5 Hydrogen Stocks to Buy: A New Approach in the Race for Clean Energy
The world is desperate for energy alternatives to traditional fossil fuels. For the most part, Elon Musk and Tesla tend to dominate this industry. However, Tesla’s stock is already up over 1,000% since 2020. For this reason, clean energy investors are looking for other emerging energy sources where they can park their money. One of the early leaders is hydrogen. This article will take a quick look at the five best hydrogen stocks to buy.
Why Invest in Hydrogen Stocks?
Hydrogen is the most abundant element in the universe. It’s also one of the lightest. When used as an energy source, hydrogen has three main advantages:
- Using hydrogen as a fuel source creates just one by-product: water vapor. This makes it much cleaner than fossil fuels.
- Hydrogen cars can be recharged in a style similar to a gas station. This means no waiting hours for your electric battery to recharge.
- Hydrogen is much more plentiful and dependable than renewable sources like solar and wind.
Right now, there are two main alternatives to fossil fuels. These alternatives include ithium-ion electric batteries and renewable sources. There are a few problems with both solutions. For example, lithium-ion batteries are incredibly heavy and rely on rare materials. Renewable sources, like solar and wind, rely on environmental activity that is out of human control (AKA unreliable). On the other hand, hydrogen is plentiful, clean and easy to use.
Despite the advantages listed above, hydrogen has never made significant progress as a fuel source. But, in the wake of the Russia/Ukraine conflict, the U.S. is revisiting the national conversation on energy independence.
This could prove to be a massive tailwind that leads the nation to revisit hydrogen energy in the coming years. Carefully examine the best hydrogen stocks to buy now. By doing this, you could get ahead of the potential trend.
Hydrogen Stocks to Buy Now
No. 5 Hyzon Motors (Nasdaq: HYZN)
Hyzon Motors is one of only hydrogen stocks to buy that actually makes hydrogen-powered vehicles. It mainly focuses on the commercial sector and has a portfolio of three vehicles. Hyzon’s vehicles include two semi-trucks and a coach bus.
Despite operating in such a new industry, Hyzon is much bigger than you’d think. It operates in six markets globally and has over 200 employees. It also already has hydrogen-powered vehicles out on the streets. This is more than a lot of EV startups can say.
In 2021, Hyzon Motors delivered 87 vehicles. This brings the total number of Hyzon vehicles on the road to over 500.
It’s also worth noting that Hyzon’s backlog has more than tripled in the past year. In 2021, it had a backlog of $83 million. And it has since skyrocketed to $287 million. If you’re not familiar, a company’s backlog is its list of orders that have been placed but not completed yet.
Hyzon Motors just went public in late 2020 and is not profitable yet.
No. 4 Air Products & Chemicals, Inc (NYSE: APD)
Air Products & Chemicals is an industrial supplier of gasses and chemicals. It supplies chemicals to 26 different industries in total. One of its growing industries? Supplying hydrogen energy. Air Products supplies hydrogen energy to the following outlets:
- Industrial vehicles
One of the things that makes Air Products one of the top hydrogen stocks to buy is its industry experience. It has been supplying companies with different fuel styles since 1940. Air Products is also a veteran in the hydrogen energy space. And it deployed its first hydrogen fueling station in 1993.
Air Products posted a 2021 revenue of $10.32 billion and a net income of $2.1 billion. This gives it plenty of expertise and capital to expand its hydrogen business.
No. 3 Bloom Energy Corp (NYSE: BE)
Bloom Energy is a company that is “making clean, reliable energy affordable for all.” This includes carbon capture, hydrogen gas and more. Similar to Air Products, Bloom Energy’s forward-thinking approach is not new. In fact, Bloom’s co-founder, Jim McElroy, built the world’s first hydrogen fuel cell for NASA in the 1960s.
One thing to note is that hundreds of large corporations are pledging to go carbon neutral in the next few decades. However, setting a goal like “achieving carbon neutrality” and actually doing it are two different things. Usually, achieving carbon neutrality requires expertise that’s outside of most companies’ domains.
For example, a company like Nike understands how to produce, market and sell athletic apparel. However, it most likely doesn’t have the expertise or resources to reduce its (probably large) carbon footprint. For this reason, companies like Bloom Energy could become pivotal during the energy transition. Large corporations will rely on the Bloom Energys of the world to achieve their goals of carbon neutrality.
This could already be materializing for Bloom Energy as its backlog has exploded in recent months. From 2020 to 2021, the contract value of its backlog more than doubled from $1 billion to $2.4 billion.
No. 2 FuelCell Energy Inc (Nasdaq: FCEL)
FuelCell delivers efficient, affordable clean energy solutions. This involves supplying, recovering, and storing energy. It does this by offering two main services:
- Offering energy solutions that produce low or zero-carbon emissions. This includes providing hydrogen as an alternative fuel source.
- Capturing and removing carbon from the atmosphere.
The main thing that makes FuelCell one of the top hydrogen stocks to buy is its technological moat. FuelCell currently owns 143 U.S. patents related to its fuel cell technology. Outside of the U.S., it owns another 164 patents.
FuelCell is yet another example of an alternative energy company whose business is rapidly expanding. Right now, it has a backlog of $1.29 billion. It also has $432.2 in cash on hand to help fund 2022 and beyond.
Best Hydrogen Stocks No. 1 Plug Power (Nasdaq: PLUG)
Plug Power owns one of the only end-to-end hydrogen ecosystems. For this reason, it’s one of the top hydrogen stocks to buy. By “end-to-end” hydrogen ecosystems, I mean that Plug Power is responsible for:
- Producing and liquefying hydrogen
- Transporting it
- Storing it
- Dispensing it.
This vertically integrated service makes Plug Power an easy choice for large corporations that want to achieve carbon neutrality. Instead of partnering with a company that provides a partial solution, companies can partner with Plug Power which does it all. This could be what helped Plug Power secure a deal with Walmart to be its green hydrogen supplier.
This deal allows Plug Power the option to deliver up to 20 tons of liquid green hydrogen per day to Walmart’s distribution centers. Plug Power works with several other powerhouse organizations. In addition to the world’s largest retailer, its client list includes Boeing, NASA, Amazon, FedEx and The Home Depot.
I hope that you’ve found this article valuable when it comes to finding the five best hydrogen 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.
About Teddy Stavetski
A University of Miami grad, Teddy studied marketing and finance while also playing four years on the football team. He’s always had a passion for business and used his experience from a few personal projects to become one of the top-rated business writers on Fiverr.com. When he’s not hammering words onto paper, you can find him hammering notes on the piano or traveling to some place random.