2 green stocks that I think are no-brainer buys for the future

Jon Smith explains two of his favourite green stocks at the moment, one for growth and the other for income potential.

| More on:
Renewable energies concept collage

Image source: Getty Images

When I talk about green stocks, I’m referring primarily to renewable energy stocks. However, green stocks do also have a broader reach, to include companies that I feel are making an effort to minimise their carbon footprint or other notable initiatives. Investing in these types of stocks helps my conscience, but here are some that I also think could offer me good returns for years to come in the future.

Momentum in the hydrogen space

The first green stock I like is ITM Power (LSE:ITM). The business designs, manufactures, and integrates electrolysers to produce green hydrogen. It has a range of commercial potential uses, including as fuel. The only waste is water and green hydrogen can be stored in tanks for long periods of time — it’s easy to see why people are excited.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

ITM Power is really starting to get up and running. The stock won a project grant from the German government in January. It has secured investment from the UK government last November for the first phase of an ongoing project at the Whitelee Windfarm hydrogen facility.

The share price is down 11% over the past year, but up 50% over two years. I think that with momentum from the recent investments and the prospect of increased production in the next year or so, the share price could really start to take off.

There is some risk that the market finds issues with green hydrogen in practice, but for the moment I think it’s a viable form of clean energy for the future.

A green investment stock

Another company that fits the bill is Greencoat Renewables (LSE:GRP). I think this is a no-brainer buy not for share price growth, but rather for dividend income in my portfolio. The company invests in wind and other renewable energy projects in Europe, with the aim of distributing returns via dividends. Currently the dividend yield sits at 5.22%, with the share price up 1% over the past year.

Wind energy is an area of high public and private investment, and one that I think will continue in the future. I like the fact that Greencoat has project in different countries in its portfolio. Although there is a lot of exposure in Ireland, it also has projects in France, Spain, Finland, and Sweden. This should diversify business streams in the future, helping to mitigate any potential problems.

I do know that getting wind projects up and running can be very expensive. This might make it tough for Greencoat to step up to the next level as private investors might favour cheaper green energy options. However, I think there is enough funding already in this space to ensure the dividends stay generous and consistent.

I think that both green stocks will perform very well in the future given the sector. Therefore, I’m wanting to buy shares in both companies at the moment.

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

Jon Smith and The Motley Fool UK have no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Young brown woman delighted with what she sees on her screen
Investing Articles

3 easy actions that could boost my stock market returns

The UK stock market is going through a sticky patch so this Fool is looking for ways to improve his…

Read more »

Hispanic man using laptop in home office and drinking coffee
Investing Articles

Boohoo shares: time for me to admit defeat?

This Fool is nursing heavy losses from his Boohoo Group (LON: BOO) shares. Should he sell up and move on?

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

6% dividend yields! 2 cheap UK shares to buy in July

Harshil Patel considers two cheap UK shares paying fairly high dividends. He'd consider them for his Stocks and Shares ISA.

Read more »

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »