How do renewable energy companies’ finances compare with oil & gas cos.?

I often get emails from friends, family and business associates who are skeptical about the viability of the renewable energy industry. An article published recently in The New York Times, titled:  “Renewable Energy Stumbles Toward the Future“, gives one the impression that the sector may not be viable. The theory is based on the several backruptcy cases in the sector such as SunEdison, Abengoa, Solyndra and the ousting of NRG’s CEO, David Crane for pursuing an aggresive renewable energy strategy.

So I took a look at the financial data of the sector compared with other energy based sectors and summarized my findings below. (All data is updated to January 2016 and based on publicly traded companies’ SEC filings, impressively compiled by Professor of Finance at the Stern School of Business at New York University, Aswath Damoradan).

Industry Name: Green & Renewable Energy

Number of firms: 28

Net Margin: -6.17%

Pre-tax Unadjusted Operating Margin: 16.14%

After-tax Unadjusted Operating Margin: 16.01%

Pre-tax Lease adjusted Margin: 13.41%

After-tax Lease Adjusted Margin: 13.31%

Pre-tax Lease & R&D adj Margin : 13.42%

After-tax Lease & R&D adj Margin: 13.32%

EBITDA/Sales: 35.84%

EBITDASG&A/Sales: 56.28%

EBITDAR&D/Sales: 36.07%

That’s pretty impressive for a young industry.

now let’s compare those numbers with other energy related sectors:

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