The renewable energy industry holds immense growth potential over the long term as the world moves toward a zero-carbon society. Daqo New Energy (NYSE:DQ), and JinkoSolar (NYSE:JKS) are two Chinese companies that should benefit from the rising demand. But which of these two stocks is a better buy now? Read more to find out.Daqo New Energy Corp. (DQ), in Chongqing, China, develops and sells polysilicon to photovoltaic product manufactures. It offers ready-to-use polysilicon and is packaged to meet crucible stacking, pulling, and solidification products. In comparison, JinkoSolar Holding Co., Ltd. (JKS), which is based in Shangrao, China, designs, develops, produces, and markets photovoltaic products. The company offers solar modules, silicon wafers, solar cells, recovered silicon materials, and silicon ingots.
The increasing frequency of droughts, a record number of wildfires, and floods have led governments worldwide to take aggressive steps to transition their countries to renewable-energy-based societies. While producing energy from renewable sources is still expensive, solar and wind energy costs have declined considerably over the past few years. Furthermore, China has emerged as a global leader in renewable energy and is currently the world’s most significant wind and solar power producer and the largest domestic and outbound investor in renewable energy. According to a Facts & Factors report, the global renewable energy market is expected to grow at an 8%-plus CAGR between 2021 - 2026. Therefore, both DQ and JKS should benefit.
JKS’ shares have gained 26% in price over the past three months, while DQ has returned 6.5%. However, DQ’s 1.1% gains year-to-date are higher than JKS’ negative returns. Furthermore, DQ is the clear winner with 28.2% gains versus JKS’ negative returns regarding their past year's performance.