7 Hydrogen Stocks for a Greener Portfolio

Stock Market

While clean energy development has picked up steam recently, the push for environmentally friendly power sources has a long history. Particularly, scientists have targeted hydrogen-based utilities and applications because the underlying asset is the most abundant element in the universe. However, economic and practicality challenges imposed a cloud over hydrogen stocks.

Moreover, the advent of battery electric vehicles (EVs) pushed hydrogen-based innovations to the sidelines. At the moment, EVs appear much more practical than the hydrogen alternative, such as fuel cell electric vehicles (FCEVs). Nevertheless, EVs have some weaknesses that investors shouldn’t ignore, which cynically might bolster hydrogen stocks.

First and foremost, current EV technology can’t touch the energy density of hydrogen FCEVs. Hydrogen features an energy density of 120 megajoules per kilogram (MJ/kg). This is far more than either gasoline (45.8 MJ/kg) or diesel (45.5 MJ/kg). To use a military analogy, hydrogen stocks are the U.S. Marine Corps of the energy sector, with the underlying companies doing more with less.

Second, hydrogen-powered vehicles can refuel much quicker than their electric counterparts. According to rmi.org, a hydrogen-based commercial truck can refuel in less than 15 minutes. That’s just not going to happen with an electric-powered equivalent. Combined with hydrogen’s energy density, these transportation vehicles can travel longer distances with less frequent downtime.

Lastly for the positives, hydrogen FCEVs generate zero carbon emissions — the only aftereffects are water vapor and warm air. Therefore, it fits perfectly with President Joe Biden’s administration’s push for clean energy solutions. And with that, here are seven hydrogen stocks to consider.

  • Bloom Energy (NYSE:BE)
  • Ballard Power Systems (NASDAQ:BLDP)
  • Ceres Power (OTCMKTS:CPWHF)
  • SunHydrogen (OTCMKTS:HYSR)

Before we dive in, you should be aware that hydrogen stocks are risky mainly because economic viability at scale is a theoretical exercise. So far, government institutions and major corporations have collectively not been willing to make the necessary investment to implement hydrogen infrastructures. Still, that could change and the potential of this paradigm shift has many speculators excited about this industry.

Hydrogen Stocks: Bloom Energy (BE)

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One of the more compelling hydrogen stocks available, Bloom Energy first caught my eye for its “AlwaysON” microgrid solution. Featuring a simple and elegant design that delivers clean on-site power, Bloom’s services will particularly come in handy during rolling blackouts and other energy grid disruptions.

In fact, we’ve already seen two major cases of power outages, first in California last summer and earlier this year from the Texas winter storm. Theoretically, the latter event really should have lifted the narrative of microgrid infrastructures. Instead, likely due to misinformed popular opinion, BE stock tumbled since the cold snap as key political and media figures blamed renewable energy.

Once we get over this misconception, I believe BE stock will have a much brighter future. In July 2020, Bloom Energy announced a partnership with SK Engineering and Construction to advance hydrogen commercialization, specifically introducing hydrogen-powered fuel cells and electrolyzers that produce renewable hydrogen in SK’s native South Korean market.

To be fair, shares are still risky. Since hitting a peak this year of $44.95 on Feb. 8, BE is down more than 39%. At the same time, you can also look at this red ink as an opportunity to get involved with one of the more promising hydrogen stocks at an attractive entry point.

Ballard Power Systems (BLDP)

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Many decades from now, it’s entirely possible that if its intended purpose reaches commercial success, that historians will regard Ballard Power Systems as one of the godfathers of hydrogen stocks. You see, Ballard is on a mission to convince the world that hydrogen energy infrastructures at scale can deliver the clean emissions and efficiencies that our modern societies require.

For the longest time, the major knock against hydrogen stocks is that the underlying innovation is expensive — and therefore, not economically viable. The Hydrogen Council has a different take, stating that hydrogen solutions at scale can be incredibly practical. But to get there requires serious investments in infrastructure, making this green sector a bit of a Catch-22 situation.

To do its part, Ballard offers many intriguing platforms, including zero-emission fuel-cell solutions for marine vessels. In addition, the company is one of the leading providers of fuel cell stacks, modules and systems, powering buses, light rail and trucks, among many other applications.

Like other hydrogen stocks and investments in the green energy space, BLDP stock has taken a beating since early February of this year. Still, shares appear to have stabilized, enticing another look for speculators.

Hydrogen Stocks: Ceres Power (CPWHF)

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A defining feature among hydrogen stocks is that their issuing companies are very ambitious regarding their long-term goals. When you’re talking about imparting a paradigm shift in how we utilize energy, you’ve got to have some moxie. At the same time, the most successful players could end up being the names that balance ambition with realism. And Ceres Power presents a great example.

Ceres specializes in solid oxide fuel cells (SOFCs). Its proprietary SteelCell solution can enhance performance, reliability and emissions production via using existing infrastructure (i.e. conventional fuels like natural gas). This allows SteelCell to be a force multiplier. For instance, Ceres’ platform can add range to an electric vehicle while limiting carbon emissions. Naturally, this adds to the productivity output for commercial fleets that have transitioned to electric-powered trucks.

But the beauty of Ceres SOFC is that it’s also compatible with renewable fuels, such as biogas, ethanol and of course hydrogen. Therefore, the company offers a scalable platform as the world potentially transitions toward hydrogen energy.

Still, CPWHF stock currently trades underneath its 50-day moving average. So, you’ll want to be careful how you approach this.


Source: Dorothy Chiron / Shutterstock.com

Although I disagree with the notion that renewable energy sources were responsible for the blackout during the devastating winter storm in Texas, I can also appreciate why that narrative appealed to some people. Indeed, when you see frozen wind turbines, you can’t help but wonder about the reliability and dependability of green energy.

Still, it’s an unfair argument because we’ve known since day one that the biggest drawback for wind and solar power is that they are intermittent sources. Obviously, the wind doesn’t blow 24/7 nor does the sun shine all day. But this intermittency makes companies like ITM Power that much more compelling.

If you’re looking for viable hydrogen stocks, you should give ITMPF stock a closer look. That’s because the underlying company offers an intriguing and relevant grid balancing service. Typically, when power demand spikes up, the grid depends on gas- or coal-based powerplants to address the surge. Clearly, this can cause problems if wind and solar power are unavailable for whatever reason.

However, hydrogen can be stored longer term, facilitating on-demand power solutions. Of course, there’s still fine-tuning involved, but ITMPF stock offers compelling exposure to the future of hydrogen at an attractive price.

Hydrogen Stocks: Nel (NLLSY)

Source: Videomatic/Shutterstock.com

One debate you may not want to participate in is the EV versus combustion engine debate. Personally, I find many EV owners to suffer from what I would term Greg Gutfeld syndrome. I might agree with the EV proponents’ thesis. But the typical smug delivery makes me want to teleport through the screen Sadako style and beat the feces out of them.

But another debate you don’t want to touch is the FCEV versus EV matchup. It gets very ugly. But from a petrol head’s perspective, it seems that the battery EV guys have this battle won. But the war may not be over.

That’s because range and charging time remain the Achilles’ heel of EVs. Sure, solid-state batteries may resolve this issue but that’s probably a long ways off. Here, FCEVs lever a distinct advantage, typically featuring longer range and much faster refueling times (about five minutes).

But a huge obstacle for FCEVs is infrastructure or lack thereof. That’s where Norwegian firm Nel comes into the picture. With its hydrogen fueling equipment, Nel could potentially be one of the front runners in the global hydrogen infrastructure buildout.

It’s ambitious for sure. But if you don’t mind the volatility risks, NLLSY stock should be on your radar.

AFC Energy (AFGYF)

Source: Alexander Kirch / Shutterstock.com

One of the most aspirational companies on this list of hydrogen stocks, AFC Energy is a speculative investment. There’s really no way to sugarcoat this. Listed on the over-the-counter exchange and priced at time of writing under a buck, AFGYF stock is a gamble. But what I like about it is that the underlying science is very intriguing.

AFC’s core business revolves around its alkaline fuel cell technology. Through an electrochemical combination of hydrogen and oxygen, AFC fuel-cell solution produces electricity, heat and water — it’s like having your cake and eating it too.

Better yet, the specific benefits of alkaline fuel cells are plentiful. First and foremost, the platform allows the use of lower purity and cheaper hydrogen, promoting superior practicality. Second, its more resilient to carbon monoxide, carbon dioxide and other fuel contaminants. As well, AFC develops its alkaline fuel cells with low-cost materials, improving the economic proposition.

Finally, alkaline fuel cells enjoy a long operational life cycle. Because we’re in the early stages of the hydrogen race, AFGYF stock doesn’t generate as much attention as other green energy companies. However, that could change in a hurry so keep close tabs on AFC Energy.

Hydrogen Stocks: SunHydrogen (HYSR)

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Historically and presently, what has prevented hydrogen from enjoying mainstream integration is that the process to acquire usable hydrogen energy itself requires energy. And that usually means carbon emissions, defeating the purpose of a supposedly clean energy platform.

Yes, fuel cells as we discussed above provide a scientific solution to the above Catch-22. But fuel cells are expensive and without broader investment, may end up failing. This is where SunHydrogen claims to have a groundbreaking solution.

According to its website, SunHydrogen developed a new technology to make renewable hydrogen using sunlight and any source of water. Potentially, this will do away with the conventional processes of generating hydrogen, which result in CO2 emissions.

If this is true, this could be the gamechanger we’re all looking for. However, I’m not holding my breath. As a pure penny stock, HYSR is incredibly risky. Still, with perhaps some social media attention, this could potentially skyrocket.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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.

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