Long-term investment thinking is one of the best attributes we can have as investors. Patience, discipline and confidence in the investment plan and analysis of the companies in which we decide to put our capital is key. Especially in booming and transitional sectors such as the energy sector and renewable energy. The hydrogen production sector is an area with a lot of potential and a good horizon. For this, I bring you 3 hydrogen stocks that are worth a look. Study these companies and think about having them in your portfolio with a long-term vision.
Cummins (NYSE:CMI) is a household name when it comes to power generation. They are involved in various aspects of this field, including engines, filtration and electrification technologies. What sets them apart is its unwavering commitment to clean energy solutions.
In their recent financial report they demonstrated impressive results with second-quarter revenues reaching a whopping $8.6 billion. Their GAAP net income hit $720 million, showcasing their financial stability. Cummins achieved an EBITDA of 15.1% of sales and diluted EPS of $5.05 during the same period, solidifying their position in the industry. It’s worth noting that these results include $23 million in costs related to the spinoff of Atmus Filtration Technologies (NYSE:ATMU).
They remain optimistic about 2023 with projections of revenue growth between 15% and 20%, and EBITDA ranging from 15% to 15.7% for the full year.
One of their pioneering initiatives is the Accelera segment, focusing on zero-emission solutions. This division recently made a significant leap in clean urban transportation by powering North America’s first hydrogen passenger train. This train, powered by Accelera fuel cells, runs on hydrogen showcasing the potential of green hydrogen in sustainable transportation.
Additionally, Cummins’ partnership with Blue Bird Corporation (NASDAQ:BLBD) aims to deploy 1,000 electric school buses in North America, offering cleaner and quieter transportation options for students.
FuelCell Energy (NASDAQ:FCEL) is all about fuel cell technology, a clean and efficient way of generating electricity from hydrogen. Fuel cells produce electricity while emitting only heat and water as byproducts, making them a green alternative to traditional energy sources.
One of the reasons they are one of the best options for long-term investment is their collaboration with Exxon Mobil (NYSE:XOM) to advance carbonate fuel cell technology. This partnership focuses on capturing carbon emissions from industrial sources, contributing to a reduction in greenhouse gases. FCEL is also working with Chart Industries (NYSE:GTLS), an expert in carbon dioxide (CO2) and hydrogen compression and liquefaction. Together, they aim to tackle CO2 capture and storage, as well as hydrogen generation and storage, key components of the transition to cleaner energy.
In terms of financial performance, reported revenues of $38.3 million in the second quarter of 2023, a significant increase from the previous year. While they still recorded a gross loss, it was lower than the previous year, indicating positive trends in their financials.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is a standout in the clean energy sector, specializing in fuel cell technology. They’ve recently gained recognition as one of the top choices for long-term hydrogen investments. Bloom Energy’s innovation shines through their development of the world’s largest solid oxide electrolysis facility at NASA Ames Research Center. This technology is remarkably efficient, producing 20-25% more hydrogen per megawatt compared to similar technologies.
Their Series 10, a 10-megawatt fuel cell power plant, is groundbreaking. It comes with a five-year fixed-rate contract and can be delivered and operational in just 50 days. This disrupts the traditional power purchase model, allowing customers to meet their energy needs swiftly. Plus it helps them meet net-zero emissions targets without long-term commitments.
In terms of financial performance, reported revenues of $301.1 million in Q2 2023. A remarkable 23.8% increase year-over-year. They are also improving their margins, moving from a negative gross margin in 2022 to a positive 18.7% in 2023, while reducing operating losses.
As of this writing, Gabriel Osorio-Mazzilli did not hold (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.