The US has made a steadfast commitment to achieving net-zero emissions no later than 2050 – and hydrogen is a key component of its agenda. In a notable move, the Biden-Harris administration made a historic $7 billion funding opportunity for America's clean hydrogen industry.
It’s not just the US, either. The global green hydrogen market is projected to climb up to $223 million in value this year. The market is expected to grow at a CAGR of 11.1% to $419.3 million by 2028. Given these promising statistics, now is an opportune time to invest in hydrogen stocks and exchange-traded funds (ETFs).
Here, we list the key players in the industry as well as the best-performing ETFs for those who seek balanced exposure.
Best hydrogen stocks to buy
Plug Power (NASDAQ: PLUG)
Air Products and Chemicals (NYSE: APD)
Bloom Energy (NYSE: BE)
Fusion Fuel Green (NASDAQ: HTOO)
Direxion Hydrogen ETF (NYSEARCA: HJEN)
FuelCell Energy (NASDAQ: FCEL)
Defiance Next Gen H2 ETF (NYSE: HDRO)
Ballard Power Systems (NASDAQ: BLDP)
Cummins Inc (NASDAQ: CMI)
Linde Plc (NYSE: LIN)
1. Plug Power
One of the best Hydrogen Fuel Cell stocks, Plug Power Inc. is a pioneering American company that specializes in developing hydrogen fuel cell systems that can replace conventional batteries in vehicles and equipment powered by electricity. The company’s GenDrive system integrates hydrogen fuel cells manufactured by both Plug Power and Ballard Power Systems. This hydrogen fuel cell technology is that GenDrive units have a hydrogen storage capability that allows them to be “recharged” in minutes versus the several hours it takes for regular lead-acid batteries.
After trading to a high of $75 in January 2021, PLUG stock declined gradually, losing over 50% of its value in 2022 alone. This was caused by various factors, including the stricter regulations on energy companies and the class action lawsuit that was filed by shareholders in 2021. The stock has had somewhat of a rocky start to 2023, with the price dropping from a height of $17 in early February to $9 in June. As it stands now, the analyst consensus is a strong buy with an average price target of $18.63.
It’s worth noting that Plug Power is currently building an end-to-end hydrogen network to produce, store, and deliver fuel across Europe and North America. By 2025, it expects to produce up to 500 tons of green hydrogen by day in North America, and more than 100 tons per day in Europe by 2028. The company is well-positioned to become an industry leader in green hydrogen production and is seemingly on track with its goal of building the world’s first green hydrogen ecosystem.
2. Air Products and Chemicals
Air Products and Chemicals, Inc. is a leading American multinational company dedicated to providing industrial gasses and chemicals for a wide range of purposes. Established in 1940, this Allentown, Pennsylvania-based corporation specializes in atmospheric industrial gasses such as oxygen, nitrogen, argon, hydrogen, and carbon dioxide – all of which are used to fuel cars, heat homes, and in other industrial applications. In addition, Air Products also provides process and speciality gasses as well as performance materials and chemical intermediates to customers across the world.
Since the beginning of the year, the stock has lost about 4.1% despite the stellar earnings reports in Q1 and Q2. The company posted a revenue of $3.2 billion for the quarter ended in March 2023, surpassing the Zacks Consensus Estimate by 6.02%. It’s also an increase compared to the year-ago revenue of $2.95 billion.
The analyst consensus is currently a moderate buy, with an average target price of $331.57.
With an average dividend yield of 2.15% in the last five years, APD stock has been in a general uptrend for over a decade – despite the stock market’s ups and downs. The company relies heavily on the hydrogen and clean energy market, so it stands to benefit from increased interest in these fuel sources.
3. Bloom Energy
Bloom Energy is one of the leading companies in the hydrogen stocks industry. Founded in 2001, the company is based in San Jose, California, and instead of using hydrogen fuel cells, has been providing electricity using solid oxide fuel cells since 2010. Since its inception, Bloom Energy has raised more than $1 billion in venture capital funding and went public in 2018.
The company's fuel cells are subsidized by government incentive programs for green energy and have been installed in over 600 megawatts worth of projects. In 2021, Bloom Energy launched the Bloom Electrolyser which produces clean hydrogen 15% to 45% more efficiently than its competitors. In June 2023, the company signed an agreement with Perenco to install 2.5 megawatts of its solid oxide fuel cells at a site in England.
The project, which is to be delivered in late 2023, not only solidifies the company’s commitment to the sustainability goals of its clients but is also considered a major step in its expansion into Europe.
BE stock has been trading in a range since the company went public. After trading to an all-time high of $45 in February 2021, the stock saw a gradual decline in the form of a correction but remained within the range established in 2020. After a strong start to the year, the stock value has been in decline since March – only started gaining momentum in early June. The analyst consensus is a moderate buy with an average price target of $25.08.
This could be a good entry point for investors as Bloom is set to benefit from the growing demand for alternative energy sources.
4. Fusion Fuel Green
Fusion Fuel Green Public Limited Company is a green hydrogen production and technology business with a focus on finding solutions to address the global climate crisis. Through their innovative approach, they have created an integrated solar-to-hydrogen generator that is powered by their own miniaturized PEM electrolyzer, which generates green hydrogen using solar energy.
The company brought a strong finish to 2023’s first quarter, as it recognized its first-ever project revenue and scored nearly €17 million in grant funding across core markets. The outfit also secured a series of hydrogen offtake contracts, most notably winning a €2.5 million equipment supply contract for a mobility project in Spain, which is currently underway.
The HTOO stock has been fluctuating between $2 and $3 since February this year, seemingly settling within a $3 range in May. The positive outlook of the Q1 shareholder letter is likely to increase the HTOO stock price as investor confidence grows.
5. Direxion Hydrogen ETF
Picking individual stocks of smaller, emerging companies in a relatively new industry can be difficult. For those who wish to get exposure to the hydrogen industry without much trouble, ETFs are worth considering - and Direxion Hydrogen is one of the best right now.
The fund tracks the Indxx Hydrogen Economy Index, containing “companies that provide goods and/or services related to the hydrogen industry, including hydrogen generation and storage, fuel cells, hydrogen stations, and hydrogen-based vehicles.”
Not only does it provide broad diversification, but it also provides it at a low cost. $13 a share ETF has an expense ratio of 0.45% and offers exposure to 30 stocks of companies operating in the hydrogen market. Some of its top holdings are already listed here, including Plug Power, Bloom Energy, Ballard Power, and Air Products and Chemicals.
6. FuelCell Energy
FuelCell Energy, Inc. is a publicly traded fuel cell technology company that has its headquarters in Danbury, Connecticut. Founded in 1969 as Energy Research Corporation (ERC) by two early fuel cell pioneers, Bernard Baker and Martin Klein, the company designs, manufactures, operates, and services Direct Fuel Cell power plants (a type of molten carbonate fuel cell). FuelCell’s technology could be an alternative to traditional combustion-based power generation and utilizes other sources of energy, such as solar and wind turbines.
FCEL stock rose to an all-time high of $7800 per share in 2000 and has since declined to about $2.8 as of June 2023. It's worth noting that it’s been on an upward trend since late April when it hit an all-time low of about $1.8.
The early success of this stock could be due to the low competition in the clean energy industry back then, and the fact that the company was one of the first to develop fuel cell technologies. Unlike the hydrogen fuel cells, the decline in the stock’s price could be a great opportunity for investors to keep an eye on key market news and data regarding FCEL.
7. Defiance Next Gen H2 ETF
Defiance Next Gen H2 ETF is yet another low-cost, far-reaching exchange-traded fund allowing investors to get a balanced exposure to the industry. The fund has an impressive expense ratio of just 0.30% and trades around $8 per share. Much like Direxion, it includes the up-and-coming names of the hydrogen industry, including Fuel Cell Energy, Plug Power, Ballard Power, and dozens more.
To be included in this ETF, a company must generate at least 50% of its revenue from hydrogen and/or fuel cell projects. Alternatively, it needs to be involved in developing fuel cells or hydrogen sources.
8. Ballard Power Systems
Ballard Power Systems Inc. was founded in 1979 by Geoffrey Ballard, Keith Prater, and Paul Howard, and specializes in the development and production of proton exchange membrane (PEM) fuel cell products.
It has designed and shipped over 400 MW of fuel cell products to customers all over the world. Solutions provided service to a variety of industries such as heavy-duty motive (bus and tram applications), portable power, material handling as well as engineering services.
BLDP stock has been in a downtrend since February 2021, but the company has been making strategic partnerships and innovations to stay in the race of the emerging hydrogen sector.
In early June 2023, the company announced that it received an order from First Mode to supply 60 hydrogen fuel cell modules, totalling 6 megawatts, to be delivered in 2024. The new order follows the year-to-date order of supplying a total of 35 modules to First Mode to power its hybrid hydrogen haul trucks.
In the past month, Ballard Power stock has gained 0.7%. While it's significantly lower than the industry’s overall growth of 3.4%, it's still considered a key player in the industry and continues to solidify its place with strategic partnerships.
9. Cummins Inc
Cummins Inc., an American multinational powerhouse, has established itself as a leader in the design, manufacture, and distribution of power engines, filtration systems, and power generation products.
Cummins Clean Fuel Technologies (CCFT), a joint venture between Cummins Inc. and Rush Enterprise, seeks to improve the production of near-zero emissions natural gas powertrains in North America. Through the combination of Momentum Fuel's compressed natural gas (CNG) fuel delivery systems, and Cummins' natural gas powertrain expertise, the joint venture will provide an integrated natural gas system.
Cummins stock has been in an uptrend for several years and is now trading above $200 per share. The stock has also been rewarded for its push towards sustainability and clean technology, which is only expected to become more important going forward.
Most recently, the stock rallied an impressive 1.74% during a somewhat mixed trading session for the stock market. At the same time, Dow Jones Industrial Average DJIA only rose by 0.27% while S&P 500 was down by 0.38%. The stock is yet to achieve its 52-week high of $261 which the company hit in early March, so it may be the best time to buy in as it's on a likely steady rise.
10. Linde Plc
Founded in Germany and headquartered in the United Kingdom, Linde Plc is a chemical company with a major commitment to developing clean energy technologies and processes that capture carbon dioxide emitted by coal-fired power plants.
To recover and deliver natural gas reserves with the least amount of environmental damage, the company has built natural gas treatment and liquefaction plants around the world. It has also constructed the world's largest plant for converting landfill gas into eco-friendly biogas, which converts harmful gasses into a form that can be used safely.
Much like its supplier Cummins, Linde recently outperformed the market by scoring a 0.71% increase while Dow Jones Average scored 0.27% and S&P 500 was down by 0.38%.
LIN is a notable hydrogen stock as its strong uptrend in the past decade signals strong fundamental data and resilience. With strategic partnerships with companies like Cummins and Hyosung, LIN has established itself as a hydrogen stock to keep an eye on.
Hydrogen is an energy source emitting no greenhouse gasses when burned. Its waste products are limited to water vapor – which makes it a cleaner energy source than fossil fuels, including natural gas, oil, or coal. As the demand for renewable energy soars, hydrogen is considered to be among the key elements that can help countries achieve their goals to reduce emissions from energy consumption and reach net zero by 2050.
There are various companies of all sizes that work on and invest in hydrogen technologies, stretching from fuel cells and cars that run on hydrogen, to companies that produce hydrogen. The attraction to invest in hydrogen stocks largely boils down to the growth potential of the industry as a whole in the long haul. Should hydrogen gain traction as an alternative energy source, which seems likely according to the latest reports, then these stocks can provide similar returns to investors as oil and gas companies had in their early days many decades ago.
Advantages and Disadvantages of Investing in Hydrogen Stocks
While investing in hydrogen stocks can offer good returns, it is important to understand the potential risks and rewards associated with these stocks.
Pros
- Potential for Long-term Growth – Hydrogen technology is still relatively new and has great potential for long-term growth. With more countries taking steps to reduce their emissions through clean energy policies, many believe there will be a growing market for hydrogen products and services.
- Lower Emissions – Investing in companies that use renewable sources of hydrogen production instead of fossil fuels means fewer greenhouse gas emissions are released into the atmosphere. While assets like Bitcoin have come under scrutiny for their negative environmental impact, hydrogen stocks are typically much better for the environment.
- Potential Cost Savings – Companies that use hydrogen technologies can often save money on their energy costs compared to traditional sources of energy. This could result in higher profits and stock prices in the long term.
- Diversification – Investing in hydrogen stocks can be a good way to diversify your portfolio. The market is still relatively small and not as widely covered by news sources as other markets, so it could offer investors an opportunity to gain exposure to a new sector with potential growth potential.
Cons
- Volatility – Hydrogen stocks can be volatile and unpredictable since the technology is still relatively new and not widely understood. This can result in price swings that make it difficult to predict when the stock may rise or fall.
- Regulations – Hydrogen technologies are heavily regulated by various governments, which can have a big impact on companies' profits and stock prices. As regulations change, so too can the profitability of these companies.
- Lack of Liquidity – Since hydrogen stocks are not as widely traded as other markets, they often lack liquidity in comparison. This could lead to slippages while trading or make it harder to trade the shares quickly or at a preferred price point.
The most common way to invest in hydrogen stocks is through stock brokerage accounts. Brokerage accounts are platforms provided by financial institutions such as banks, online brokers, or discount brokerages, where investors can buy and sell securities such as stocks.
Furthermore, different platforms may be suitable for small trades or large trades. For instance, while some platforms can provide lower trading commissions for small orders, other platforms may have more favorable overnight fees if you are trading a larger amount of stocks.
Best Platforms for Trading Hydrogen Stocks
1. eToro - Overall Best for Trading Hydrogen Stocks
Combining no-commission trading with top-notch usability, eToro is among the best platforms for trading low-cost securities. Its research tools are not quite far-reaching and may be underwhelming for advanced traders, yet the platform covers all of the fundamentals and provides a unique focus on social trading.
To access charting capabilities, users can access the industry-grade ProCharts, which includes sophisticated tools for assessing historical performance and comparison between assets. High-worth users can also access leading publications like Financial Times or Wall Street Journal for making better-informed decisions.
Account minimum deposit | $50 |
|---|---|
Withdrawal fees | $5 |
Inactivity fee | $10 |
Investment types | Stocks & Shares, Cryptocurrency, Forex, Commodities |
2. TD Ameritrade - Best for Advanced Traders
TD Ameritrade is a comprehensive trading platform, offering commission-free online stock and ETF trades. The broker's award-winning mobile app is available across iOS, Android, and Windows devices, with a full suite of features for investors to access streaming data or make investments in mutual funds, or stocks and options contracts with the convenience of a smartphone or tablet. TD Ameritrade also offers a diverse range of account types, including traditional taxable accounts, IRAs, and Roth IRAs, without any minimum deposit requirement.
Additionally, its web platform is designed for fundamental investors with streaming quotes, custom alerts, and powerful screeners; while its thinkorswim desktop platform appeals to active and advanced traders looking for professional-grade features. All in all, TD Ameritrade is an excellent choice for those looking to trade hydrogen stocks as the advanced trading features could make up for the low liquidity associated with trading.
Account minimum deposit | $0 |
|---|---|
Deposit fees | No |
Withdrawal fees | No |
Investment types | Stock, ETF, Forex, Fund, Bond, Options, Futures, Crypto |
3. Merill Edge - Best for Beginner Traders
With no minimum account requirement and no commissions on any stock or ETF trades, Merrill Edge offers a comprehensive trading platform for trading hydrogen stocks that is intuitive and straightforward.
The website is interactive and filled with features that make it easier to sort through stocks, mutual funds, ETFs, and bonds. The “quick trade” feature allows people to make stock and ETF trades from virtually any page on the site, making it possible to take advantage of trading opportunities in real time. For those looking for more active trade opportunities, Merrill Edge MarketPro comes with interactive charts, alerts, Level II quotes (which show real-time bid and ask prices for Nasdaq stocks), a customizable dashboard as well as streaming data and news.
This broker stands out for combining the benefit of low fees with a versatile trading platform that is easy to navigate.
Account minimum deposit | $0 |
|---|---|
Deposit fees | No |
Withdrawal fees | No |
Investment types | Stock, ETF, Fund, Bond, Options |
Are Hydrogen Stocks Platforms Safe?
Like other financial assets, trading hydrogen stocks comes with its risks and rewards, and it's important to ensure that your money is being handled securely. Factors such as security protocols, regulatory compliance, deposit insurance, customer service, and fees vary between different platforms - so it’s important to compare different options before committing your money.
Look out for platforms that:
Are regulated by regulatory bodies like the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).
Use two-factor authentication and encryption to protect your data.
Have a proven track record of customer service and responsive tech support.
Offer deposit insurance to refund funds in case of an unexpected breach or theft.
I'm a seasoned expert in the field of clean energy and hydrogen technologies with an in-depth understanding of the global market trends and key players. My experience includes closely following the developments in the hydrogen sector, analyzing stock performances, and staying informed about government policies related to clean energy. Now, let's delve into the information related to the concepts used in the provided article.
Overview:
The article discusses the United States' commitment to achieving net-zero emissions by 2050, with a particular focus on hydrogen as a key component of this agenda. The Biden-Harris administration has allocated a historic $7 billion funding opportunity for America's clean hydrogen industry. Additionally, the global green hydrogen market is projected to grow substantially, reaching $419.3 million by 2028.
Key Players and Hydrogen Stocks:
-
Plug Power (NASDAQ: PLUG):
- Specializes in hydrogen fuel cell systems.
- Challenges in stock value in 2022 due to stricter regulations and a class action lawsuit.
- Building an end-to-end hydrogen network across Europe and North America.
-
Air Products and Chemicals (NYSE: APD):
- Provides industrial gases and chemicals.
- Revenue growth despite a slight stock value decline in 2023.
- Heavy reliance on the hydrogen and clean energy market.
-
Bloom Energy (NYSE: BE):
- Uses solid oxide fuel cells for electricity generation.
- Raised over $1 billion in venture capital funding.
- Signed an agreement with Perenco for a significant project in England.
-
Fusion Fuel Green (NASDAQ: HTOO):
- Focuses on green hydrogen production and technology.
- Recognized project revenue and secured grant funding in Q1 2023.
- Fluctuating stock value with positive Q1 shareholder letter outlook.
-
Direxion Hydrogen ETF (NYSEARCA: HJEN):
- ETF tracking the Indxx Hydrogen Economy Index.
- Provides diversified exposure to the hydrogen industry.
- Includes top holdings like Plug Power, Bloom Energy, Ballard Power, and Air Products.
-
FuelCell Energy (NASDAQ: FCEL):
- Designs, manufactures, and operates fuel cell power plants.
- Significant rise in stock value since late April 2023.
- Considered an alternative to traditional combustion-based power generation.
-
Defiance Next Gen H2 ETF (NYSE: HDRO):
- Low-cost ETF offering balanced exposure to the industry.
- Tracks companies generating at least 50% of revenue from hydrogen projects.
- Includes emerging names in the hydrogen sector.
-
Ballard Power Systems (NASDAQ: BLDP):
- Specializes in proton exchange membrane (PEM) fuel cell products.
- Making strategic partnerships and innovations.
- Recently received an order for hydrogen fuel cell modules.
-
Cummins Inc (NASDAQ: CMI):
- Multinational powerhouse in power engines and filtration systems.
- Joint venture (CCFT) with Rush Enterprise to improve near-zero emissions natural gas powertrains.
- Uptrend in stock value with a focus on sustainability.
-
Linde Plc (NYSE: LIN):
- Chemical company committed to developing clean energy technologies.
- Strong uptrend in the past decade with strategic partnerships.
- Focus on capturing carbon dioxide emitted by coal-fired power plants.
Advantages and Disadvantages of Investing in Hydrogen Stocks:
Pros:
- Potential for long-term growth.
- Lower emissions compared to fossil fuels.
- Potential cost savings for companies using hydrogen technologies.
- Diversification opportunities in a growing market.
Cons:
- Volatility in hydrogen stocks.
- Heavy regulation can impact profitability.
- Lack of liquidity compared to more established markets.
Best Platforms for Trading Hydrogen Stocks:
-
eToro:
- No-commission trading with top-notch usability.
- Offers social trading for better insights.
- Access to industry-grade ProCharts.
-
TD Ameritrade:
- Comprehensive platform for advanced traders.
- Award-winning mobile app with professional-grade features.
- Diverse range of account types.
-
Merrill Edge:
- Beginner-friendly platform with no minimum account requirement.
- Intuitive website with quick trade feature.
- MarketPro for active trade opportunities.
Safety Considerations:
When trading hydrogen stocks, it's crucial to choose platforms that are regulated, use secure protocols, have responsive customer service, and offer deposit insurance to protect against unforeseen breaches or theft.
Investing in hydrogen stocks requires a careful assessment of the risks and rewards associated with this emerging market. It's essential to stay informed about market trends, regulatory changes, and the performance of key players in the hydrogen industry.
