural gas not as pure player in Geothermal. RZ with the batteries side, not a pure play geothermal power producer. HTM is still a few years away but well financed now with the DOE money loan. ORA has more geothermal power online than anyone in world so ORA is the 800#Gorilla in geothermal. However, with the Nevada Geothermal play, you have growth coming in spades as the power revenues achieved in October allow Morgan Stanley to refinance NGLPF.ob loans and allow for more expansion into Blue Mountain II and into Pumpernickel. Look for the government to sponsor more geothermal drilling legislation which will allow geothermal companies to expand and prosper.

Jun 06 08:36 AM

[sildenafil:]

Big solar (cf big oil)
is going through a crises because the cheapest build is in the desert and suck up all the water resources (which is, of course, a no no in the desert), wind is warm and fuzzy but limited, even Denmark which has sold their soul to wind only gets 35% from wind. I don't know why those dratted windmills have taken over the air waves.

Oct 28 05:34 AM