The Hydrogen Highway: 3 Stocks Fueling the Clean Energy Future

Stocks to buy

As the world is moving past fossil fuels, a new form of energy needs to replace them. However, today most consumers have to choose between efficiency and sustainability when choosing a form of energy to use. What if I told you there is a way for our energy to be both efficient and sustainable? Hydrogen energy is the answer. Not only that it’s morally attractive and better for the planet, but it also has strong potential for growth. A 9.2% CAGR is predicted for the hydrogen industry until 2030, with the potential for faster growth in the following years. The biggest current challenge is adapting hydrogen energy for consumer use instead of simply industrial use. According to McKinsey, by 2050 only 15% of hydrogen will be used for industrial purposes, with the rest serving as an efficient and sustainable energy source. Here are three of the best hydrogen stocks to invest in.

Plug Power (PLUG)

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Plug Power (NASDAQ:PLUG) is one of the best American hydrogen stocks to invest in. The company manufactures hydrogen infrastructure and fuel-cell solutions that replace conventional batteries powered by electricity. The company owns one of the largest manufacturing facilities in the country, which has a special focus on electric vehicles and their batteries. Although the company had released a concerning Q3 report last November, Plug Power has successfully rebounded after its new green hydrogen plant operation in Georgia, which is the biggest liquid green hydrogen plant in the country. This new plant would allow Plug Power to reduce expenses, contributing to improving financials. The company has announced that its Q4 earnings will be released on the first day of next month before the market opens.

Furthermore, Plug Power has completed a massive 1.6 billion loan from the U.S. Department of Energy in order to launch six additional U.S. green hydrogen production plants. Starting in 2026, the company anticipates that it will produce more than 200 tons of hydrogen daily. The construction for this is expected to start in Q3 of 2024. These new production plans and investments into facilities showcase a fast growing future for Plug Power. 

Linde (LIN)

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Linde (NYSE:LIN) is a massive German company that has established itself as a leader among hydrogen stocks. It dedicates billions to the development of new, sustainable sources of energy and has thus far made significant progress in expanding the reach of hydrogen energy.  In addition to being the first company to set up a hydrogen fueling system for trains, it has also expanded its hydrogen stations globally.

In addition to strong qualitative reasons, Linde’s financials support the company’s buy thesis. Linde is the biggest company in the hydrogen space, with a valuation of over $218 billion. This size is useful as companies race to make progress in the hydrogen space. The company is also becoming significantly more profitable, with net income rising by over 15% YOY and reaching $1.54 billion in the past quarter. This massive profit allows the company to reinvest into development, consolidating its strong position in the hydrogen space. 

Air Products (APD)

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Air Products (NYSE:APD) is an American company with strong growth prospects in the hydrogen industry. It is a large company that has made significant strides to the development of cheaper and more efficient hydrogen energy. It owns over 100 hydrogen energy plants, and has been rapidly expanding this number internationally. Air Products received $475 million from the Canadian government to build a $1.6 billion net zero hydrogen energy complex in Canada and it is also expanding its operations to countries like the Netherlands and Saudi Arabia. 

Its strong financials back up a “buy” rating. Air Products has a market capitalization of over $50 billion, a significant amount that gives it an edge over its competitors. While most competitors are newer companies, Air Products boasts profitable chemicals segments that add stability to the company. This allows for more fierce competition in the hydrogen space. With a profit margin of over 20%, Air Products is able to invest significant amounts of money in development for hydrogen energy, without having to take on high-interest debt or risk the stability of the company.

On the date of publication, Tomas Levani 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

Tomas is a self-taught investor with a passion for ESG investing. He has managed the portfolio of a small investment fund, interned at a Fortune 500 investment company, and started his own research firm. Through his freelance writing, he now aims to find favorable investments in companies with a mission of bettering the world.

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