The world is actively transitioning from fossil fuels to green alternatives; hence the best green hydrogen stocks emerge as a beacon for eco-conscious investment.
The escalating conflict in Ukraine only intensifies this global trend as nations consider punitive measures against Russia’s oil reserves. As such, hydrogen stocks with solid growth prospects are finding themselves under the spotlight.
The appeal of hydrogen extends beyond its role as an eco-friendly alternative. It’s a versatile energy source, finding utility across key sectors such as electricity generation and vehicle fueling.
The U.S. Department of Energy recently expressed its intent to encourage key industries to adopt hydrogen. Similarly, Japan announced a massive $107 billion commitment over the next 15 years to grow its hydrogen output six-fold to 12 million tons by 2040.
These developments are opportune for those looking to tap into green hydrogen stocks. Let’s look at some of the best hydrogen stocks for green investment, with the unfolding landscape seemingly ripe with potential.
| HDRO | Defiance Next Gen H2 ETF | $8.87 |
| BE | Bloom Energy | $16.85 |
| LIN | Linde | $347.19 |
Defiance Next Gen H2 ETF (HDRO)
Exchange-traded funds (ETFs) have always been a powerful tool in the quest for diversification into burgeoning sectors. The Defiance Next Gen H2 ETF (NYSEARCA:HDRO), with its modest expense ratio of 0.3%, is arguably one of the most compelling choices.
It offers a cost-effective way to gain exposure to industry titans, serving as a strategic entry point into the dynamic hydrogen market.
The HDRO ETF portfolio includes promising stocks such as Bloom Energy (NYSE:BE), Ballard Power Systems (NASDAQ:BLDP), and FuelCell Energy (NASDAQ:FCEL).
To qualify for inclusion, a company must either generate half of its revenue from hydrogen or a fuel cell project or be actively involved in developing fuel cells or hydrogen sources. This criterion ensures that the ETF remains focused on the hydrogen sector, offering investors a potent vehicle for targeted long-term exposure.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) has established its position as a pioneer in solid oxide fuel cell technology, effectively turning heads with its innovative approach to electricity generation.
Various sources, including hydrogen, biofuel, or natural gas, can power these cells. However, what truly sets the firm apart is its electrolyzers, which can generate hydrogen while consuming 35%-45% less electricity than its rivals.
Thanks to the ability to harness ‘excess heat and energy,’ including that produced by solar power, the company’s offering stands as a beacon of efficiency.
Moreover, companies like Bloom enjoy a huge bump from green energy subsidies, propelling its growth as the U.S. pursues clean energy ambitions.
Nevertheless, its financials tell a compelling story, with record first-quarter sales of $275.2 million, up 37% year-over-year, alongside margin expansion from 13.9% to 19.7%. Over the past five years, it has grown its top-line results by almost 30%.
However, the persistence of its net losses, amounting to $74.9 million, serves as a reminder of Bloom’s challenges. Despite these hurdles, the company’s long-term potential remains high, buoyed by an appetite for clean, efficient energy solutions.
Linde (LIN)
Linde (NYSE:LIN) is effectively shaping the future of green hydrogen with its innovative approach. Most of the world’s hydrogen is derived from natural gas, which releases carbon dioxide.
However, Linde, a leading producer of proton exchange membranes, wants to produce hydrogen directly from electrolysis, a process devoid of greenhouse gas emissions.
This green hydrogen production and a hefty $1.8 billion investment in hydrogen production in Texas sets Linde on a fast track to becoming a leading player in the hydrogen market. This solid positioning makes Linde an appealing prospect for hydrogen stock investors.
Furthermore, The firm stands on a solid financial footing, with a robust cash balance of almost $5 billion. It operates a consistent business, generating first-quarter sales of $8.2 billion and a net income of $1.5 billion.
Also, as a champion of the transition to hydrogen-powered cars to replace gasoline ones, its robust growth trajectory makes it a tremendous play over the long term. The company’s proactive stance offers a promising alternative, positioning it to reap substantial rewards should hydrogen cars gain traction.