Hydrogen is a clean energy source that emits no greenhouse gasses when burned, making it a cleaner energy source than fossil fuels such as natural gas, oil, and coal. There are several best hydrogen stocks and ETFs that investors can consider.
Best hydrogen stocks
Ballard Power (BLDP)
Ballard Power is a company that designs, develops, manufactures, sells, and services proton exchange membrane (PEM) fuel cell products for various markets, including heavy-duty motive, portable power, material handling, and backup power.
The company offers fuel cell power products that deliver proven durability, reliability, power density, and the lowest total cost of ownership.
Ballard’s heavy-duty modules provide flexible solutions for motive applications, including buses, trucks, trains, and ships, with net power ranging from 30 kW to 200 kW. Ballard also offers air and liquid-cooled stacks from 5 kW to 150 kW to original equipment manufacturers and system integrators to power fuel cell systems. Ballard has designed and shipped over 400 MW of fuel cell products to date. The company has supplied vehicles with fuel cells traveling more than 30 million miles.
Ballard has signed a contract with Weichai Power for a strategic partnership to supply the Chinese market with fuel cell systems for trucks, buses, and forklifts. Ballard is committed to reducing the total lifecycle emissions of its fuel cell products and being carbon neutral by 2030.
Ballard announced its Q4 and Full Year 2022 Results on March 17, 2023. The company’s market cap is $1.57B, and its revenue for the trailing twelve months is $83.79M. Ballard’s net income for the trailing twelve months is -$173.49M, and its EPS for the trailing twelve months is -$0.58.
Bloom Energy (BE)
Bloom Energy is a public company headquartered in San Jose, California, that manufactures and markets solid oxide fuel cells that produce electricity on-site. The company was founded in 2001 and came out of stealth mode in 2010. It raised more than $1 billion in venture capital funding before going public in 2018.
Bloom Energy produces solid oxide fuel cell power generators called Bloom Energy Servers that use natural gas or biogas as fuel. The Bloom Energy Server is a distributed generation platform that can use biogas, hydrogen, natural gas, or a blend of fuels to generate electricity.
The solid oxide fuel cells in Bloom Energy Servers are fuel-flexible, allowing customers to use fuels like natural gas, biogas, hydrogen, or a blend of fuels to generate electricity.
Bloom Energy is scaling up the use of renewable natural gas (“RNG”) for use as fuel in its Energy Server. RNG comes from biogas produced from decomposing organic waste.
Bloom Energy is also incorporating carbon capture and utilization and storage into its business model. Bloom Energy Servers make it more feasible and cost-effective to capture carbon-dioxide emissions compared to traditional combustion.
In March 2023, Bloom Energy and SK ecoplant Americas completed the installation of fuel cell systems at two Stamford Health locations. The Bloom platform will provide Stamford Health staff with predictable, stable power to help support Stamford.
Plug Power is an American company that develops hydrogen fuel cell systems to replace conventional batteries in equipment and vehicles powered by electricity. The company is headquartered in Latham, New York, and has facilities in Spokane, Washington, and Rochester, New York.
Plug Power’s GenDrive system integrates fuel cells manufactured by both Plug Power and Ballard Power Systems and incorporates a hydrogen storage system that allows the system to “recharge” in a matter of minutes as opposed to several hours for lead-acid batteries. It allows hydrogen-powered forklifts.
Plug Power is building an end-to-end green hydrogen ecosystem, from production, storage, and delivery to energy generation. The company helps businesses achieve greater productivity and sustainability in an electrified world through hydrogen and fuel cells.
Plug Power offers its customers industry-leading electrolyzer products and affordable green hydrogen, which is quickly becoming the molecule of choice for customers both large and small.
The company also offers trailer solutions to transport green hydrogen from production plants to users around the world daily. Plug Power offers fully integrated turnkey handling systems with capacities ranging from 60 kg to 8,000 kg per day as liquid or gas.
Air Products and Chemicals (APD)
Air Products and Chemicals, Inc. is an American international corporation that sells gasses and chemicals for industrial uses. The company is headquartered in Allentown, Pennsylvania, and has approximately 19,275 employees as of 2020.
The company produces refinery hydrogen, natural gas liquefaction (LNG) technology and equipment, epoxy additives, gas cabinets, advanced coatings, and adhesives.
Air Products is a leader in hydrogen fueling systems and infrastructure, and the company sees great potential in the years ahead to extend its leadership. The company plans to invest approximately $4 billion to build, own, and operate a green hydrogen production facility in Wilbarger County, Texas.
The mega-scale renewable power to hydrogen project includes approximately 1.4 gigawatts (GW) of wind and solar power generation, along with electrolyzer capacity capable of producing 30,000 tons of hydrogen per year.
Air Products is the primary EPC contractor and will be the exclusive off-taker of the green ammonia and intends to transport it around the world to be dissociated to produce green hydrogen for the transportation market.
Shell is investing in producing decarbonized hydrogen for its own facilities and for customers in industry and mobility where direct electrification is challenging. The company aims to capture a double-digit share of global clean hydrogen sales by 2035.
In 2021, Shell started production of hydrogen by the electrolyzer at its Energy and Chemicals Park Rheinland in Germany. The 10 MW proton exchange membrane (PEM) electrolyser uses renewable energy to produce up to 1,300 tonnes of decarbonized hydrogen a year, which is used to make lower-carbon fuels at the park.
Shell’s joint venture Zhangjiakou City Transport and Shell New Energy Co., Limited started up a hydrogen electrolyser in China with 20 MW production capacity in January 2022.
Shell is also providing hydrogen road infrastructure for hydrogen fuel cell cars. The company has opened around 50 hydrogen stations for light-duty vehicles with construction approved for 50 more.
In July 2022, Shell made the final investment decision to build Holland Hydrogen 1 in the Netherlands, which will be Europe’s largest renewable hydrogen plant once operational. The 200 MW electrolyser will produce up to 80 tonnes of renewable hydrogen a day, enough to meet up to 10% of the annual hydrogen demand from Shell Energy and Chemicals Park Rotterdam. Holland Hydrogen 1 could also meet future demand for renewable hydrogen from the transport and industrial sectors.
Nel ASA is a global hydrogen company that produces, stores, and distributes hydrogen from renewable energy sources. The company serves industries, energy, and gas companies with leading hydrogen technology. Nel has a proud history dating back to 1927 and has been dedicated to hydrogen technology since then.
The company has two types of electrolyzers: alkaline and PEM. Nel has signed a firm contract with HH2E for 120 MW of alkaline electrolyser equipment, worth approximately EUR 34 million. Nel is also expanding its PEM electrolyser facility in Connecticut, which is the world’s biggest and first fully automated electrolyser manufacturing factory.
Nel has completed construction of the world’s largest manufacturing plant for hydrogen fueling stations, with a capacity of 300 units per year. The company has also announced construction plans for the world’s largest PEM electrolyser plant, with a capacity of 1 GW per year.
As of March 21, 2023, Nel’s net sales are expected to be 1,535 million, with a net income of 732 million. The company has a net cash position of 2,423 million and a P/E ratio of 30.7x. Nel’s stock is listed on the Oslo Stock Exchange under the ticker symbol NEL.OL.
FuelCell Energy Inc. (FCEL)
FuelCell Energy, Inc. is a global leader in sustainable clean energy technologies that address some of the world’s most critical challenges around energy, safety, and global urbanization.
The company designs, manufactures, installs, operates, and maintains megawatt-scale fuel cell systems that serve utilities, industrial and large municipal power users. The company offers solutions for utility-scale and on-site power generation, carbon capture, local hydrogen production for transportation and industry, and long-term energy storage.
The company’s solid oxide fuel cell is a modular platform optimized for low-cost production of clean hydrogen and power. The platform will give more organizations the option to implement a flexible energy strategy. Trinity College is the first organization to purchase FuelCell Energy’s 250 kW solid oxide fuel cell power-generation system.
As of March 9, 2023, FuelCell Energy’s stock price was $6.08, and the company had a net cash position of $8.58 million.
Investors can also consider hydrogen ETFs such as the Defiance Next Gen H2 ETF (HDRO) and the Global X Hydrogen ETF (HYDR).
The Defiance Next Gen H2 ETF (HDRO) is an exchange-traded fund that invests in companies involved in the development of hydrogen fuel cell technology.
The ETF seeks to track the BlueStar Global Hydrogen and Next Gen Fuel Cell Index, which is designed to provide exposure to companies that are involved in the development of hydrogen fuel cell technology, including fuel cell producers, hydrogen producers, and hydrogen storage and transportation companies. The index is composed of companies from around the world, including the United States, Japan, South Korea, and Europe.
The HDRO ETF was launched by Defiance ETFs in March 2021 and has an expense ratio of 0.30%.
As of March 24, 2023, the ETF has 30 holdings, with the top five holdings being Plug Power Inc., Ballard Power Systems Inc., Nel ASA, Bloom Energy Corp., and FuelCell Energy Inc. The ETF has a total net asset value of $1.2 billion and has returned 47.5% since its inception.
The Global X Hydrogen ETF (HYDR) is an exchange-traded fund that seeks to provide investors with efficient and targeted exposure to various hydrogen sub-themes that are expected to benefit from and advance the global hydrogen industry.
The ETF invests in companies that derive at least 50% of their revenue from hydrogen-related activities, including hydrogen production, fuel cells, hydrogen technology, and hydrogen integration.
The ETF was launched on July 12, 2021, and has a total expense ratio of 0.50%.
HYDR is designed to capture the global hydrogen-based energy industry and focuses on four segments of the hydrogen economy: production, fuel cells, technology, and integration. The ETF provides investors with exposure to companies that are positioned to benefit from advances in the global hydrogen industry.
As of March 21, 2023, the ETF has net assets of $38.11 million and a NAV of $10.67. The ETF has a 52-week range of $9.64 to $20.57.
Projected growth rate for hydrogen stocks in the next 5 years
According to analysts at Facts & Factors, the green hydrogen market is projected to have a strong 55.2% compound annual growth rate between 2022 and 2028. The hydrogen market could be worth up to $11.7 trillion, according to Goldman Sachs and Bank of America.
The demand for hydrogen is expected to be off the charts, with the European Commission wanting to increase hydrogen consumption from around 2% to about 14% by 2050 and China aiming to become a “hydrogen powerhouse”. The growing demand for renewable energy, supported by global government initiatives, is creating a potential multi-trillion-dollar opportunity for hydrogen stocks. Investors should consider buying hydrogen stocks before the market starts to soar in 2023.
Risks of investing in hydrogen stocks
Investing in hydrogen stocks has both pros and cons.
One of the risks of investing in hydrogen stocks is their high volatility. Hydrogen stock prices have shown rapid growth and loss in a short duration of time, which is indicative of volatility.
Investors should research hydrogen stocks before investing. Factors to consider include market cap, future outlook, partnerships, company of origin, company history, and key figures in development.
In summary, there are several hydrogen stocks with potential for growth, including Ballard Power, Bloom Energy, Plug Power, Air Products and Chemicals, Shell, Defiance Next Gen H2 ETF, and Global X Hydrogen ETF. Investors should consider the potential of hydrogen as a clean energy solution and the growing demand for renewable energy supported by global government initiatives.