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Alternative Financial Methods for Improving the Investment in Renewable Energy Companies

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  • José Luis Miralles-Quirós

    (Department of Financial Economics, University of Extremadura, 06006 Badajoz, Spain)

  • María Mar Miralles-Quirós

    (Department of Financial Economics, University of Extremadura, 06006 Badajoz, Spain)

Abstract

Renewable energies have increased in importance in recent years due to the harm caused to the environment by fossil fuels. As a result, renewable energy companies seem to be profitable investment opportunities given their likely substantial future earnings. However, previous empirical evidence has not always agreed about this likely profitability. In addition, the methodologies employed in the existing empirical literature are complicated and not feasible for most investors to use. Therefore, it is proposed an approach which combines the use of performance measures, screening rules, devolatized returns and portfolio strategies, all of which can be implemented by investors. This approach results in high cumulative returns of more than 200% and other positive ratios, even when transaction costs are considered. This should encourage people to invest in these renewable energies and contribute to improving the environment.

Suggested Citation

  • José Luis Miralles-Quirós & María Mar Miralles-Quirós, 2021. "Alternative Financial Methods for Improving the Investment in Renewable Energy Companies," Mathematics, MDPI, vol. 9(9), pages 1-25, May.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:9:p:1047-:d:549508
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    References listed on IDEAS

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