Three Key Players Thriving in the Energy Storage Market Boom

3 Companies Capitalizing on the Energy Storage Boom

Driven by increasing demand, energy integration, and advances in technology, the outlook for the energy storage industry looks promising. In this context, we will examine the potential of three notable companies: NextEra Energy (NEE), Brookfield Renewable (BEP), and Enphase Energy (ENPH) as they capitalize on this energy storage boom.

High demand from the residential sector, combined with efforts to reduce costs and improve technology, is fueling the growth of the energy storage market. This demand is further enhanced by ongoing initiatives aimed at integrating renewable energy, creating new opportunities. Given the industry’s bright prospects, investing in quality stocks such as NextEra Energy, Brookfield Renewable, and Enphase Energy could prove beneficial.

The energy storage market is experiencing substantial growth due to the depletion of raw materials necessary for battery production and rising residential demand. Companies are heavily investing in research and development while building renewable energy infrastructure to explore alternative energy sources, leading to promising opportunities in the energy storage sector. According to Global Market Insights, the U.S. energy storage market is projected to grow at a CAGR of 13.4%, reaching a market value of $305.50 billion by 2034. This growth is attributed to factors like grid modernization, supportive government initiatives, increasing installation of renewable energy, and research into alternative battery chemistries.

Now, let’s delve into the fundamentals of the three highlighted stocks:

NextEra Energy, Inc. (NEE)

NextEra Energy generates, transmits, distributes, and sells electric power to retail and wholesale customers. It produces electricity through wind, solar, nuclear, natural gas, and other clean energy sources. The company also develops, constructs, and operates long-term contracted assets that provide clean energy solutions.

On February 14, 2025, NEE’s Board of Directors declared a regular quarterly dividend of $0.5665 per share, marking a 10% increase from the previous year. This is part of the company’s plan to achieve approximately 10% annual growth in dividends, with payment scheduled for March 17, 2025, to shareholders of record as of February 28, 2025. NEE offers an annual dividend of $2.06, reflecting a yield of 3.03% at the current share price, with a four-year average dividend yield of 2.36%. The company has increased its dividends consistently for 29 years, showcasing a CAGR of 10.5% over the past five years.

On January 28, 2025, NEE reaffirmed its long-term financial expectations, projecting adjusted EPS in the range of $3.45 to $3.70 for 2025, $3.63 to $4.00 for 2026, and $3.85 to $4.32 for 2027. Its funding plan for 2024-2027 remains unchanged, including equity units of $5 billion to $7 billion and asset recycling of $5 billion to $6 billion. For the fourth quarter ending December 31, 2024, NEE reported operating revenue of $5.38 billion and operating income of $941 million. Adjusted earnings stood at $1.09 billion or $0.53 per share, reflecting increases of 2.6% and 1.9% year-over-year, respectively. Analysts anticipate a 20.4% increase in NEE’s revenue and a 4.6% rise in EPS for the second quarter ending June 2025.

NEE’s stock has appreciated by 1.4% over the past month and 21.5% over the past year, closing the last trading session at $68.06. The company’s solid fundamentals are evident in its POWR Ratings, which evaluate 118 different factors. Currently, NEE holds a B grade for Momentum, ranking #35 among 57 stocks in the Utilities – Domestic sector.

Brookfield Renewable Partners L.P. (BEP)

Based in Toronto, Canada, Brookfield Renewable owns a diverse portfolio of renewable power generation facilities worldwide. It generates electricity from hydroelectric, wind, solar, distributed generation, and pumped storage. Additionally, it produces energy through renewable natural gas, carbon capture and storage, recycling, cogeneration biomass, nuclear services, and power transformation.

BEP boasts a trailing-12-month gross profit margin of 56.09%, surpassing the industry average of 45.11% by 24.4%. Its trailing-12-month EBITDA margin of 52.62% is also significantly higher than the industry average of 37.26%. Moreover, its trailing-12-month CAPEX/Sales ratio of 63.53% exceeds the industry average of 34.65% by 83.4%.

During the fourth quarter ending December 31, 2024, BEP’s revenues grew by 8.2% year-over-year to $1.43 billion. The company’s funds from operations totaled $304 million, or $1.72 per share, reflecting increases of 19.2% and 21.1% from the previous year’s quarter. As of December 31, 2024, BEP had cash and cash equivalents of $624 million and total assets amounting to $44.13 billion. Analysts forecast a 15.7% year-over-year increase in BEP’s revenue, projected to reach $1.73 billion for the first quarter ending March 2025, while the company’s FFO for the same period is expected to grow by 7.1% to $0.48.

BEP shares have risen 1.5% over the past month, closing the last trading session at $22.43. The stock’s positive outlook is reflected in its POWR Ratings, where it holds a B grade for Momentum and ranks #7 in the A-rated MLPs – Other sector.

Enphase Energy, Inc. (ENPH)

Enphase Energy specializes in designing, developing, manufacturing, and selling home energy solutions for the solar photovoltaic industry globally. The company offers a semiconductor-based microinverter that converts energy at the individual solar module level, integrating it with proprietary networking and software technologies to facilitate energy monitoring and control.

On February 11, 2025, ENPH launched an expanded IQ® Battery 5P™ product, compatible with both single-phase 120/208 V and split-phase 120/240 V for new home projects in California. This product aims to provide an optimal storage solution for both single- and multi-family homes in the state. Additionally, on January 30, 2025, ENPH expanded its operations into Southeast Asia, entering the solar markets in Vietnam and Malaysia, where it shipped IQ8P™ Microinverters to support newer high-powered solar modules.

For the fourth quarter ending December 31, 2024, ENPH reported a net revenue increase of 26.5% year-over-year to $382.71 million. Its non-GAAP gross profit reached $203.75 million, up 33.9% from the previous year, while non-GAAP income from operations surged by 83.6% to $120.43 million. The company’s net income totaled $125.86 million, or $0.94 per share, reflecting growth of 71.3% and 74.1% year-over-year, respectively. Analysts predict a 36.1% year-over-year revenue growth for ENPH, expected to reach $358.39 million for the first quarter ending March 2025, with EPS anticipated to grow by 106% to $0.72.

Over the last three months, ENPH’s stock has gained 0.6%, closing the last trading session at $63.94. ENPH’s POWR Ratings indicate a strong outlook, with an A grade for Quality and Growth, ranking #2 among 14 stocks in the Solar industry.

Conclusion

In conclusion, the energy storage market presents significant growth opportunities, and companies like NextEra Energy, Brookfield Renewable, and Enphase Energy are strategically positioned to leverage this boom. Investing in these stocks could be a wise decision considering their fundamentals and growth potential.