The 2 Best Alternative Energy Stocks to Buy in November 2018

In October, the United Nations reported that the time to avoid the costly effects of climate change is nearly out. And the urgency to prevent this disaster is going to be a major catalyst for the best alternative energy stocks to buy in November 2018...

The UN Intergovernmental Panel on Climate Change (IPCC) warned that even if the 2015 Paris accords were fully implemented, it still wouldn't be enough to avert catastrophic environmental damage.

solar panels

That's a dire warning, but it also means investing in alternative energy is actually helping avert disaster. Of course, it also means alternative energy stocks could be hugely profitable for investors.

Governments and organizations worldwide are already ramping up spending in an effort to avoid global environmental damage.

The IPCC report forecasts that carbon emissions will need to be cut 40 to 50% by 2030 to turn aside economic effects resulting from dropping productivity, health concerns, and changes in weather patterns that will run into the hundreds of billions of dollars.

That's creating a massive, $1 trillion-a-year market for renewable energy, and we're going to show you the two best alternative energy stocks to own right now so you can profit from the spending surge...

Clean Energy Is a $1 Trillion Annual Market

The International Energy Agency (IEA) forecasts that global spending on decreasing carbon emissions will take $1 trillion on average annually through 2050. That's more than double the current $400 billion spent annually.

And this massive injection of cash will benefit the top renewable energy stocks.

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If $1 trillion seems like a lot, it pales in comparison to the alternative. Because climate change is going to cause a lot of damage that it's going to take a lot of money to fix.

The IPCC report pegs the economic result of a warming planet at $54 trillion if the earth grows warmer by 1.5 degrees Celsius by the 21st century's end. The price to fix damage will rise to $69 trillion if the rise is 2 degrees Celsius in the same time period.

Thankfully, these companies are in the business of preventing the worst-case scenarios...

What Companies Will Benefit From Climate Change Spending?

The first - and biggest - companies to benefit from climate change spending are renewable power companies, especially solar power.

Examples include First Solar Inc. (NASDAQ: FSLR), SolarEdge Technologies Inc. (NASDAQ: SEDG), Enphase Energy Inc. (NASDAQ: ENPH), and Vivint Solar Inc. (NYSE: VSLR).

Demand is likely to ultimately drive share prices upward.

The second category is companies specializing in energy efficiency. Their products and services are aimed at cutting back the use of energy overall. That decreases the carbon emissions stemming from fossil fuels and makes alternative energy go further.

Energy efficiency stocks include Johnson Controls International Plc. (NYSE: JCI), Ingersoll-Rand Plc. (NYSE: IR), Honeywell International Inc. (NYSE: HON), and Trimble Inc. (NASDAQ: TRMB).

But the best alternative energy stocks to buy have each earned a perfect Money Morning Stock VQScore™.

And one offers the potential for 70% upside this year alone...

The 2 Best Alternative Energy Stocks to Buy This Month

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Pattern Energy Group Inc. (NASDAQ: PEGI)

Pattern Energy is a builder and operator of power projects fueled by renewable energy in the United States, Canada, and Japan. These countries, all large and relatively wealthy, are likely to spend a great deal in the battle against climate change.

Pattern went public in 2013. Since then, it has grown its assets in renewables three times over.

It has also grown its cash flow by 135% over the last four years. The dividend the company pays out has kept pace. Pattern's stock yields a whopping 9.08% dividend payment.

Despite the potential, the stock is trading at a healthy discount. PEGI shares currently sell at $20.32, roughly 20% less than the IPO price. But that's good for savvy investors.

Pattern's price/earnings (P/E) ratio is slightly more than 15, and its PEG ratio is 0.0597. Both are better than the average stock and indicate an excellent buying opportunity. In other words, the stock has significant potential for a move to the upside.

Wall Street consensus places a price target of $28 on the shares over the next year, a 37% increase from current levels.

But we recommend this as one of the best alternative energy stocks to buy now as a long-term holding. It's got a big dividend, and rising cash flow is likely to make the stock even more appealing by 2020 or 2021, by which time the share price could rise 100%.

And our next stock has even more potential...

Canadian Solar Inc. (NASDAQ: CSIQ)

Canadian Solar designs and sells solar cells and aids in the construction of power plants.

CSIQ is one of the largest solar companies on the planet. Last year, it hit revenue of $3.39 billion, making it the world's second largest solar company in terms of revenue.

In the past 12 years, its solar module shipments have enjoyed a very robust 74% compound annual growth rate (CAGR).

It has grown the countries in which it does business to over 60 from fewer than 25 years ago.

Plus, it's a steal at today's share price, with the current P/E ratio sitting at a bottom-basement level of only 6.65.

It's only a matter of time before share prices catch up to demand. In fact, analyst Philip Shen of Roth Capital Partners places a 12-month target price of $24 on the shares, a 72% climb from the $14.90 at which they currently trade.

But, like PEGI, CSIQ shares will likely benefit from issues surrounding climate change in the long term, as solar is adopted ever more widely.

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