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03 April
2023
By Ian
Cooper, InvestorPlace Contributor
7
Hydrogen Stocks Sitting in the Sweet Spot
Goldman Sachs analysts say the market for hydrogen
production could reach $1 trillion
-
Defiance Next Gen H2 ETF (HDRO):
Diversify your portfolio at a low cost.
-
Direxion Hydrogen ETF (HJEN):
Another strong ETF to trade the hydrogen story.
-
Global
X Hydrogen ETF (HYDR):
A third ETF to trade the hydrogen boom.
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Continue reading for the
complete list of hydrogen stocks to buy!
![](images/images_04_05_2023/shutterstock_1784814938-scaled-e1679427565167-768x372%20copy.jpg)
image:shutterstock
Hydrogen could be one of the most explosive opportunities. After all,
it emits no greenhouse gas, and the only waste product is vapor. And
it could create a multi-trillion-dollar opportunity for long-term
hydrogen investors. Even better, Goldman
Sachs,
for example, says the market for hydrogen production could reach $1
trillion by 2050. To reach net-zero emissions, the firm says about $5
trillion will need to be invested in the hydrogen supply chain. Along
the way, it could lead to a massive opportunity for some of the top hydrogen
stocks to
buy.
With the Inflation Reduction Act, the U.S. is set to be “positioned to
be one of the lowest green hydrogen production cost regions in the
world, at $0.5 to $1.5 per kg of green hydrogen, which is going to
substantially boost the demand in the U.S., potentially growing to ~30
MTPA by 2030 to 35, setting a precedent for other countries to
follow,” as noted by EY.com.
In
addition, according to the International
Energy Agency,
global hydrogen demand will need to double from about 94Mt in 2021 to
more than 180 by 2030. Europe may need to see a six-fold increase in
demand by 2050. So, it’s no surprise that some analysts foresee a
multi-trillion-dollar hydrogen opportunity.
That being said, it’s a good idea to load up on hydrogen
stocks for the long term.
Data last updated: April 5, 2023 2:10 PM EDT
HDRO |
ETF Series Defiance Next Gen H2 ETF |
$9.24 |
HJEN |
Direxion Hydrogen ETF |
$13.95 |
HYDR |
GX Hydrogen ETF |
$10.13 |
APD |
Air Products & Chemicals |
$284.90 |
LIN |
Linde Plc |
$354.68 |
BE |
Bloom Energy Corp Cl A |
$17.92 |
PLUG |
Plug Power Inc |
$9.75 |
Hydrogen Stocks to Buy: Defiance Next Gen H2 ETF (HDRO)
One of the best ways to diversify with top
hydrogen stocks to buy is with an ETF, such as the oversold Defiance
Next Gen H2 ETF (NYSEARCA:HDRO)
– which currently sits at strong support.
Not only does this ETF offer a good deal of
exposure to hydrogen stocks, but it does
so at an impressively lower cost. For
example,
the HDRO ETF, which has an expense ratio of 0.30%, trades at around
$10 a share. With this ETF, investors gain
exposure to stocks such as Plug
Power (NASDAQ:PLUG), Bloom
Energy (NYSE:BE), Ballard
Power (NASDAQ:BLDP), Fuel
Cell Energy (NASDAQ:FCEL),
and dozens more.
To be included in this ETF, a company must
generate 50% of its revenue from hydrogen and/or a fuel cell project,
or be involved in developing fuel cells or hydrogen sources, according
to Defiance
ETFs.
Source: Audio und werbung / Shutterstock
Hydrogen Stocks to Buy: Direxion Hydrogen ETF (HJEN)
Another one of the top hydrogen stocks to buy is
the Direxion
Hydrogen ETF (NYSEARCA:HJEN).
Not only does it give investors exposure to top hydrogen stocks, but
it also does so at below $15 per share.
With an expense ratio of
0.45%,
this ETF holds 30 companies that are in the following sectors:
Hydrogen production and generation, storage and supply,
fuel cells and battery, and systems and solutions.
Some of the ETF’s top holdings include Plug
Power, Bloom Energy, Ballard Power, Air
Products & Chemicals (NASDAQ:APD),
and Doosan
Fuel Cell Co.
Plus, after a recent pullback with the broader
market, the ETF appears to have caught strong support around $13.75.
From here, I’d like to see it run back to $15.50 initially.
Source: petrmalinak / Shutterstock
Hydrogen Stocks to Buy: Global X Hydrogen ETF (HYDR)
Let’s toss in one more ETF for good measure.
After all, I’m a big fan of ETFs, especially when it comes to a sector
as potentially explosive as hydrogen.
With
an expense ratio of 0.50%, the Global
X Hydrogen ETF (NASDAQ:HYDR)
is also excessively oversold at the moment and is
another solid fit among top hydrogen stocks to
buy.
This one, in particular, invests in companies
involved in hydrogen production; the integration of hydrogen into
energy systems; and the development/manufacturing of hydrogen fuel
cells and electrolyzers, including Bloom Energy, Plug Power, Ballard
Power, and Ceres
Power (OTCMKTS:CPWHF).
Source: Audio und werbung / Shutterstock
Air Products & Chemicals (APD)
Air Products & Chemicals is another one of the
top hydrogen stocks to buy. The company owns and operates more than
100 hydrogen plants around the world. It’s also involved in more than
250 hydrogen-fueling projects all over the world. Most recently, it
announced plans, in partnership with AES,
to invest $4 billion in its first huge green hydrogen facility, which
will be located in Texas.
It
also just received over $130 million in NASA contracts to provide
liquid hydrogen for several NASA locations.
Even better, the company increased its quarterly
dividend from $1.62 to $1.75 per share—representing an 8%
increase. This marks the 41st consecutive year that Air Products has
increased its dividend payment. The dividend is payable on May 8,
2023, to shareholders of record at the close of business on April 3,
2023.
Source: Andy Borysowski / Shutterstock.com
Linde (LIN)
Another hot trade on the hydrogen boom is Linde (NYSE:LIN).
Its Niagara Falls plant, scheduled to open in 2025, will use
carbon-free hydroelectric power to make hydrogen. In fact, according
to Barron’s,
“Hydrogen now represents less than 10% of Linde’s sales,
but analysts see it growing in importance as the
company invests in projects worth tens of billions of dollars.”
The company also said it was allocated $33
billion to clean energy investments, most
of which will be hydrogen-related.
Plus, BMO
Capital Markets says investors should use any weakness in LIN as a
buying opportunity. They also see “upside
potential beyond our $370 target price.”
Earnings have been just as impressive. For 2022,
it posted an adjusted operating profit of $7.9 billion, up 10% year
over year. Income jumped 11% to $6.2 billion, with sales up 8% to
$33.3 billion. It also believes it’s on track for a record year in
2023.
Source: nitpicker / Shutterstock.com
Bloom Energy (BE)
Another top
hydrogen stock is Bloom Energy, which manufactures solid oxide
fuel cells. Bloom’s fuel cells are being used by retailers, healthcare
centers, and auto manufacturers.
Earnings
have
been strong. While its fourth-quarter net loss widened to $47.17
million, or 23 cents a share, from a loss of $33.32 million, or 19
cents a share, year over year, its adjusted was 27 cents, which was
ahead of estimates for nine cents. Revenue jumped to $462.5 million
from $342.4 million, year over year. That was also ahead of
expectations for $398.7 million. Looking ahead, Bloom Energy said it
expects 2023 revenue of $1.4 billion to $1.5 billion, as compared to
analyst expectations for $1.48 billion.
Source: Sundry Photography / Shutterstock
Plug Power (PLUG)
Plug Power, like many of its peers, was beaten up over the last year.
However, as the hydrogen market explodes, this is one of the top
stocks to own – especially with its current deals with Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN), Home
Depot (NYSE:HD), Nike (NYSE:NKE), Boeing (NYSE:BA),
and FedEx (NYSE:FDX),to
name a few.
Plug also announced it expanded its GenKey offering to enable fuel
cell adoption for warehouses that operate less than 100 electric
forklifts. “For the first time, this segment of the forklift market,
representing more than 25% of all forklifts sold in the U.S., will
have access to cost-effective hydrogen fuel cells and the increased
productivity they unlock,” says
the release.
It
also announced the historic
flight of
a regional airliner powered by the company’s line of ProGen fuel
cells. The plug also popped on news that Nikola
and Chart Industries announced
an agreement regarding hydrogen storage. That was beneficial to
Plug because it suggests the hydrogen market is gaining momentum.
On
the date of publication, Ian Cooper did not have (either directly or
indirectly) any positions in the securities mentioned. The opinions
expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing
Guidelines.
Ian Cooper, a contributor to
InvestorPlace.com, has been analyzing stocks and options for
web-based advisories since 1999.
Source: Postmodern Studio / Shutterstock
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