Shares of solar power stock SunPower (NASDAQ: SPWR) are up a strong 9% in afternoon trading here at the 2:40 p.m. minute mark, EDT, after the company announced a planned partnership between its Maxeon Solar Technologies subsidiary and solar power microinverter manufacturer Enphase Energy (NASDAQ: ENPH).
In today's announcement, SunPower said that Maxeon -- its solar panel manufacturing subsidiary that will be spun off later this quarter --will partner with Enphase to develop a new Enphase Energized Maxeon AC Module.
Incorporating both companies' names, the new module will incorporate both "a factory-integrated seventh-generation Enphase IQ microinverter" (which converts direct current generated from the solar modules solar panels into usable alternating current) and solar panels manufactured by Maxeon.
Maxeon will be responsible for commercializing and selling the new module to residential solar rooftop customers "through authorized installer networks and distributors." The new module is scheduled to go on sale in the fourth quarter of 2020 after Maxeon has officially spun off from SunPower Corporation.
The subsidiary that will become Maxeon, incidentally, is the more profitable of SunPower's two major business groups, generating about 94% of the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) despite accounting for less than half of SunPower's annual sales, according to data from S&P Global Market Intelligence. Judging from investors' reaction to today's news, this new deal is expected to make Maxeon even more profitable in the quarters and years to come.
10 stocks we like better than SunPower
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and SunPower wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 2, 2020
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.