Wall Street Favorites: 7 Hydrogen Stocks with Strong Buy Ratings for April 2024 

Stocks to buy

Investors may want to pay close attention to hydrogen stocks.

All as the U.S. fights to make hydrogen happen. For one, according to Energy Secretary Jennifer Granholm, as noted by E&E News, the “Treasury Department would come out with a ‘final rule shortly’ referring to guidance for companies to obtain new hydrogen tax credits under the Inflation Reduction Act known as 45V.”

Companies like Exxon Mobil (NYSE:XOM) have already said they won’t proceed with low-carbon hydrogen projects if the Biden Administration withholds tax incentives for natural gas-fed facilities, said CEO Darren Woods, as noted by WorldOil.com.

Two, the Department of Energy recently announced $750 million in funding for 52 projects across 24 states to help get hydrogen going. And three, as noted by NatLawReview.com, clean hydrogen is key to achieving the U.S. goal of a 100% clean electrical grid by 2035, and net-zero emissions by the time 2050 rolls around.

Should things progress well, hydrogen stocks should explode higher. In fact, here are seven top hydrogen stocks you may want to consider.

Air Products and Chemicals (APD)

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One of the top hydrogen stocks to buy and hold is Air Products and Chemicals (NYSE:APD).

For one, with a yield of 3%, it recently announced a dividend of $1.77, which is payable on May 13 to shareholders as of April 1. Two, Air Products Chairman and Chief Executive Officer Seifi Ghasemi recently said the company expects to return about $1.6 billion to shareholders in 2024, extending its track record of more than 40 years of increasing the dividend.

Helping, analysts at Wolfe Research just initiated coverage of APD with an outperform rating. Citi analysts also raised their price target on APD to $285 a share, with a buy rating. 

Even Bank of America says APD is a buy with a price target of $272. That upgrade, according to Investing.com, “reflects a positive reassessment of the company’s valuation in comparison to its peer, Linde, a reduced perception of risk in its speculative project backlog, and a stronger belief in the resilience of its base business.”

Linde (LIN)

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Another one of the top hydrogen stocks to buy is Linde (NASDAQ:LIN), a global industrial gases company that yields 1.23%. Granted, it’s a $453 stock, there’s still plenty of upside remaining here. 

Helping, analysts at Mizuho recently raised their price target on LIN to $510 from $503. BMO Capital also raised its price target to $510. 

The firm cited Linde’s “thriving business,” and company leadership keen on delivering returns to shareholders and exploring growth opportunities. “These factors, coupled with Linde’s substantial free cash flow (FCF), are expected to support the company’s trajectory of double-digit earnings per share (EPS) growth,” said the firm, as noted by Investing.com.

In its most recent quarter, the company posted earnings per share of $3.59, which beat by nine cents. Revenue of $8.3 billion – up 5.1% year over year – beat by $230 million. Moving forward, LIN expects to adjusted EPS to fall in a range of $3.58 to $3.68, which is below consensus of $3.72. For the full year, it expects to posted adjusted EPS of $15.25 to $15.65. The consensus estimate is $15.45, and represents growth of 8% to 11%.

Bloom Energy (BE)

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Since bottoming out at around $8.95, shares of Bloom Energy (NYSE:BE) rallied to a recent high of $12.51. And while it has since backed off to about $11.38, it’s getting positive attention. 

Analysts at Evercore, for example, initiated an outperform rating on the BE stock, with a price target of $21 a share. “Combined with wind, solar, nuclear, and other renewable resources, Bloom is positioned for longer-term growth in green hydrogen, a principal fuel for a low-carbon future,” said the analysts, as quoted by Investing.com.

Truist also just upgraded Bloom Energy to a hold with a price target of $11 a share. The company was also just awarded up to $75 million in federal tax credits to expand fuel cell and electrolyzer production capacity at its Fremont, California manufacturing plant. Reportedly, that facility can produce more than 1 GW/year. 

Even better, the company is working with Shell (NYSE:SHEL) to study decarbonization solutions using Bloom’s hydrogen electrolyzer technology.

Ballard Power (BLDP)

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Ballard Power (NASDAQ:BLDP) has been interesting. Since bottoming out at around $2.70, the stock has since gapped to a recent high of $3.38. From here, if it can break above resistance at $3.38, it could potentially retest $3.80 near term. 

Helping, the company just received $40 million in Department of Energy grants to support its build-out of an integrated full cell production Gigafactory in Texas. Plus, Ballard just announced its biggest order in company history after signing a long-term supply agreement with Solaris Bus & Coach for 1,000 hydrogen fuel cell engines for the European transit bus market.

“These engines are expected to be deployed in buses across Europe where Solaris buses powered by Ballard fuel cell engines currently operate in over 22 European cities,” added the company press release

We’ll get a better idea of how the company is doing, with guidance when it releases first quarter earnings on Tuesday, May 7 at 11am EST.

Plug Power (PLUG)

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We can also look at beaten-down shares of Plug Power (NASDAQ:PLUG).

For one, according to the company, it has resolved its “going concern issue.” In fact, according to a company press release, “Plug has resolved the going concern issue as previously disclosed in the Form 10-Q for the quarter ended September 30, 2023, and has concluded that there is no longer substantial doubt of the Company’s ability to continue as a going concern.”

Two, the company’s revenue ballooned to $891 million in 2023, a 27% jump year over year. In addition, while Evercore ISI cut its price target on PLUG to $6 from $9, it still has an outperform rating on the stock. Also, with its production facility online it will reportedly be able to produce 15 tons of green hydrogen per day, and to about 40 tons by year-end. 

And it expanded its partnership with Uline, which will include ”the integration of on-site hydrogen infrastructure with the installation of a 18,000-gallon hydrogen storage tank and 17 hydrogen dispensers to service four distribution centers within the campus. The partnership also includes the addition of 250 fuel cell forklifts that will operate on hydrogen generated on-site through Plug’s state-of-the-art infrastructure,” as noted in a press release.

Direxion Hydrogen ETF (HJEN)

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Or, if you want to gain bigger exposure to hydrogen, there’s always an exchange traded fund (ETF), like the Direxion Hydrogen ETF (NYSEARCA:HJEN).

With an expense ratio of 0.45%, the ETF offers exposure to about 30 hydrogen stocks with a focus on hydrogen production and generation, storage and supply, fuel cells and batteries, in addition to systems, solutions, membranes, and catalysts. Some of its top holdings include Bloom Energy, Air Liquide (OTCMKTS:AIQUY), Ballard Power, Linde, and Plug Power.

What’s nice about an ETF like HJEN is that it offers solid exposure to multiple hydrogen names at a low cost. For example, if I wanted to make 100 shares of HJEN, it would cost me close to $1,100. If I were to buy just one of the ETF’s holdings such as Linde, for example, it would cost me closer to $4,540. I’d rather pay $1,100 for greater exposure to hydrogen.

Global X Hydrogen ETF (HYDR)

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Or, you could always diversify with the Global X Hydrogen ETF (NASDAQ:HYDR).

With an expense ratio of 0.5%, the ETF invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells. Some of its top holdings include Bloom Energy, Plug Power, Ballard Power, ITM Power (OTCMKTS:ITMPF) and Ceres Power (OTCMKTS:CPWHF).

While its chart is a bit ugly, give it time. With a good deal of excitement in hydrogen, HYDR could easily bounce well off its current lows. Last trading at $5.60, I’d like to see it triple from here when hydrogen names start to take off again. According to Goldman Sachs and Bank of America, hydrogen could potentially be a $12 trillion market.

In addition, according to the International Energy Agency, global hydrogen demand will need to double from about 94Mt in 2021 to more than 180 by 2030. Europe may need to see a six-fold increase in demand by 2050. 

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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