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What exactly are hydrogen stocks?
Hydrogen stocks are issued by companies that engage in the endeavour of producing clean energy. I will not bore you to death with the science behind it. However, it basically involves producing energy from the reaction between hydrogen and oxygen.
In terms of energy, hydrogen is a diverse energy carrier with applications spanning from industrial operations to transportation. Such occurrence gives rise to the “hydrogen economy” concept. It espouses the use of hydrogen energy for most economic activities.
Several governments and areas have recognised the potential of hydrogen energy and the hydrogen economy. For example:
- The United States and the European Union are at the forefront of hydrogen policy efforts.
- China is a prominent player in hydrogen deployment, having recently increased its electrolyser capacity significantly.
- The European Union has established renewable hydrogen guidelines and is sponsoring hydrogen-related projects.
- India has established the National Green Hydrogen Mission to produce 5 million tonnes of hydrogen by 2030.
- The United Kingdom is also making gains in this area by implementing a Low-Carbon Hydrogen Standard and an Electrolytic Allocation Round.
- Other countries, such as Namibia and South Africa, have implemented hydrogen plans.
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Factors that Drive Hydrogen Stocks
As the promise of hydrogen as a clean energy source becomes clear, hydrogen stocks are gaining traction in the global market.
The value of hydrogen stocks is determined by the energy itself and the ecology surrounding its production, delivery, and utilisation. The International Energy Agency (IEA) claims hydrogen’s historic importance in the energy landscape, emphasising its energy density and emission-free characteristics.
As a result, when investors seek green hydrogen stocks, they seek companies that are part of the clean transformation.
Currently, the industry drives a substantial percentage of hydrogen demand, which, ironically, results in CO2 emissions, given that natural gas is the dominant hydrogen source.
As a result, there is an increasing interest in renewable electrolytic hydrogen, in which renewable energy sources such as the sun and wind can make hydrogen production competitive. These stocks are often called green hydrogen stocks.
Investors should keep technical advancement and the increasing demand for clean energy when considering which hydrogen stocks to buy.
Technological Advancement
In recent years, hydrogen technology has shifted its paradigm, emphasising low-emission alternatives.
As mentioned, there are two main methods of producing hydrogen energy: “Blue hydrogen” and “Green hydrogen.”
While the former is obtained from natural gas and necessitates carbon capture technology, the latter is created using electrolysis and produces no emissions.
This green hydrogen approach has enormous potential in the rapidly changing energy market. Therefore, if you are concerned with environmental impact, you should look for green hydrogen stocks.
Another indicator of the hydrogen sector’s technological improvement is the increased interest from major corporations and investors.
Despite ongoing hurdles in technology implementation, Europe has demonstrated leadership, particularly in patents related to hydrogen generation, storage, and delivery.
Meanwhile, initiatives such as the EU’s RepowerEU programme, which aims for significant hydrogen production by 2030, demonstrate the push for green hydrogen.
Demand for Clean Energy
The global demand for renewable energy, particularly hydrogen, is increasing significantly.
Moreover, clean hydrogen is expected to be in high demand, giving green hydrogen stocks great prospects.
In speculation, clean hydrogen consumption will reach 10 million metric tonnes (MMT) by 2030, with a future growth of 50 MMT by 2050. Thus, you can expect the hydrogen market’s value to achieve trillion to trillion. To meet these net-zero emission targets by 2030, sustainable energy investments will need to treble at the current rate.
We are at the precipice of transitioning into more widespread use of clean energy. It presents a golden opportunity to invest in green hydrogen stocks.
After researching, these are a few recommended hydrogen stocks to buy.
Top 5 Hydrogen Stocks in 2024 You Shouldn’t Overlook
The top 5 hydrogen stocks in 2024 that investors shouldn’t overlook are:
1. Air Products (NYSE:APD)
Air Products is a major actor in the hydrogen business, specialising in hydrogen generation and distribution. They create both liquid and compressed hydrogen gases. The corporation has a long-term vision and pays dividends to stockholders.
2. Bloom Energy (NYSE:BE)
Bloom Energy is making strides in sustainable energy and electrolysers. They prioritise clean and economical energy by producing efficient hydrogen with their Bloom Energy Server and Electrolyzer, which serves diverse sectors and the integration of renewables.
3. Linde plc (NYSE:LIN)
Linde is a key player in the industrial gas market, with a sizable stake in the hydrogen industry. The company is dedicated to hydrogen compression, refuelling, and lowering emissions. They spent billion on clean energy to build a large-scale blue ammonia facility. They also have a large valuation and manage global hydrogen manufacturing units.
4. Cummins (NYSE:CMI)
Cummins, headquartered in Indianapolis, is known for its foray into pollution solutions under the “Accelera” name. This trademark covers battery electric and hydrogen fuel cell systems, battery systems, fuel cells, ePowertrain systems, and electrolysers for zero-emission solutions. They also offer a bullish analyst forecast for the stock.
5. Plug Power (NASDAQ: PLUG)
Plug Power is a hydrogen fuel cell pioneer at the forefront of the industry. They have large green hydrogen network deployments and plans in North America and Europe. Their goal is ambitious: 2,000 tonnes per day by 2030.
I have compiled a list of three major financial indicators for the 5 hydrogen stocks in the table. However, as stocks are volatile, make sure you keep updated on the financial performance of each of the 5 hydrogen stocks.
| Company | P/E ratio | Market cap (US Dollars) | Return on equity |
| Air Products (NYSE:APD) | 29.00 | 63.34B | 16% |
| Bloom Energy (NYSE:BE) | -8.74 | 3.10B | -143% |
| Linde plc (NYSE:LIN) | 42.15 | 185.12B | 11% |
| Cummins (NYSE:CMI) | 13.03 | 32.94B | 26.6% |
| Plug Power (NASDAQ: PLUG) | -7.61 | 5.34B | -21% |
1. Air Products (NYSE:APD)
Company Info
Founded in 1949, Air Products and Chemicals Inc has since become the major supplier of industrial gases and related equipment. Most of its clients are from the electronics and food industries.
New Innovations
Air Products has a long history of invention, entrepreneurship, and customer relationships, contributing significantly to common things such as frozen meals, electronics, and medical imaging.
They have major agreements, such as delivering LNG technology to the Rio Grande LNG Project, a substantial hydrogen supply collaboration with AFC Energy, and a crucial role in hydrogen technology for Edmonton International Airport.
A significant commitment to blue and green hydrogen mega projects worth more than billion by 2027 aims to accelerate the energy transition and promote human progress.
General Financial Background
Air Products generated a total of billion in revenue in the fiscal year 2022 with a net profit margin of -12.6%.
Despite obstacles, the company exceeded its financial targets in 2022, owing to the dedication of its employees and a growth plan that prioritises sustainability.
2. Bloom Energy (NYSE:BE)
Company Info
Bloom Energy is set to become a renewable energy company specialising in using solid oxide fuel cell technology to generate power, notably electricity and hydrogen.
Since 2001, they have developed specialities in biogas energy, hydrogen fuel cells, microgrids, heat and carbon capture, and maritime fuel cells.
New Innovations
Bloom Energy debuted the Combined Heat and Power system and the Series 10 net-zero compliance solution in 2024.
General Financial Background
Its 2022 revenue was 1.2 billion with a 23.3% yearly rise. Besides, it made a revenue of billion in the previous twelve months.
In terms of its profitability, there is an 8.6% drop in net profit margin. For the TTM period, net income was a loss of – million.
3. Linde plc (NYSE:LIN)
Company Info
Linde is the world’s largest industrial gas corporation and a notable technological innovator in the industrial gasses market. It is domiciled in Ireland and headquartered in the United Kingdom.
It is a merging between Linde AG of Germany (established in 1879) and Praxair (founded in 1907 as Linde Air Products Company) of the United States in 2018.
New Innovations
Linde was awarded over billion in new projects for electronics clients worldwide in 2021. This comprises important agreements with a variety of entities.
Moreover, Linde’s research and development efforts focus on developing new and improved technologies for producing and distributing industrial gases.
General Financial Background
In 2022, the company achieved full-year sales of billion. After factoring in the currency effects, such sales indicate a 13% increase.
The company has an operating profit of billion and an adjusted EPS of . These numbers indicate 12% and 15% growth rates, respectively.
In the fourth quarter of 2022, the company made sales of billion, a 5% decrease year on year (YoY). However, when excluding the currency effects, it shows an increase of 1%.
The fourth-quarter operational profit in 2022 was billion (or billion adjusted), up 9% from the previous quarter. EPS was throughout this period, showing a 35% gain.
4. Cummins (NYSE:CMI)
Company Info
With its headquarter in Indiana, Cummins Inc. establishes itself as one of the global leaders in the power solutions and technology industry.
Since its establishment in 1919, it focuses on diesel and natural gas engines, electric and hybrid powertrains, and other related technologies.
New Innovations
Cummins highlighted its decarbonisation approach, focusing on its “Destination Zero” goal for reducing carbon emissions. As a result, the business debuted fuel-independent powertrain platforms.
Under their New Power division, there was a focus on expanding their green hydrogen activities. They also increased electrolyser sales and advanced in battery demand.
General Financial Background
Cummins announced billion in revenue for fiscal year 2022. Its net income in 2022 was billion, or per diluted share.
It generated billion in revenue. After removing Meritor’s contribution (a firm acquired by Cummins), the revenue decreased to &6.6 billion, which is still a 13% increase year on year.
Moreover, the company has made million in its net income for the fourth quarter of 2022.
5. Plug Power (NASDAQ: PLUG)
Company Info
Plug Power Inc. offers turnkey hydrogen fuel cell solutions. The Company provides electrolysers that enable companies such as refineries, chemical, steel, fertiliser, and commercial refuelling stations to manufacture hydrogen on-site.
New Innovations
In the first quarter of 2024, Plug Power announced a record in electrolyser stack platform manufacture.
Also, its revolutionary technology powers electric motors with hydrogen fuel cells amid a continuing paradigm shift in the power, energy, and transportation industries to address climate change and energy security while increasing efficiency and satisfying sustainability goals.
General Financial Background
Plug Power’s revenue in 2022 was billion, a 39.63% rise year over year. It also recorded million in annual revenue in 2021, a 638.78% decline from 2020.
The yearly gross profit for Plug Power in 2022 was – million, a 13% increase from 2021, which was – million.
Concerning its recent performance, Plug Power reported revenue of million in the fourth quarter of 2022, compared to M for the same quarter of 2021.
Conclusion
There may be many considerations when it comes to investment. You will have to equip yourself with knowledge of different types of stocks and how to analyze a company’s financial statement.
For many investors, money precedes everything. While such a practice is ubiquitous among many investors, some do invest in a better future. In this case, it will be green hydrogen stocks.