3 Hydrogen Stocks Brimming With Potential in May 2024


  • These hydrogen stocks are gaining traction due to significant new funding, boosted growth and industry-wide expansion.
  • Linde (LIN): LIN supports global sustainability through its extensive hydrogen station network and ambitious environmental initiatives.
  • Air Products and Chemicals (APD): APD strengthens its leadership in hydrogen technologies with strategic expansions and a focus on green energy solutions.
  • New Fortress Energy (NFE): NFE drives renewable sector growth, focusing on innovative LNG solutions and strategic international expansion.
hydrogen stocks to buy - 3 Hydrogen Stocks Brimming With Potential in May 2024

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While determining which hydrogen stocks to buy provides an intriguing opportunity, investors must have the patience to strike gold.

Hydrogen is a fantastic idea but is underutilized in the automobile industry, long-haul freight, and even utility-scale projects. That makes it tough to create a large-scale business, which is what would be necessary to drive explosive growth. Nonetheless, the market saw some unusual trading patterns recently, and shares of companies surged as investors returned to riskier assets.

Now, as investors wait for positive developments, plenty of hydrogen-related projects are still in the works. The hydrogen business is profiting from a $1.7 billion conditional loan guarantee, aimed at elevating its growth and development. Moreover, the US Department of Energy committed $7 billion in clean hydrogen to establish seven hydrogen hubs nationwide.

Besides, high interest rates are significantly weighing down the industry. However, if adjustments are made to the current 45v tax credit standards, hydrogen stocks can potentially deliver a much-needed industry boost.

Linde (LIN)

Logo of Linde AG (LIN) in Hanover, Germany - The Linde Group is a multinational chemical company
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Linde (NYSE:LIN), a pioneer in the hydrogen energy sector, maintains a global network of hydrogen stations. Its dedication to sustainability is emphasized in S&P Global’s Sustainability Yearbook 2024, which reflects its ambitious plan to reduce greenhouse gas emissions by 2035.

This vision is backed by LIN’s $150 million investment in a revolutionary green steel plant project in Sweden, aiming to cut carbon emissions drastically. The initiative involves transitioning coal to hydrogen for steel production, marking a significant step towards clean energy and sustainability.

Furthermore, LIN’s commitment to growth is mirrored in its first-quarter of 2024. With an impressive earnings-per-share (EPS) of $3.35, representing a 9% bump, and an 8% year-over-year (YOY) increase in net income to $1.8 billion, it anticipates further earnings growth of 4% to 6% for Q2, 2024. This upbeat projection is bolstered by TipRanks analysts, who assign it a robust 13.82% upside from the current level, signaling bright days ahead.

Air Products and Chemicals (APD)

Air Products (APD) logo on the Arts Quest building, Air Products is a sponsor of Air Products Town Square at Arts Quest in Bethlehem, PA
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Despite recent industrial headwinds, Air Products and Chemicals (NYSE:APD) is at the forefront of the hydrogen business. The company’s leadership is being strengthened by smart expansions and a strong response to market struggles.

Last month, APD received funds to construct two massive hydrogen refueling stations near its current German headquarters in Hattingen. This initiative is part of a larger European effort to reduce the transportation sector’s carbon impact, particularly in Germany. It demonstrates the company’s dedication to promoting sustainable energy alternatives.

Meanwhile, APD has established itself as a go-to for investors, with dividend growth for 41 consecutive years. In January, the APD board hiked the quarterly dividend to $1.77 per share, yielding 2.70% right now.

Additionally, analysts expect EPS growth to accelerate to 9.5% in 2025 and 2026, following a possible 6.6% upswing in 2024. This trajectory reflects the company’s overall long-term strategy, promising attractive rewards for those who stay patient.

New Fortress Energy (NFE)

Large tanker ship carrying natural gas at dusk in harbor
Source: shutterstock.com/Wojciech Wrzesien

New Fortress Energy (NASDAQ:NFE) is emerging as a stalwart in the renewable energy revolution with an explicit expansion strategy.

NFE marked its entry into LNG production by commissioning its first floating liquefied natural gas (FLNG) unit in Q1 2024, with the beginning of LNG production expected later this month. Simultaneously, the business strengthened its operations in Brazil by opening two new LNG terminals and moving forward with substantial power projects, laying the groundwork for future energy sector growth.

Following its operational milestones, NFE has outperformed its top and bottom lines. The company’s non-GAAP EPS of 67 cents beat projections by three cents, while revenue increased 19.2% yearly to $690.3 million, topping expectations by $48 million. This result demonstrates NFE’s robust financial health.

Moreover, the company is currently trading at less than two times forward sales estimates. This improved valuation compared to last quarter’s 3.56 times makes it a strong bet for investors.

On the date of publication, Nabeel Bukhari 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.

Nabeel Bukhari is a seasoned research analyst and keen investor. His expert insights help readers to skillfully tackle the complexities of the financial sector, with a particular focus on electric vehicles (EVs) and technology stocks. Nabeel holds a Bachelor of Laws degree from Bahria University.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-hydrogen-stocks-brimming-with-potential-in-may-2024/.

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