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  • Clean-energy stocks surged by about 200% this year, as oil-and-gas equities fell.
  • There are now 123 public clean-tech companies, making opportunities for investors to back the sector “practically limitless,” according to a new Raymond James report. 
  • The Wall Street bank shared its 7 top stock picks, ahead of a year that’s set to be huge for technologies that reduce carbon emissions.  
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It was a remarkable year for clean-tech equities, which surged about 200% since the start of 2020 and reached a combined market value of close to $1.5 trillion, according to analysts at Raymon James.

With 123 clean-tech companies now trading in US markets, the choice for investors is “practically limitless,” the analysts wrote in a report published Wednesday. About half of those companies — from wind giants to electric-car makers — trade on a well-known exchange and are worth more than $1 billion in market value, they said. 

The performance of clean-energy stocks this year is in stark contrast to that of oil and gas equities. The S&P 500 energy index, comprised of oil and gas firms, is down roughly 36% from the start of the year, compared to the broader S&P 500, which is up about 15%. 

Firms that sell oil saw demand for their products plummet with the spread of pandemic-fueled lockdowns. Hundreds of institutional shareholders — that manage as much as $19 trillion in assets — have also divested from coal or other fossil fuels, according to another Raymond James report, published in the fall. 

Meanwhile, 2021 is set to see the boom in climate-tech investing continue, more corporations pledging to reduce their emissions, and an administration step in that favors clean technologies. 

Read more: Top energy CEOs and investors share their best predictions for 2021, including a hydrogen boom, the rise of commercial EVs, and more layoffs in oil

Tesla Gigafactory

Tesla Gigafactory, located east of Reno
Bob Strong/Reuters

The ‘most investible’ sector of cleantech

The “most investible” sector of the cleantech industry is electric vehicles, at least from a market value standpoint, Raymond James said.

“Tesla’s stunning market cap ensures that,” the analysts wrote.

The number of public EV companies has almost doubled in the last year, from 10 to 19, the analysts wrote. That number is set to grow to 24 by early 2021, they added. 

The wind and solar industries — and, increasingly, companies involved in energy storage — are also investible, Raymond James said. Public firms in the battery supply chain have historically only included lithium suppliers, the firm said, but now batterymakers like QuantumScape are going public via blank check companies.  

The bank’s top picks

You won’t find big names like Tesla or Sunrun in a list of Raymon James’ top picks. Instead, it includes seven little-known firms, which the bank says encompass the “entire spectrum of Raymond James equity research:”

  • Canadian utility Algonquin Power & Utilities (AQN)
  • Biomass firm Enviva Partners (EVA)
  • Water treatment company Evoqua Water Technologies (AQUA)
  • Biofuel firm Green Plains Partners (GPP)
  • Energy and water management firm Itron (ITRI)
  • Lithium-tech firm Livent (LTHM)
  • Wind-blade manufacturer TPI Composites (TPIC)

“Needless to say, not everything in clean tech ought to revolve around Tesla,” Pavel Molchanov, an analyst at Raymond James, said in an email.