What if you could find an investment that can address the world’s climate crisis, power transportation, and produce electricity while having loads of growth potential? These are the best RNG stocks to invest in today.
That’s how many see renewable natural gas or RNG, a clean and affordable fuel that truly turns trash into treasure and potentially waste into wealth.
The world can use this biogas alternative fuel to run homes, businesses, and vehicles. Since RNG production and use are rising, it could also power your investment portfolio to new heights.
Want to know more about this alternative fuel, its production, and stocks tied to RNG? Here, we have the 411 stocks related to RNG, its future as fuel, and investments you could make in RNG.
When you learn more about this burgeoning clean energy option, we think you’ll be interested in adding this sector to your portfolio for future growth.
Table of Contents
- Our Methodology for Selecting the Best RNG Stocks
- Risk Tolerance
- Time in the Market
- Investor Activism
- Stocks vs. ETFs
- Passive Income
- Analysts’ Ratings
- Multiple Sectors
- Best Renewable Natural Gas Stocks
- 1. EQT Corporation (EQT)
- 2. Ameresco Corp. (AMRC) – Best for Growth
- 3. Archaea Energy (LFG) – Best for Stability and Growth
- 4. Atlantica Sustainable Infrastructure (AY) – Best for Clean Energy Sector
- 5. BP (BP) – Best for Buy and Hold
- 6. Brightmark Energy (BMRK) – Best for Profit Potential
- 7. Cheniere Energy (LNG) – Best for LNG
- 8. Chevron Corp. (CVX) – Best for Low Volatility
- 9. Clean Energy Fuels Corp. (CLNE) – Best for U.S. Focus
- 10. Dominion Energy (D) – Best for the Long-Term
- 11. Enbridge (ENB) – Best for Passive Income
- 12. Southern California Gas Co. (SOCGP) – Best RNG Bargain
- 13. Waste Management (WM) – Best Waste Sector Choice
- Diversified RNG ETFs to Consider
- 1. Alps Clean Energy ETF (ACES) – Best for Clean Energy
- 2. Invesco Global Clean Energy ETF (PBD) – Best ETF for Global Solutions
- 3. VanEck Low Carbon Energy ETF (SMOG) – Best for Low Carbon
- 4. Vanguard ESG U.S. Stock ETF (ESGV) – Best ESG ETF
- What is Renewable Natural Gas?
- Different Types of RNG Collection
- Livestock operations
- Wastewater treatment plants
Our Methodology for Selecting the Best RNG Stocks
Choosing the best renewable natural gas (RNG) stocks to invest in isn’t as simple as picking ones that produce a healthy return on investment. Profits are important, but so is knowing that each investor has a unique personality and goals. With that in mind, we created a methodology with these considerations.
Volatility may not faze one investor, but it will give another an ulcer. Since risk tolerances can run the gamut, we included stocks with low betas, a sign of little volatility, as well as ones that are aimed at growth but may have some ups and downs.
Time in the Market
An investor may plan to buy and hold an RNG stock for decades, while another will plan to use their funds in the short term to start their retirement or send a child to college.
For this reason, we chose a variety of stocks, including riskier stocks that will grow over time and conservative and well-diversified options that would be safer closer to retirement.
Some investors want their money to make a statement as well as a profit. Those investors might balk at investing in a company known for fossil fuels even if that company is expanding into renewable natural gas.
Stocks vs. ETFs
Having a diversified portfolio has never been easier. Rather than buying shares of just one stock, investors can now buy shares in exchange-traded mutual funds that will expose them to multiple companies in one sector or across various sectors. We included a few exchange-traded funds with exposure to RNG companies.
Some investors seek a dividend yield for income or reinvestment to grow their portfolios. RNG stocks with solid yields are in our renewable natural gas roundup.
Wall Street analysts rated our selection of renewable natural gas stocks and ETFs. We focused on options rated “strong buy,” “buy,” and “hold,” giving you top options for portfolio additions related to RNG.
Our choices include stocks in energy, clean energy, utilities, and more.
See Related: Best Fossil Fuel-Free Funds for ESG Investing
Best Renewable Natural Gas Stocks
Many investors like green investments such as RNG because they seek to reduce carbon emissions and solve environmental problems.
RNG can power more than natural gas vehicles and electric plants. Stocks related to renewable natural gas can also power your investment profits.
Don’t think investing in renewable natural gas means you’ll have to buy shares of a volatile start-up stock that’ll take you on a rollercoaster ride.
As you consider these equities, note how these RNG options range from conservative to growth. Whatever your risk tolerance, there is likely to be a renewable natural gas stock to match it.
As with all investments, past performance does not predict the future. However, RNG stocks and exchange-traded funds are worth consideration. This selection includes options for investors with a variety of goals and risk tolerances.
1. EQT Corporation (EQT)
EQT Corporation, the largest natural gas producer in the United States, is considered an attractive renewable natural gas stock. This is due to its significant role in the conventional natural gas sector and its potential in the renewable energy market. Here are some of the pros and cons of investing in EQT Corporation:
- EQT Corporation is a major player among U.S. gas producers
- Focus on conventional natural gas indicates a solid foundation in an established energy sector
- The company faces stiff competition from other major gas producers venturing into the renewable energy market.
- Regulatory changes and environmental concerns
- The company’s success in renewable natural gas is still uncertain
See Related: Best ESG Target Date Funds
2. Ameresco Corp. (AMRC) – Best for Growth
Ameresco Corp. is one of the leading renewable energy companies in the U.S. With an eye toward low cost and energy efficiency, Ameresco is building renewable natural gas and landfill gas production facilities in America and the United Kingdom.
Ameresco is a growth option for investors with higher risk tolerances or those looking to profit over a more extended period.
- Higher profit potential over time
- U.S.-based company
- It could be a volatile investment.
3. Archaea Energy (LFG) – Best for Stability and Growth
One of the nation’s leading renewable natural gas companies, Archaea Energy, has a portfolio of sustainable RNG and landfill gas projects. Its focus is on selling RNG under long-term fixed-price contracts to credit-worthy partners. Rated a “strong buy”, Archaea Energy has growth potential and stability.
- Rated a “strong buy.”
- Focused only on renewable natural gas projects
- May not have the diversification of other clean energy companies.
See Related: Best Weapon-Free Funds to Invest In Today
4. Atlantica Sustainable Infrastructure (AY) – Best for Clean Energy Sector
Atlantica owns a diverse portfolio of renewable energy, storage, transmission lines, and water projects in North and South America. Atlantica Sustainable Infrastructure stock could expose investors to RNG and other climate change solutions.
- Includes a diverse selection of clean energy and water projects in North and South America
- Likely to profit from clean energy projects in the U.S.
- While Atlantica has diversified projects, ETFs may provide a more comprehensive selection.
See Related:Best Robotics Stocks to Buy Now
5. BP (BP) – Best for Buy and Hold
One of the world’s major oil producers, BP, is expanding into producing renewable natural gas from dairy farms through a partnership with Aria Energy. BP is an excellent option for buy-and-hold investors, plus its dividend yield is 4.4 percent.
- Already a major force in the energy sector.
- It delivers a strong dividend yield for passive income.
- Clean energy investors may not want what is still considered a fossil fuel stock.
6. Brightmark Energy (BMRK) – Best for Profit Potential
Brightmark Energy, founded in 2016, is focused on turning solid waste into sustainable fuel. Brightmark is a growth stock with a higher beta, but its quarterly revenue growth of more than 800 percent is higher than the sector average.
- Addressing solid waste and clean energy problems
- Healthy growth above the sector average
- It may be too volatile for conservative investors.
7. Cheniere Energy (LNG) – Best for LNG
As its ticker symbol implies, Cheniere Energy is a leading producer of liquefied natural gas. This Houston-based company is worth considering as a stock since renewable natural gas use needs LNG technology and distribution.
- A recognized leader in liquified natural gas and liquified RNG
- Rated a “hold.”
- Some may see LNG’s use of non-renewable natural gas as a negative
See Related: Best Renewable Energy Stocks
8. Chevron Corp. (CVX) – Best for Low Volatility
With a beta of 1.20, CVX is a renewable natural gas-related stock that would be an option for a value investor who doesn’t want the risk of growth stocks. Chevron is known for producing fossil fuels, but its partnership with Brightmark has it working to produce and market RNG from dairy farms.
- Low beta equals low volatility.
- Partnership with Brightmark boosting dairy-derived RNG
- CVX is still very much a fossil fuel company
9. Clean Energy Fuels Corp. (CLNE) – Best for U.S. Focus
This renewable energy company focuses on producing and distributing renewable natural gas as compressed natural gas (CNG) and liquified natural gas in the U.S. and Canada.
Clean Energy Fuels also designs, builds, and operates vehicle fleet customer stations, sells RNG manufacturing equipment and sells U.S. federal, state, and local environmental credits.
- CLNE looks to expand RNG use through customer stations across the U.S. and Canada
- Trades in environmental credits from selling RNG
- It may not be for the risk-averse investor.
10. Dominion Energy (D) – Best for the Long-Term
With a P/E ratio of 24.16 and a dividend yield of 3.28 percent, Dominion Energy is rated a “buy” by analysts.
Headquartered in Richmond, Virginia, Dominion provides electricity and natural gas to homes, businesses, and wholesale customers, making its interest in renewable natural gas a natural fit. With a beta of only 0.4, Dominion isn’t volatile, either.
- Low volatility
- Rated a “buy” by analysts
- Mostly an energy and natural gas company with an interest in RNG
See Related: Best Green Companies to Invest
11. Enbridge (ENB) – Best for Passive Income
Headquartered in Calgary, Alberta, Canada, Enbridge Partners is a multinational pipeline company expanding into the distribution of RNG. ENB has a notable dividend yield given it’s free cash flow profile during favorable natural gas prices.
- The highest dividend yield of stocks reviewed
- Outperforming the market
- It may not have a strong enough interest in RNG for activist investors.
12. Southern California Gas Co. (SOCGP) – Best RNG Bargain
A subsidiary of Sempra Energy, Los Angeles-based Southern California Gas is the state’s largest natural gas provider. The scale of SOCGP’s operations will make it a significant player in RNG in the future. SOCGP’s profitability is rising, but its stock price could make it a bargain.
- The scale of America’s most populous state makes SOCGP a major player in natural gas
- Regionally focused for diversification
- Southern California Gas Co. also provides conventional natural gas
See Related: Best EV Charging Station Stocks
13. Waste Management (WM) – Best Waste Sector Choice
Logically, renewable natural gas is tied to solid waste, so it makes sense that Waste Management would be interested in RNG production. Analysts recommend WM as a “buy” or a “strong buy” for this year.
- Recommended as a “buy” and “strong buy.”
- Working toward environmentally friendly solid waste solutions
- The P/E ratio is a little high, which could make a short-term profit difficult
Diversified RNG ETFs to Consider
1. Alps Clean Energy ETF (ACES) – Best for Clean Energy
This clean energy ETF offers exposure to U.S. and Canadian companies with a biogas focus and those working toward solutions using solar, hydropower, geothermal energy, and wind power, as well as energy efficiency.
ACES has rewarded its environmentally conscious investors with a three-year return of 38.95 percent.
- Broad clean energy exposure
- Healthy returns on investment
- The focus isn’t entirely on RNG.
2. Invesco Global Clean Energy ETF (PBD) – Best ETF for Global Solutions
Given the global push to address climate change, ETFs such as PBD can be good options for investing in clean energy technology. PBD has surpassed its three-year and five-year benchmarks, but bears say this fund has a high expense ratio.
- Beating its benchmarks for profits
- Diversification with a global mindset
- PBD has a high expense ratio
3. VanEck Low Carbon Energy ETF (SMOG) – Best for Low Carbon
Do the ticker symbols of some ETFs entertain anyone else? SMOG includes exposure to biofuel companies as well as other alternative fuels.
- ETF focuses on reducing carbon emissions
- Includes stocks related to other alternative clean fuels
- It owns stock in Tesla and Lucid, so it is interested in non-RNG vehicles.
For an investor who’s looking for broad exposure to Environmental, Social, and Governance (ESG), this exchange-traded fund includes environmentally conscious stocks from U.S.-based companies, including ones that produce and market RNG but with limited exposure.
- Low fees
- Price is low now, which could make it a bargain
- May not have the RNG focus some investors want
See Related: Best Vanguard ESG Funds
What is Renewable Natural Gas?
Renewable natural gas is pipeline-quality biogas that can be used interchangeably with conventional natural gas. Since biogas is a product of the natural decomposition of organic matter, RNG can come from landfills, livestock operations, anaerobic digestion, or thermochemically.
After the gas is collected, it’s processed to remove water, carbon dioxide, hydrogen sulfide, and other trace elements, leaving pure methane.
RNG can be converted into compressed natural gas (CNG) or liquefied natural gas (LNG), which can be used as a transportation fuel. The U.S. Renewable Fuel Standard lists RNG as an advanced biofuel and is considered a form of renewable energy.
Different Types of RNG Collection
RNG is collected from landfills – where the trash you set by the curb weekly goes – is known as landfill gas or LFG. Landfills are the third-largest source of human methane emissions in the U.S. Most LFG is used to produce electricity.
Biogas can also come from heating the manure associated with livestock operations. The RNG from this source tends to go towards powering natural gas vehicles.
Wastewater treatment plants
RNG can also originate from wastewater treatment plants. This energy could potentially produce up to 12 percent of America’s electricity.
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Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.
Hailing from a lineage of industrious Midwestern entrepreneurs and creatives, his business instincts are deeply ingrained. This background fuels his entrepreneurial spirit and underpins his commitment to responsible investment. As the Founder and Owner of The Impact Investor, Kyle fervently advocates for increased awareness of ethically invested funds, empowering individuals to make judicious investment decisions.
Striving to marry financial prudence with positive societal impact, Kyle imparts practical strategies for saving and investing, underlined by a robust ethos of conscientious capitalism. His ambition transcends personal gain, aiming instead to spark transformative global change through the power of responsible investment.
When not immersed in the world of finance, he’s continually captivated by the cultural richness of new cities, relishing the opportunity to learn from diverse societies. This passion for travel is eloquently documented on his site, ViaTravelers.com, where you can delve into his unique experiences via his author profile.