This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

A $10 Billion Opportunity in Batteries

NEW YORK ( TheStreet) -- There's a $10 billion-a-year opportunity in front of a small collection of companies you probably think of as laggards in your portfolio.

Most of the companies are European. They're the suppliers of equipment to the nation's power grid, and the $10 billion opportunity is in the area of grid storage.

Thanks to renewable energy, the demands of modern computers and a little-known order known as FERC Order 890, demand for storing power on the nation's electric grid -- a $200 million market last year -- should be a $10.4 billion market in 2018, according to Lux Research of Boston.

Senior analyst Steve Minnihan told me the industry's system integrators, including ABB (ABB), General Electric (GE), Siemens (SI) and Schneider Electric, will take the bulk of this market, gradually evolving from custom-engineered installations to standardized systems delivered via containers and installed where needed.

"It's just what we saw with the UPS (uninterruptible power supply) market," he said, "and will take five to seven years to develop." The only thing that could forestall this, he added, is if one of these suppliers loses patience and decides to withdraw from the market, as Siemens withdrew from the solar inverter space.


This is a market sweet spot, as I wrote last month . The FERC order provides incentives to meet the demand, utilities are buying wind and solar plants that require more storage and cloud data centers are demanding more reliable, stable power supplies.

Of the four companies mentioned above, it's ABB that looks like the best investment. It is heavily leveraged toward the utility space, it delivers a range of storage technologies and it discusses power first in descriptions of the business.

Over the last 12 months the shares are up 37%, but still offer a solid dividend and yield 3.18%. That dividend has been rising steadily over the last few years, from 44 cents a share per quarter to the current 70 cents. A European regulation similar to FERC 890 could send this stock into overdrive.

Schneider Electric, whose shares are traded only in Europe, is based in France and is also focused on energy management. Its specialty, however, is low-voltage equipment like circuit breakers and switches, and the company is in the process of refinancing its debt, writes Business Week.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $123.58 -0.53%
FB $83.11 0.12%
GOOG $548.97 -1.10%
TSLA $183.90 -3.40%
YHOO $45.07 1.30%

Markets

DOW 17,687.24 +9.01 0.05%
S&P 500 2,059.10 +2.95 0.14%
NASDAQ 4,875.52 +12.1580 0.25%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs