Green: Good for the Environment, Good for Business

Let's face it, green business is huge. Think five years back and it was still something that several companies were skeptical about getting into. Today, it seems to be becoming the norm. People feel that they want to help the environment, and businesses want to help the people. The rising price of oil has only aided the need for alternative and generally cleaner energy.

Either candidate for the Presidency, liberal or conservative, plans some sort of action that encourages reducing our carbon footprint with clean energy. Even if there is a lack of subsidies for clean energy, the fact that oil is pricey and that it will likely continue upward due to basic supply and demand factors means that clean energy is getting more competitive and attractive. These factors are shaping up to make clean energy a great investment in the coming years.

Several funds have emerged with the wave of thinking green. I prefer a couple that have been around for at least a few years. The first, Winslow Green Growth Fund (WGGFX), was started in 2001 and has had the same manager since 2002. Although the expense ratio is a little high at 1.49%, it has shown annualized returns of about 25% over the last five years. Unfortunately, it's not cheap with a minimum investment of $5,000.

A good, more flexible alternative is PowerShares Wilderhill Clean Energy (PBW) ETF. It was started about three years ago. The index that it follows has had five-year annualized gains of over 18%. With an expense ratio of .60% and a minimum investment of only one share, PBW is a great way to invest in clean energy for a small amount of money. PBW is currently trading around $22 a share.

I would also recommend a couple of individual stocks. The first is conglomerate giant, General Electric (GE). GE has been hit incredibly hard recently -- and for good reason. Growth has gone flat and things currently look bleak. GE will, however, inevitably recover and has shown it has good intuition about green growth in the past.

Well known for its Ecomagination marketing campaign, the company has put its money where its mouth is. In 2007, the company's energy efficient and environmentally advantageous products and services brought in over $14 billion in revenue, up 15% from 2006. It continues to make promises, such as reducing its water consumption by 20% by 2012, that are both good for the environment and good for business. GE is a great long term option at around $30.

Evergreen Solar (ESLR) is a unique solar panel company. It has found a production process, called String Ribbon manufacturing, that not only makes a more efficient solar panel, but also make it cheaper for the company to produce.

Evergreen Solar produces wafers, cells, and panels. The company signed its most recent sales contract of $1 billion on May 22nd. It is a good long term investment at $10.

Disclosure: I own GE.

Comments

[Ellis Wyatt]

This is a bad bet. Because the "Global Warming" debate is finally public, people will learn that many companies are banking on the government to force their products on the American public. When they learn what it will cost them, they will revolt. The companies will find their new-found friends in government will desert them. I do not want to be holding stock in a company that makes things that do not make economic sense.

[Sean Keller]

Well thank you, Ellis, for throwing out a smack talk for me to counter. First of all even if government backing falls away average consumers will still do business with socially responsible companies. The people have a voice there. Second, most of this big manufacturing companies have a place in the coming economy and haven't even grown to what they will be. Yet they still have had 20% increases and inked billion dollar deals. Third, the "new found friends in government" will want to keep their position in politics. The safest bet for them is to do their best to help us avoid droughts, floods, high cost of fossil fuels, and high cost of food and water and heat.
Finally, this article is just about a few bright stock options. Don't stray away from the environment because the immediate return isn't so high and because you think the global warming discussion is driving it. We have 2700 listings at www.greencollareconomy... and growing. Check them out.

[EnergyFinancier]

If you're interested in learning more about finance and investment in green industries, you should attend the Renewable Energy Finance Forum-Wall Street, held June 18-19 in New York City. The event will feature more than 40 high-profile speakers from companies including GE, BP Alternative Energy, JPMorgan, Credit Suisse, and more. These industry leaders will share their thoughts on the current state of the industry, as well as where it is headed. Topics for discussion include solar power, wind energy, biofuels, the role of venture capital, the economic and policy factors fueling development, and more.

For more information, visit www.REFFWallStreet.com.

[Eric T]

Let's just hope the real minds driving the green technologies like Evergreen's aren't as weak and fickle as the market speculators who panick every time a German solar subsidy is being threatened.
I own shares in ESLR, and can't wait to see you eat your words, Ellis
I saw very little "revolt" when we all learned what Iraq was costing us...Green energy should be but a drop in the bucket compared with that fiasco.

[Eric T]

I know, I spelled Panic wrong.