Hydrogen-powered cars and trucks have been a grail among alternative energy advocates for decades decades. There were hydrogen companies in the 1990s that were extolling the benefits of hydrogen over electric vehicles (EVs).
The trouble was, building a hydrogen-powered vehicle is complicated – that means it’s also expensive. Also, there’s no infrastructure for hydrogen vehicles. There are no hydrogen filling stations and you can’t fill one up at your house like an EV.
Plus, hydrogen is somewhat dangerous to store, so filling stations would need to have some safety standards. And no one is that familiar with hydrogen, so there’s a learning curve.
But technology has helped push hydrogen fuel cell vehicles (HFCVs) much further along in recent years. And the fuel cell technology has been used in other industries where some of the challenges for HFCVs don’t exist.
The 6 hydrogen stocks powering the next generation of travel here represent the companies that are pioneering the next big move in energy.
- Air Products & Chemicals (NYSE:APD)
- Bloom Energy (NYSE:BE)
- Ballard Power Systems (NASDAQ:BLDP)
- Cummins (NYSE:CMI)
- FuelCell Energy (NASDAQ:FCEL)
- Plug Power (NASDAQ:PLUG)
Air Products & Chemicals (APD)
No, it’s not the sexiest name. But it was established in 1940, when it was more common to name your company for what it did rather than capturing the zeitgeist. Plus, this is an industrial-facing company, so consumer appeal doesn’t really factor here.
And this company does just what it says on the label. APD makes and sells atmospheric gasses, such as carbon dioxide for carbonating soda and water. It sells oxygen gas to hospitals and first responders and liquid oxygen to NASA and refinery hydrogen. It has a technology for making liquified natural gas (LNG). You get the idea.
It has also expanded its operations to become a global presence, selling into 50 countries at this point.
Due to its lowkey business, APD is still reasonably priced compared to flashier tech-forward companies. The stock is up 32% in the past year and delivers a 1.8% dividend.
Bloom Energy (BE)
A decade ago, BE was featured in a 2010 60 Minutes segment that asked if it was an “energy breakthrough,” though the company was founded nearly a decade before that.
Then, it didn’t IPO until mid-2018. These cutting-edge technologies can have such long runways.
BE’s unique selling point is a fuel cell that allows its industrial-sized generators to run on natural gas, biogas or hydrogen without combustion. These units can also store energy and distribute AC or DC power.
What’s more, the entire system is scalable. Each unit delivers 200 to 300 kilowatts of power, and customers can add units as needed.
Given the challenges presented by our aging grid and the need in more industries for “always on” systems, back-up and uninterruptible power are no longer options, but competitive necessities.
BE is up 221% in the past year, 83% year to date. The wildfires in California have stoked interest but this uptrend is growing, not subsiding.
Ballard Power Systems (BLDP)
The fundamental technology that makes hydrogen power work is what’s called a proton exchange membrane (PEM), which utilizes hydrogen and oxygen in an electrochemical reaction.
This PEM has been the greatest challenge for the hydrogen industry. If you can’t build a motor, the rest of the associated challenges are moot. BLDP specializes in the building the motors and then sells them to other companies looking to put them in their products.
Again, the challenge is managing a “chicken and egg” dilemma. You can’t create demand for hydrogen without supply, but you can’t create supply without demand.
BLDP has been tactical in its approach to this quandary, and found markets that generate solid income so that it can reach for bigger markets while establishing its name.
This Canadian firm has been waiting for the hydrogen heyday for decades and it’s now in the spotlight, with strategic deals in Europe and China with auto manufacturers.
The stock is up 174% in the past year, 120% coming year to date. If hydrogen has a big break, BLDP will be one of the key winners.
When you think of heavy-duty engines, Cummins is a name that comes to most people’s minds right away. CMI has been around for 101 years and continues to build its reputation for reliable, quality engines that drive economies around the world.
And these days, CMI isn’t just about heavy-duty diesel engines. CMI has begun developing electric and even hydrogen power systems.
In fact, the company has been working in hydrogen development for two decades. Last year CMI expanded its move in this direction with the acquisition of Canada-based Hydrogenics, a leading hydrogen fuel cell company.
Since CMI is a more indirect play on this sector than other stocks here, and given that it’s a far more established corporate player with a hefty $32 billion market cap, this stock won’t be scoring massive gains.
But it’s up 22% in the past 12 months and still delivers a steady 2.4% dividend. This is a good choice for long-term players in both the current and future transportation sector.
Fuel Cell Energy (FCEL)
This company is a next-generation distributed power generation company that uses a proprietary molten-carbonate fuel cell technology.
FCEL is unique in its division that actually generates and distributes clean-energy hydrogen. While fuel cells will have a robust market moving forward, one piece of the hydrogen puzzle that still needs solving is finding a way to generate and distribute hydrogen to fueling stations.
Companies that establish themselves in this market and grow their distribution systems from here will be the big oil companies of the future.
FCEL is up a whopping 447% in the past 12 months, but it’s actually down 11% year to date. This may be a small company but has been around since 1969, so it has a solid underlying business.
Plug Power (PLUG)
Hydrogen has become the investment equivalent of fiberoptic when it comes to the alternative energy boom. During the dotcom run, fiber optics was a cutting edge technology that was going to transform society.
And it did. Just a little bit later than proponents expected.
We’ll see how things play out for hydrogen. But we’re also in a much different place when it comes to our ability to adopt and commercialize new technologies when compared to two decades ago.
PLUG specializes in converting battery-powered equipment to hydrogen-generated fuel sources. And it has a proven model of integration. In warehouses, PLUG can power big forklifts and other equipment, and also provides power stations for filling the machines up. Scaling that up could prove to be a very powerful skill.
The stock is up 575% in the past year, 469% year to date. And its managing this windfall of capital wisely.
On the date of publication, Louis Navellier has a long position in PLUG in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.