Hydrogen is set to play a major role in the transition to green energy. That’s because it doesn’t emit greenhouse gas. Its only waste product is vapor, which we all know is harmless. And, if you’ve been watching the news, you know Goldman Sachs, for example, says the market for hydrogen production could reach $1 trillion by 2050. All of that is great news for hydrogen stocks.
In addition, according to Research and Markets, the global hydrogen market could reach $206.65 billion by 2027 — thanks to concerns about carbon emissions and the rapid push toward green energy solutions for climate issues. Also, the U.S. Department of Energy (DOE) just awarded about $34 million to help advance clean hydrogen.
That said, investors may want to jump on some of the top hydrogen stocks, especially ones that have become ridiculously and temporarily oversold.
Hydrogen Stocks: Air Products and Chemicals (APD)
The last time I mentioned Air Products and Chemicals (NYSE:APD), I said, “With the negativity priced into the gap, I’d use weakness as an opportunity. For one, APD is now technically oversold on relative strength, MACD and Williams’ %R. Two, the last time APD became this technically oversold, it bounced from about $270 to $304.”
That was on Aug. 11, as APD traded at $285.50. While APD is still trading around that same price, consolidating at support, I still believe it could refill its bearish gap of around $300 with patience. It’s also still oversold, with hydrogen serving as a substantial catalyst. Helping, analysts at Mizuho raised their price target to $330 from $322. Better, the company just raised its fiscal year adjusted EPS guidance to a new range of $11.40 to $11.50 from $11.30 to $11.50.
Plus, the company expects to return more than $1.5 billion in dividends to shareholders. At the moment, APD yields 2.46% and is one of the top hydrogen stocks to buy and hold now.
Bloom Energy (BE)
On Aug. 11, I also mentioned Bloom Energy (NYSE:BE), as it traded at around $14.80. While it has since slipped to $14.25, it’s still incredibly oversold on RSI, MACD and Williams’ %R, as well. From a current price of $14.26, I’d like to see it initially refill its bearish gap around $18. Helping, JP Morgan recently raised its price target on Bloom Energy to $22 from $20. RBC Capital also initiated an outperform rating on the stock.
Also, as I noted on Aug. 11, “We have to consider Bloom just unveiled two new products that could boost growth moving forward. For one, its Series 10 energy server is expected to meet the needs of those in the data center market. Two, it also just launched its advanced Combined Heat and Power (CHP) solution, which uses high-temperature exhaust steam for industrial steam production and absorption chilling, as noted by the company.
Defiance Next Gen H2 ETF (HDRO)
Or, if you just want to diversify with most of the top hydrogen stocks at a lower cost, invest in an ETF, such as the Defiance Next Gen H2 ETF (NYSEARCA:HDRO). With an expense ratio of 0.30%, it trades at around $8 a share. With this ETF, investors gain exposure to stocks such as Plug Power (NASDAQ:PLUG), Bloom Energy, Ballard Power Systems (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.
On the date of publication, Ian Cooper did not hold (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.
