There are a lot of short- to medium-term uncertainties before us right now. The pandemic still keeps rearing its head. If the economic recovery is not fast enough, debt-ridden companies could suffer. And high inflation could take its toll on consumers’ buying decisions. This can make investment decisions more tricky than usual for a macro investor like me.
Green energy to gain momentum
But there is a way around it. The fact is, that there are some big themes that we could count on to gather more steam over the years. One of them is clean energy. We know that fossil fuels are on their way out, and these have to be replaced by renewable energy sources. This creates opportunity in the sector. And if the example of electric vehicle (EV) pioneer Tesla is anything to go by, the opportunity could be very rewarding for investors.
Keeping this in mind, here are two renewable energy stocks listed on the FTSE that I would buy and hold until 2030. I think by that time the industry will have matured significantly, giving an opportunity for a rethink on the stocks, if required.
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FTSE 100 clean energy stock
The first one I like is the FTSE 100 emissions control provider Johnson Matthey. It recently made a disappointing exit from the EV battery materials business, which seemed to hold a lot of promise. But even outside of that, the company is developing hydrogen fuel cells, which can create power without releasing any harmful emissions.
In any case, while there are still polluting vehicles on the road, the company’s products, which include emission control catalysts, are helping to keep air cleaner. It is a growing company, and one that is profitable too. I bought the stock recently and could buy more of it if the price stays weak.
FTSE 250 renewable energy stock
The FTSE 250 investment fund Greencoat UK Wind is another green energy stock I like. The company invests in wind farms, which is a fast growing sector in this country. In the past decade, energy generated through wind has risen some 700%. And today, 24% of all power, both renewable and non-renewable, is generated by wind energy in the country.
The company has so far seen fluctuating fortunes, but I reckon this could change over time as the sector grows. Also, it has been consistently profitable despite these fluctuations. This is important considering that it has a nice dividend yield of 5.3%, which is a good reason for me to buy the stock. I have not bought it yet, but it is on the list of stocks I could buy soon.
Other alternatives to consider
There are other renewable energy stocks to consider too. These include FTSE 100 utilities like SSE and National Grid that are producing renewable energy, at least in part. There is also the investment fund Renewables Infrastructure Group, with interests in wind and solar projects, for me to consider buying.
