Ford Motor Co. (F)

"I like Ford and their electric vehicle strategy and believe it will help to preserve one of America's icons," says Stephen Akin, registered investment advisor with Akin Investments.

Through 2026, the automaker is investing more than $50 billion globally in electric vehicles and plans to be able to build more than 2 million of them per year by the end of 2026. The annual run rate by the end of this year will be 600,000.

"I like Ford and their electric vehicle strategy and believe it will help to preserve one of America's icons," says Stephen Akin, registered investment advisor with Akin Investments

Ford has already started electrifying some of its most well-known models, offering an all-electric Mustang and F-150. It also offers all-electric vans, a charging network with more than 75,000 chargers, and more than 2,700 EV-certified dealers in all 50 states.

"This electrification strategy is a core component of Ford's goal to (achieve) carbon neutrality globally by 2050," the company says. "Ford is investing significantly to accelerate research and development of battery and battery cell technology."

Whether publicly traded firms are pure-play "green" companies or not, more and more of them are reporting environmental, social and governance, or ESG, criteria as a way of communicating risks and benefits to investors and the wider public.

There's an argument to be made that companies that don't take such environmental concerns into account in their regular filings run the risk of being passed over by investors who want more transparency.

"Those companies that don't take the environment into account will face more and more regulatory and business risks and therefore bear more negative financial materiality consequence in the long term due to their irresponsible risk management," says Hua Cheng, a portfolio manager at Mirova US.

On the other end of the spectrum, companies that are involved in de-risking the world and themselves from a climate perspective offer investors a new value proposition.

"When you take a long-term view, we believe companies that integrate sustainable practices will outperform environmental laggards because of innovation advantages and risk mitigation," says Peter Krull, director of sustainable investing at Earth Equity Advisors.

In the shorter term, there are also tailwinds that make green companies more attractive for investors.

"We believe companies that integrate sustainable practices will outperform environmental laggards because of innovation advantages and risk mitigation." - Peter Krull, director of sustainable investing at Earth Equity Advisors

According to Cheng, appetite for green stocks has been improving recently because of favorable government policies such as those included in the Inflation Reduction Act, gradual easing of global supply chain constraints, a likely peak of inflation and expected limited further interest rate hikes, and attractive valuations.

With that background in mind, here are some of the best green stocks:

• NextEra Energy Inc. (ticker: NEE) 

• Iberdrola SA (IBDRY)

• General Motors Co. (GM)

• Ford Motor Co. (F)

• Livent Corp. (LTHM) 

• Albemarle Corp. (ALB)

• Alexandria Real Estate Equities Inc. (ARE)

• Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI) 

NextEra Energy Inc. (NEE) 

The first two stocks on this list, NextEra and Iberdrola, are both utilities, but they have different models and are complementary in portfolios, says Cheng. Both are also well managed and trade at attractive valuations, he says.

NextEra Energy is the holding company of utility  Florida Power & Light and wind and solar electricity supplier NextEra Energy Resources.

"NextEra Energy is our top pick of green stocks in the U.S. for its proven long-term operational excellence, financial strength, visible growth opportunities and attractive valuation," Cheng says.

Because it is the biggest generator of wind and solar energy in the nation, it is well positioned to play a leading role in decarbonizing not only the U.S. power sector but also the whole U.S. economy over the next several decades, Cheng says.

berdrola SA (IBDRY)

Energy independence is top of mind for many nations, but the war in Ukraine brought Europe's need to diversify from its dependence on Russian oil and natural gas into sharp relief.

Companies that can help European nations pursue their agenda for both energy independence and green energy stand to do well.

"Green stocks … play an important role in the race to energy independence, which is especially in Europe an additional important growth driver next to the positive contribution to the fight against climate change," Cheng says.

That leaves Iberdrola well positioned. The Spanish multinational electric utility company that is also the parent company of Avangrid Inc. (AGR), an energy services and delivery company heavily involved in renewables, is a leading utility in wind and solar generation in Europe, the U.S. and Latin America.

"From a valuation perspective, the company is trading at what we believe is a very significant discount to intrinsic value, and offers an attractive dividend yield," Cheng says

General Motors Co. (GM)

Sales of electric vehicles in 2022 bucked the trend of a general slump in auto sales.

According to the International Energy Agency, global sales of electric cars jumped to 10 million vehicles last year from 6.6 million in 2021.

"Electric car sales increased in all markets, boosted by an increasing number of models, high oil prices and targeted policy support," the agency says.

"Looking at our stock picks, every major auto manufacturer has committed to transitioning their fleet to electric vehicles," Krull says.

It's no wonder that the electric vehicle market has been one of the most popular investing themes on Wall Street in recent years.

General Motors is the largest U.S. manufacturer of cars and trucks, and it is planning to invest $35 billion in electric vehicles in the 2020-2025 period and transition entirely to EV production by 2035.

Ford Motor Co. (F)

"I like Ford and their electric vehicle strategy and believe it will help to preserve one of America's icons," says Stephen Akin, registered investment advisor with Akin Investments.

Through 2026, the automaker is investing more than $50 billion globally in electric vehicles and plans to be able to build more than 2 million of them per year by the end of 2026. The annual run rate by the end of this year will be 600,000.

"I like Ford and their electric vehicle strategy and believe it will help to preserve one of America's icons," says Stephen Akin, registered investment advisor with Akin Investments

Ford has already started electrifying some of its most well-known models, offering an all-electric Mustang and F-150. It also offers all-electric vans, a charging network with more than 75,000 chargers, and more than 2,700 EV-certified dealers in all 50 states.

"This electrification strategy is a core component of Ford's goal to (achieve) carbon neutrality globally by 2050," the company says. "Ford is investing significantly to accelerate research and development of battery and battery cell technology."

Livent Corp. (LTHM)  

Electric vehicles need lithium to power their batteries.

Livent, a world leader in lithium production, has a long-term supply agreement with General Motors to deliver lithium hydroxide starting in 2025.

Amid the growing demand for lithium, Livent is working to build up its capacity, saying it expects expansions to drive 20% higher sales volumes this year.

In February, the company said it was on track to add 20,000 metric tons of lithium carbonate capacity in Argentina by the end of this year, with half of that expansion already mostly finished. It is also expanding lithium hydroxide capacity in China.

"With a long-term contract signed with General Motors and continued adoption of EVs globally, lithium should continue to enjoy strong demand for the foreseeable future," Krull says.

He says the stock's price now, at $21.15 as of March 14, may be a good entry point. It has fallen from a high last year in the mid-$30s.

Albemarle Corp. (ALB)

Lithium is also critical to the batteries in utility-scale renewable energy projects, making the lightest metal on Earth indispensable to the global energy transition away from fossil fuels. It's also used in batteries for personal electronics.

U.S. lithium processing capacity is underdeveloped compared with China, and Washington is supporting companies like Albemarle to ensure greater energy independence.

The company has inked agreements with the U.S. Department of Energy to build a North Carolina lithium facility and a massive processing plant in Arizona. It has also announced plans to expand its extraction site in Nevada.

Last month, the company said its fourth-quarter net sales jumped more than 193% compared with Q4 2021, and adjusted diluted earnings per share rose 753.5%.

"Our growth potential extends well beyond the current EV opportunity," Albemarle CEO Kent Masters said in a statement accompanying the results. "Even as we expand capacity to respond to growing demand, we are maintaining a disciplined approach to capital allocation in order to drive long-term value."

Alexandria Real Estate Equities Inc. (ARE) 

"Real estate developers have realized that integrating sustainable practices into their buildings is better for the bottom line, not just the environment," Krull says.

As a real estate investment trust, or REIT, focused on office space for life sciences businesses, Alexandria Real Estate Equities is insulated from the work-from-home trend because most of those life sciences jobs require office space for research and development, Krull says.

"ARE is a leader in sustainable building practices as well as creating healthy workspaces," he says.

After hitting a high of about $216 at the end of 2021, the stock has fallen to $126.53 as of March 14. With the low share price and a dividend yield of about 3.8%, Krull says Alexandria Real Estate Equities may be a good growth and income opportunity.

Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI) 

This REIT says it is the first U.S. public company solely focused on climate solution investments. It provides capital to companies involved in energy efficiency, renewable energy and other sustainable infrastructure markets.

As of Dec. 31, 57% of Hannon Armstrong's $4.3 billion portfolio was in energy efficiency, distributed solar and storage markets, while 39% was in grid-connected wind, solar and storage.

HASI is the top green stock pick for Samuel Adams, CEO of Vert Asset Management and portfolio manager of the Vert Global Sustainable Real Estate Fund (VGSRX).

"It would go on the short list for the greenest REIT and would make it on the short list of greenest companies overall as well," Adams says.

For companies transitioning to sustainable infrastructure, the Inflation Reduction Act has incentives available, which will be a tailwind for Hannon Armstrong, Adams says.

"HASI will benefit from this support as it will make demand for their services even greater than it already is," he says.

https://money.usnews.com/investing/stock-market-news/slideshows/best-green-stocks-to-buy