Why the Tech Sector's Hidden Gem Won't Fly Under the Radar Much Longer

Renewable energy often gets lumped into the energy sector, but it's really all about technology. And as Money Morning Defense and Tech Specialist Michael Robinson often says, "The road to wealth is paved with tech."

You see, unlike commodities like oil and gas, renewable energy sources are unlimited. It's just a matter of developing the technology that harnesses them, especially in solar. That also means investing in renewable power is more like investing in the latest tech breakthrough than a typical energy stock.

In fact, the price of renewable power is already plummeting, all thanks to technological improvements.

But there's one key area the industry still needs, and it's 100% about technology, even as alternative energy sources are becoming cheaper than fossil fuels.

It is a potential gold mine, too.

By 2050, clean energy investments will total $10 trillion. Already, the costs of wind and solar power have finally dropped below the cost of coal-fired power plants across much of the United States.

Solar and wind produced 7% of the world's electricity in 2018. By 2040, that could grow by 400%, according to the International Energy Agency.

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But there is a problem with such success. Wind does not always blow, and sunshine does not always reach the ground, both thanks to the weather. Therefore, we have to gather wind and solar power when they are available and store it for when they are not. And the energy storage sector hasn't quite caught up with other technological advances.

That's changing in a hurry, and we have one renewable energy stock worth keeping your eye on right now...

This Renewable Energy Stock to Watch Is Checking All the Boxes

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You might not think of Parker Hannifin Corp. (NYSE: PH) as an energy storage company. Its existing businesses include motion and control technologies, with solutions for mobile, industrial, and aerospace markets.

But it's a top five energy storage company according to Energy Acuity, a provider of power generation and power delivery market intelligence. Plus, Parker Hannifin has its hands in all sorts of tech advancements, especially in the defense sector.

Over the past decade, the company moved into the development and manufacturing of batteries for energy storage and delivery. And it has been successful in the installation of many battery arrays across North America.

For example, in 2017, the company partnered with AES Gener, a Chilean energy producer and supplier, to build an energy storage facility in San Diego, Calif. Contracted with San Diego Gas & Electric, the project included the installation of two storage arrays, with 75 megawatts of flexible storage capability.

As large-scale storage facilities expand, Parker will be positioned perfectly.

On a stock level, it is a dividend master, raising its dividend for the past 62 years. And it will have no trouble keeping on doing it with a low dividend payout ratio of under 30%. That means it has plenty of cash flow to support its payments.

PH stock is also up 32.4% year to date, compared to the S&P 500, which is up 24.2%.

Finally, it's earned a Money Morning Stock VQScore™ of 3.4, which means that even after a strong 2019 performance, it's close to our Buy Zone. It's worth keeping an eye on, and the whole sector is still on the brink of an explosive breakout as technology improves.

If you're looking for big, breakout gains, the renewable energy sector is where to be.

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