Global warming and climate change have had an undeniable impact on people around the world. Driven by the need to reduce carbon emissions and the limited supply of fossil fuels, investors are looking to support renewable energy companies in an effort to make life sustainable for future generations.

Do you want to get involved in protecting the planet? Here is a guide to help you invest in renewable energy stocks that are constantly growing in the market.

Overview: renewable energy stocks

Energy stocks can be mainly differentiated into 2 categories – renewable and non-renewable energy companies.

Businesses that engage in the production and distribution of energy from finite resources such as coal, oil and natural gas are considered non-renewable energy stocks. Companies that produce and distribute energy from renewable resources such as solar, biomass, wind and water are considered renewable energy stocks.

Coal was used in the early 1800s to power ships and steam trains. Then, wood became the main source of energy in the United States. Wood was the only commercialized resource for renewable energy until the first hydroelectric power station began producing electricity in 1882.

Even though oil prices have been hit hard in recent years, traditional mega-cap oil companies like ExxonMobil (NYSE: XOM) and BP (NYSE: BP) are viewed as less risky investments. These oil and gas companies apply proven industrial processes to generate energy. The value of renewable energy stocks is comparatively more volatile due to the increasing expenses related to the development of innovative technologies for more efficient and environmentally friendly energy production.

The first solar panel was developed in the mid-1900s and sparked a renewable energy revolution. Solar stocks like First Solar (NASDAQ: FSLR) and Tesla (NASDAQ: TSLA) are pioneering battery technologies that can empower cars, homes, and shopping complexes at affordable prices. Investing your money in renewable energy stocks can speed up research and give oil companies a chance to make their money.

Best Online Brokers for Renewable Energy Stocks

Online brokers provide user-friendly tools for both new and seasoned investors to improve their trading tactics. You can use these tools to find and filter stocks based on your financial goals. These platforms are integrated with a fully customizable stock screener. For example, you can set the price range between $ 0.1 and $ 10 to quickly find stocks under $ 10.

Take a look at these online brokers to start your investing journey.

Features to look for in renewable energy stock

1. Earnings per share: You can calculate a company’s earnings per share (EPS) by dividing its net income by its total number of shares outstanding. Stocks with negative EPS are considered bad investments and may mean the company is at a loss.

2. P / E ratio: The price-earnings ratio (P / E) helps you determine whether a stock is undervalued or overvalued. The lower the P / E ratio, the better the investment. Many stocks under $ 5 have the lowest P / E ratios.

3. Liquidity: Consider the average volume of company shares traded per day before making a decision. Renewable energy stocks may seem like an attractive investment, but make sure there are enough takers before buying into these stocks.

Make sustainable investments

Global warming and climate change have raised concerns for our environment. Renewable energy companies are leading the change with innovative technology to produce energy with the least carbon footprint. You can consider investing in these clean energy stocks to pave the way for a better, brighter future.