Strategies for building profitable portfolios in renewable energy companies

DOI: https://doi.org/10.18543/bee.2406
Keywords: renewable energy, energy companies, performance measures, screening test, devolatized returns

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.

Received: 30 March 2022
Accepted: 31 May 2022

Author Biographies

José Luis Miralles-Quirós, Universidad de Extremadura, Spain

Facultad de CC. Económicas y Empresariales.

María del Mar Miralles-Quirós, Universidad de Extremadura, Spain

Facultad de CC. Económicas y Empresariales. Universidad de Extremadura

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Published
2023-03-20
How to Cite
Miralles-Quirós, José Luis, and María del Mar Miralles-Quirós. 2023. “Strategies for Building Profitable Portfolios in Renewable Energy Companies”. Bulletin of Economic Studies 77 (233), 33-46. https://doi.org/10.18543/bee.2406.
Issue
Vol. 77 No. 233 (2022): Making the ESG revolution a reality
Section
Articles

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