The Motley Fool: Every Sunday, useful tips on investing
Q: What companies should I look at to invest in renewable energy?
A: You could invest in smaller companies with tight focuses on niches in the sector, but you can’t know which of them will win out in the long run.
You might instead opt for a reliable utility company with alternative energies in its mix.
Or perhaps consider some big companies with significant renewable operations. (Utilities and large-cap companies tend to offer dividends, as well.)
ABB (NYSE: ABB) provides power and automation technologies worldwide, and is a major developer of solar and wind-power projects, such as big, onshore wind farms in Europe.
It recently bought Power-One, a leading manufacturer of solar-power inverters.
Then there’s General Electric (NYSE: GE), known for its jet engines, light bulbs and much more.
It’s also beefing up its investments in alternative energies. Along with Siemens AG (NYSE: SI), GE is a global leader in wind turbines.
You might also consider some mutual fundlike exchange-traded funds (ETFs), such as the Market Vectors Global Alternative Energy ETF (NYSEArca: GEX) or the PowerShares Global Clean Energy Portfolio (NYSEArca: PBD).
They offer easy exposure to dozens of alternative energy companies, many on the small side.
Dear Fool: Back in the 1980s, I saw an article about a new company. It sounded really interesting, and I had a gut feeling it would be a good investment.
I spoke to my broker, but he talked me out of investing in it. One word: Microsoft! I’ve never trusted a stockbroker since.
The Fool responds: That’s a painful loss, as Microsoft shares have grown more than 500-fold since they debuted in 1986. Not all stockbrokers are savvy, skilled and working hard to maximize your gains. But even the best of them make some bad calls now and then, as do the best investors.
And when Microsoft was young and small, it was far from clear that it would grow to dominate its market so much. There are small companies around today that people will be slapping their foreheads about in regret 20 years from now. It’s best to take responsibility for our own investment decisions, ideally doing our own research and thinking. If that’s too much, as it is for many, opt for a simple, inexpensive broad-market index fund.
Marriott International (Nasdaq: MAR) is on the move again thanks to a general upswing in travel and the IPO of larger rival Hilton spurring interest in the sector.
But you might do well to go with Marriott instead.
With more than 3,800 properties in 74 countries and 19 hotel brands, Marriott is raking more than $13 billion annually.
Its brands include The Ritz-Carlton, Bulgari, Renaissance, Courtyard, Fairfield Inn, Residence Inn and Springhill Suites.
The company’s franchise model has been working, and there’s significant insider ownership, with about 25 percent of shares held by Marriott family members.
The company rewards shareholders with a dividend that recently yielded 1.4 percent, and it has bought back nearly $2 billion of shares in the past few years.
In its last quarter, Marriott’s revenue grew by 15.8 percent over year-ago levels, while earnings rose 12 percent, with both numbers topping expectations.
The company is growing its business, with around 850 properties in development and an additional 144,000 rooms on the way, mainly international.
It recently bought rights to an African property that will make it Africa’s biggest hotel company.
Sporting a price-to-earnings (P/E) ratio near 23, the stock isn’t a screaming bargain, but it’s not vastly overvalued, either.
Quarter after quarter, and year after year, Marriott management has delivered solid returns, with a focus on shareholder value. Growth-seeking investors should take a close look.