Stock Market

With all the talk centered on climate change and the proposed solution of the electrification of everything, it was easy to forget about hydrogen stocks. Over the years, the sector has produced mixed results, with some enterprises performing well while others – especially those focused on fuel-cell technologies – have floundered.

Still, hydrogen stocks remain a compelling potential catalyst because of the overriding clean-energy directives. Primarily, hydrogen can be produced from diverse domestic resources with the potential for near-zero greenhouse gas emissions. The end emissions for fuel-cell-generated hydrogen are water vapor and warm air. Additionally, the element holds promise for growth in both the stationary and transportation energy sectors.

With so much relevance on tap, it’s worth taking the sector into serious consideration. Below are intriguing hydrogen stocks to add to your portfolio.

Linde (LIN)

Source: nitpicker / Shutterstock.com

As a leading industrial gases and engineering company, Linde (NASDAQ:LIN) offers significant, high-level relevancies. Per its website, the enterprise is actively helping customers decarbonize their operations through carbon capture and hydrogen technologies. Also, Linde is developing clean energy projects across a range of applications and industries.

Notably, over the past one-year period, LIN gained almost 26% of equity value. In the past five years, shares swung up 149%. Stacked against a tech stock, Linde’s performance isn’t exactly what you would call impressive. However, if you need a business you can lean on to steadily grow your portfolio, Linde is one of the more attractive hydrogen stocks.

Financially, the company’s key strengths lie in its profitability metrics, which are excellent across the board. As well, its EBITDA growth rate pings at 16.2%, beating out 61.35% of its peers. While you are paying 33.3X trailing-year earnings (which isn’t cheap), Linde helps sweeten the pot with an easily sustainable forward yield of 1.22%.

Lastly, analysts rate shares a consensus strong buy with a $455.57 price target.

Air Products and Chemicals (APD)

Source: Bjoern Wylezich / Shutterstock

For those that want to take a dip into the wild side of hydrogen stocks, Air Products and Chemicals (NYSE:APD) offers just such an opportunity. Principally focused on selling gases and chemicals for industrial use, Air Products presents enormous pertinence for the overall economy. Unfortunately, the market reacted very poorly to the company’s latest financial disclosure.

According to MarketWatch, Air Products cut its earnings guidance and reported an unexpected decline in fiscal first-quarter sales. Its 2024 adjusted earnings outlook will range between $12.20 to $12.50 per share. This estimate sits below analysts’ consensus target of $12.97 per share. Also, adjusted earnings in the current quarter may miss expectations, driving serious concern for APD stock.

On the plus side, the red ink may present a big discount for contrarian speculators. Moreover, economic conditions may improve in favor of taking the bullish bet. With U.S. GDP figures soaring and the labor force running at full steam, APD could be intriguing.

Currently, analysts peg shares a moderate buy with a $266.42 consensus target.

Bloom Energy (BE)

Source: Sundry Photography / Shutterstock

Headquartered in San Jose, California, Bloom Energy (NYSE:BE) manufactures and markets solid oxide fuel cells that produce electricity on-site. While the enterprise offers relevance – especially in the form of grid security – BE stock historically has had trouble generating momentum. For example, in the trailing five years, shares only gained about 9%. In the past 52 weeks, BE stumbled more than 47%.

Earlier in the year, wider trouble among hydrogen stocks overall caved in on Bloom’s market value. However, BE has been attempting to right the ship. On Monday, the equity popped up nearly 7%. And in the trailing five sessions, it gained over 12%.

Fundamentally, the global solid oxide fuel cell market appears compelling. Last year, the sector reached a valuation of $2.4 billion. Analysts project that the space could expand at a compound annual growth rate (CAGR) of 21.2% to 2030. If so, the industry could see a valuation of $6.2 billion.

To be clear, Bloom represents high risk, particularly with a forward earnings multiple in the triple digits. Still, analysts rate BE stock a moderate buy with an $18.35 price target, projecting 49% upside potential.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Articles You May Like

Warren Buffett’s Berkshire Hathaway scoops up Occidental and other stocks during sell-off
Wall Street’s fear gauge — the VIX — saw second-biggest spike ever on Wednesday