3 Helium Stocks to Capitalize on The Shortage
You might now have heard about it but we are actually in the middle of a global helium shortage. If this trend continues, it could cause the price of helium to skyrocket even higher than it already has. If this happens, it would result in record profits as well as soaring prices for helium stocks.
The State of the Current Helium Shortage
To be fair, this year has had quite a few major news stories. To name just a few, there is the land war in Europe, record inflation and a billionaire buying Twitter like he was shopping for a new car. It’s no wonder that the helium shortage is getting buried in the news cycle. On top of that, there have also been plenty of shortages recently. So many, in fact, that’s it’s becoming hard to keep up.
For example, there was a shortage of toilet paper, masks and medical equipment almost immediately after the pandemic started. Shortly after, computer chips fell into a shortage. This chip shortage then led to a low supply of many products, such as new cars. More recently, there is a shortage of baby formula. Now, it’s helium.
At first glance, a helium shortage might not sound like the end of the world. Most of us only ever use helium to fill up balloons. But, helium is actually used in a lot more industries than you might think.
Helium is used in hard drives, scientific research, medical MRIs, supercomputing and space travel. Notably, government agencies like NASA and the Department of Defense rely heavily on helium. This fact alone is reason to believe that helium mining will quickly become a priority.
Helium, like natural gas, is also a non-renewable resource. This means that there is a finite amount that can be extracted from the Earth. The companies that can get ahead of this shortage and boost the supply will surely line their pockets doing so. With that in mind, let’s take a look at three helium stocks that could capitalize on the current shortage.
Top Helium Stocks to Buy Now
No. 3 Total Helium (TSXV: TOH.V)
Total Helium is almost as young as the helium shortage itself. It was formed after Wintertide Ventures merged with Brooks Energy Company in 2021. The organization later renamed itself Total Helium. This company might be a newcomer in the helium industry. But, it’s already got its hands on a valuable asset. Namely, North America’s largest conventional onshore natural gas and helium field.
This gas and helium field is called the Hugoton Gas Field and is located in Western Kansas. Boltz35B is an 86,000-acre drilling project that plans to extend this field.
In regard to drilling, Total Helium is really just getting the ball rolling. It started trading on The TSX Venture Exchange on November 11, 2021. Just three days later, it started drilling in Boltz 35B. Impressively, it has already landed a purchase agreement to sell its helium. It struck a deal with an unnamed leading global industrial gases company that committed to buying helium from Total Helium.
Total Helium has received two payments of $950,000. If its drilling operations continue to be successful, it has a good chance of being one of the best helium stocks to buy during 2022.
No. 2 Desert Mountain Energy (CVE: DME)
Another one of the best helium stocks to buy is Desert Mountain Energy. It owns mineral leases to 85,000 acres of land in Northeastern Arizona. This is another hotbed area that’s known to be rich in helium. Desert Mountain Energy has already drilled four wells on this land. Notably, it also completed this drilling process entirely with equity. Desert Mountain Energy currently has no debt on its wells.
On top of that, it has enough cash to complete a well on the McCauley Helium Field. It plans to make this well operational as early as Q3 2022. Desert Mountain Energy shows no sign of slowing down anytime soon. It plans to build 60-70 more wells on its leased area over the next 5 years. For this reason, it could remain one of the best helium stocks to buy and hold for the immediate future.
No. 1 Air Products & Chemicals Inc (NYSE: APD)
Those first two helium stocks are pure plays. This means that they pretty much exclusively mine helium. Additionally, they are both much younger companies. For this reason, investing in them based on the helium shortage could yield higher returns. However, they are also both slightly risky. If something happens to their main projects then they won’t have much other revenue to rely on. Air Products & Chemicals, on the other hand, is much more diversified.
Air Products & Chemicals is a global supplier of dozens of gases. This includes argon, carbon dioxide, carbon monoxide, oxygen, hydrogen, nitrogen and helium. As far as its helium business, it has developed leading technology for extraction, production, distribution and storage.
Air Products & Chemicals is also already highly profitable. It posted a revenue of $2.95 billion and a net income of $530.5 million in Q1 2022. If you are looking for a slightly safer helium stock, Air Products & Chemicals is a good choice.
Final Thoughts on Helium Stocks
Before leaving you, I have one last comment that’s applicable to all of these helium stocks. Be sure to thoroughly research the company before investing in helium stocks. This step is particularly crucial for natural resource companies. These companies almost always need to jump through regulatory hoops to begin mining. This process also includes environmental impact statements. If a company doesn’t have the proper approval, it could delay its drilling for months and sometimes even cancel it altogether.
I hope you’ve found this article valuable in learning about a few helium stocks to buy. Please remember that I’m not a financial advisor and am just offering my own research and commentary. As usual, please base all investment decisions on your own due diligence.