- Hydrogen stocks are a great ESG investment to make for a greener future.
- Air Products (NYSE:APD): Largest hydrogen gas supplier with industry-leading net earnings margins.
- Plug Power (NASDAQ:PLUG): Anticipates an 80% revenue growth in 2022, and new revenue lines could open up in the aerospace vertical.
- Bloom Energy (NYSE:BE): Could break into a $1 billion dollar sales run rate in 2022, and see phenomenal growth next year.
In a Green Hydrogen Report published in 2020, global investment banking giant Goldman Sachs (NYSE:GS) forecasts a 10 trillion Euro ($10.7 trillion) global green hydrogen market by 2050 “for the Utilities industry alone.” Investors who take positions on hydrogen stocks now could secure significant capital gains as the world attempts to create a carbon-free, green and clean future. The contributing analysts to Goldman Sachs’s report proclaimed the growing total addressable market as a “once-in-a-generation opportunity” for long-term-oriented investors.
It is not just Goldman Sachs that sees surging demand for hydrogen. Analysts at Facts & Factors project a strong 55.2% compound annual growth rate in the green hydrogen market between 2022 and 2028.
Investing in hydrogen stocks could be rewarding, even after stalled progress in President Biden’s Build Back Better (BBB) plan. The BBB plan had proposed the provision of tax credits for hydrogen production.
Most noteworthy, hydrogen has an energy content per kilogram that is nearly 2.5 times greater than that of carbon “dirty” fossil fuels and it boasts 120 to 300 times the energy density of conventional lithium-ion batteries powering electric vehicles today.
It’s only the cost of producing green hydrogen that has been exorbitant, but those costs are coming down significantly as companies innovate and bring new, efficient, and low-cost technologies to produce and distribute green hydrogen fuel to power a cleaner future.
Here are three great hydrogen stocks to consider:
|APD||Air products and Chemicals, Inc.||$236.51|
|PLUG||Plug Power Inc.||$20.87|
|BE||Bloom Energy Corporation||$18.86|
Hydrogen Stocks to Buy: Air Products and Chemicals (APD)
Industrial gases giant Air Products (NYSE:APD) is the largest supplier of hydrogen gas to world markets with 60 years of hydrogen production experience under its belt. The company’s current $30 billion 10-year capital investment plan includes mega hydrogen production plants that will extend its global market lead while earning APD stock investors good profits by 2027.
A recently announced Arizona hydrogen project could start producing about 10 metric tons per day by 2023 and increase the company’s clout in the California market. However, the project pales in comparison to another upcoming carbon-free hydrogen project in Saudi Arabia that could produce 650 tons of gas per day to supply the global market.
Investors in APD stock will own shares in a growing gas production business with multiple industrial gas growth frontiers. Air Products’ net profit margin of 19.9% in 2021 was far better than a comparable industry average margin of 9.1% last year. APD pays a 2.72% yielding quarterly dividend, which it has religiously increased for 40 years.
Wall Street analysts forecast a 13% growth in APD’s earnings per share next year.
Plug Power (PLUG)
A global pioneer in hydrogen fuel cell production, Plug Power (NASDAQ:PLUG) boasts more than 52,000 fuel cell systems deployed globally, with many more in the pipeline. The company is building out a green hydrogen power generation network in North America and expanding its global reach.
PLUG stock has delivered over 780% in capital gains over the past three years. However, the most recent twelve months haven’t been as great; shares lost almost 18% of their value.
Most noteworthy is Plug Power’s strategic partnership with Airbus (OTCMKTS:EADSY), involving hydrogen-powered planes and airports that could unlock a new revenue line sooner than what the Street had anticipated. Fellow InvestorPlace contributor Larry Ramer believes this could be as soon as 2024.
Plug Power reported record revenues of $502 million for 2021. The company targets reporting $900 million to $925 million in sales for 2022 – a strong 80% growth year-over-year. Several hydrogen plants under construction could begin production in 2022.
There is sufficient potential for Plug Power stock to rise if the company follows through on its ambitious targets for 2022.
Hydrogen Stocks to Buy: Bloom Energy Corporation (BE)
Bloom Energy Corporation (NYSE:BE) offers a power generation platform that converts hydrogen — or biogas or natural gas — into electricity through an electromechanical process without combustion. The company sells these systems and installs them at customer premises for an uninterrupted power supply to earn recurring cash flows.
Investors intending to buy hydrogen stocks should consider Bloom Energy, a power company that is going through a strong revenue growth phase.
BE could break into a billion-dollar annual revenue run-rate this year. Wall Street analysts project $1.13 billion in sales for 2022, or 16% sequential annual revenue growth, and forecast revenue of $1.5 billion in 2023. They expect strong revenue growth to pull BE’s normalized net income into the positive by the end of 2023.
What’s more, Bloom Energy unveiled a new and advanced product in 2021, the Bloom Electrolyzer, that could produce hydrogen 15% to 45% “more [efficiently] than any other product on the market today.” The new offering should start shipping this year to boost sales and cash flow generation.
BE stock is down 15% so far this year, which compares better to an industry average return of negative 19% year-to-date.
On the date of publication, Brian Paradza did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.