Our topic for today is hydrogen stocks are the trading vehicles for companies that produce, use, transfer, or market hydrogen as a source of energy.
According to the Department of Energy, “Hydrogen can be produced from diverse, domestic resources. Currently, most hydrogen is produced from fossil fuels, specifically natural gas. Electricity…is also currently used to produce hydrogen. In the longer term, solar energy and biomass can be used more directly to generate hydrogen.”
We mostly rely on “grey hydrogen,” which is produced from natural gas. On the other hand, when Wall Street refers to green hydrogen, it means that the hydrogen has been produced on a carbon-neutral manner.
More nations have been committing to achieve net zero emission levels by 2050, but analysts suggest the pace is not fast enough. According to the International Energy Agency (IEA), yearly spending should triple to $4 trillion dollars by 2030, in order to achieve net zero by 2050 goal.
Therefore, hydrogen is a potential green alternative to conventional fuels. Recent metrics suggest by 2030, the global green hydrogen market could approach $90 billion.
As a result, the Street is paying close attention to players in the green energy space. With that information here are five hydrogen stocks and exchange traded funds to buy in June.
|BLDP||Ballard Power Systems Inc.||$6.25|
|BE||Bloom Energy Corporation||$16.64|
|HDRO||Defiance Next Gen H2 ETF||$11.10|
|HYDR||Global X Hydrogen ETF||$12.19|
|PLUG||Plug Power Inc.||$15.22|
Hydrogen Stocks: Ballard Power Systems (BLDP)
Canadian Ballard Power Systems (NASDAQ:BLDP) is a proton exchange membrane (PEM) fuel cell company. It focuses on fuel cells for heavy duty vehicle manufacturers, including Van Hool, Mahle, and Eldorado National. From trucks to buses, trains and ships, its modules are part of zero-emission mobility.
BLDP announced Q1 results on May 9. Revenue came in at $21 million, up 19% from a year ago. Losses per share were 14 cents, compared to a loss of 6 cents per share a year ago. The power play ended the quarter with $1.1 billion of cash reserves.
For its marine fuel cell module FCwave, Ballard received Europe’s industry first Type Approval by DNV, a certification body. Analysts concur that for marine applications, this certification is an important step in commercializing the company’s fuel cell technology.
Moreover, Ballard announced a partnership with Wisdom (Fujian) Motor Company. The duo will work on the adoption of commercial fuel cell electric vehicles in Hong Kong.
Despite these developments, BLDP stock is down over 52% year-to-date. Shares are changing hands at 20.9x sales. Meanwhile, the 12-month price forecast for BLDP stands at $9.12.
Bloom Energy (BE)
Fuel cell maker Bloom Energy’s (NYSE:BE) leading solid oxide fuel cell is being hailed as an important clean energy platform.
On May 5, BE released Q1 results. Revenue reached $201 million compared to $194 million for Q1 last year. However, the loss per share grew from 15 cents to 44 cents. The company had $493.9 million cash at hand.
Bloom Energy is planning to add 1 gigawatt to its capacity by 2023. Lately, LSB Industries (NYSE:LXU), which produces industrial and agricultural chemicals, has agreed to install 10 megawatts of BE solid oxide platform to generate hydrogen.
BE stock has lost 22% so far in 2022. Shares are trading at 3.3x sales. In the meantime, the 12-month price forecast for BE stands at $26.
Defiance Next Gen H2 ETF (HDRO)
The Defiance Next Gen H2 ETF (NYSEARCA:HDRO) tracks the performance of globally listed equities mainly in the hydrogen sector. In terms of sectoral allocations, we see hydrogen fuel cells (59.50%), hydrogen tech and fueling stations (26.2%), and hydrogen production (14.3%)
HDRO tracks the BlueStar Global Hydrogen & Next Gen Fuel Cell Index and currently holds 27 stocks. The fund was first listed in March 2021 and net assets are close to $47 million. In other words, it is still a small fund.
Around 60% of the portfolio is in the leading 10 stocks. Among them are the renewable energy equipment and services company Nel ASA (OTCMKTS:NLLSF); Bloom Energy; U.K.-based energy storage name ITM Power (OTCMKTS:ITMPF); and Ballard Power Systems.
HDRO is down 41% so far in the year. The fund may appeal to those looking for a basket of hydrogen stocks to buy. Future months are likely to see the further adoption of green hydrogen initiatives across different sectors.
Hydrogen Stocks: Global X Hydrogen ETF (HYDR)
The Global X Hydrogen ETF (NASDAQ:HYDR) was first listed in July 2021. HYDR tracks Solactive Global Hydrogen Index and currently holds 25 stocks.
The top 10 stocks comprise close to three-quarters of almost $32 million in net assets. Put another way, HYDR is a concentrated fund. Among those leading stocks are Nel ASA, Bloom Energy, Plug Power, Ballard Power Systems, South Korean Doosan Fuel Cell, and Fuelcell Energy (NASDAQ:FCEL)
HYDR is down close to 42% YTD. Shares of companies in HYDR are likely to remain volatile, but the recent decline offers a better opportunity into this ETF that focuses on hydrogen stocks.
Plug Power (PLUG)
Our final green hydrogen stock is Plug Power (NASDAQ:PLUG). Management reported Q1 results on May 9. Revenue grew from $72 million to $140.8 from a year ago. Net loss per share was 27 cents compared to a net loss per share of 12 cents a year ago.
In April, Plug agreed with chemicals heavyweight Olin (NYSE:OLN) “to create a joint venture to produce and market green hydrogen to support growing fuel cell demand in the global hydrogen economy.” Understandably PLUG stock investors were excited.
Last week, the company also announced it “will build a 35-tons-per-day green hydrogen generation plant at Port of Antwerp-Bruges in the heart of Europe.” Regular InvestorPlace.com readers likely know that in Europe, Plug Power is also working with French retail giant Carrefour (OTCMKTS:CRERF).
PLUG shares have lost over a third of their value since the start of the year. The price-sales ratio stands at 18.4x, while Wall Street’s 12 month forecast for PLUG stock is $33.50.
On the date of publication, Tezcan Gecgil 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.