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Summary
- The companies setting up targets of net zero carbon emission in view of climate pledge has led to a transition in the energy sector.
- It has created opportunities for companies in the energy sector to grow.
With the world striving to tackle climate change and temperature rise, renewable energy is the big thing in the coming future. Eyeing 2050, companies are aiming to achieve net zero carbon emissions. This has created a perfect environment for UK energy stocks.
Coal-based power plants are shutting down, and renewable energy infrastructures are being established worldwide. These radical changes are breeding opportunity for the UK energy sector.
Copyright © 2021 Kalkine Media Pty Ltd.
Hence, we will be looking at 5 energy stocks in this article that are worth discussing:
- SSE PLC (LON: SSE)
Headquartered in Perth, the FTSE 100-constituent, SSE PLC is a multinational energy company that is engaged in developing and operating renewable energy across the UK and Ireland.
As per the interim result published by the company for the six months ended 30 September 2020, SSE witnessed an exceptional growth of 183 per cent in the operating profit to £985.1 million and a surge of 544 per cent in the reported profit before tax to £829.5 million. The company also declared an interim dividend of 24.4 pence per share for the six months period.
The shares of SSE were trading at GBX 1,375.50 on 12 March at 9:47 AM GMT. The market capitalisation stood at £14,434.49 million; the company has delivered a negative return on price of 1.95 per cent on a yearly basis.
- Ceres Power Holdings PLC (LON:CWR)
Listed on the AIM market of the LSE, Ceres Power is a leading British fuel cell technology and engineering company, which is focused on the development of next generation solid oxide fuel cell (SOFC) and electrochemical technology.
In the trading update provided by the company for the 18-month period ended 31 December 2020, it said that the revenue and other operating income is expected to be in the range of £32-33 million, exceeding the market expectations. The company also revealed that it had made strong commercial progress with the order book and pipeline standing at £54 million, and £44 million, respectively, on 31 December 2020 (31 December 2019: £22 million and £50 million respectively).
The shares of CWR quoted GBX 1,192.00 on 12 March at 9:49 AM GMT. The market capitalisation stood at £2,117.71 million and the company delivered a positive return on the price of 239.71 per cent on a yearly basis.
- Drax Group PLC (LON:DRX)
Based in Selby, UK, Drax Group is a 16-year-old electrical power generation company. The company is involved in providing renewable and low-carbon generation and system support services.
The company posted a robust financial performance for the FY2020 ended 31 December 2020, delivering a slight increase in the adjusted EBITDA from continuing and discontinued operations to £412 million (2019: £410 million). At the 2020 half year results, the company confirmed an interim dividend of £27 million (6.8 pence per share). A total dividend of £68 million has been proposed by the group for the full year, equivalent to 17.1 pence per share (2019: £63 million, 15.6 pence per share).
The shares of DRX quoted GBX 372.20 on 12 March at 9:51 AM GMT. The market capitalisation stood at £1,476.95 million, and the company delivered a positive return on the price of 70.33 per cent on a yearly basis.
- Greencoat Renewables PLC (LON:GRP)
Established in 2017, Greencoat Renewables is an Irish investment company that invests in renewable electricity generation assets. The company is currently involved in investing in wind farms across France and Ireland and wind and solar assets in certain Northern European countries.
In the full-year results for the period ended 31 December 2020, the power generated by the group recorded 1,404 GWh of electricity, which was 3 per cent below the expected budget. In 2019, it had produced 1,154 GWh of electricity. The group was successful generating in net cash of €66.4 million (2019: €48.8 million). The total dividends reported by the company was 6.06 cent per share for the one-year period.
The shares of GRP quoted at EUR 1.16 on 12 March at 9:53 AM GMT. The market capitalisation stood at £736.21 million, and the company delivered a positive return on the price of 0.87 per cent on a yearly basis.
ITM Power PLC (LON:ITM)
Headquartered in South Yorkshire in the UK, ITM Power is an energy sector company that is well-known for manufacturing of world-class hydrogen energy solutions.
Despite the Covid pandemic, the company remains well poised to accelerate its manufacturing programme. In the six-month period ended 31 October 2020, the company recorded a 16 per cent increase YoY in the total income to £4.4 million from £3.8 million the previous year.
The shares of ITM quoted at GBX 506.00 on 12 March at 9:55 AM GMT. The market capitalisation stood at £2,901.97 million, and the company delivered a positive return on the price of 297.85 per cent on a yearly basis.
