Wall Street’s Favorite Hydrogen Stocks? 3 Names That Could Make You Filthy Rich

Stocks to buy

Plug Power (NASDAQ:PLUG) is the first company to come to mind when discussing favorite hydrogen stocks. However, the story has not been delivered as expected. PLUG stock has been down almost 70% in the last 12 months. The plunge in the stock is not a reflection of the broad industry sentiment. The hydrogen economy will likely witness big investments and healthy growth in the next five to 10 years.

Here are three of my favorite hydrogen stocks to buy for massive value creation by 2030.

Air Products and Chemicals (APD)

Air Products (APD) logo on the Arts Quest building, Air Products is a sponsor of Air Products Town Square at Arts Quest in Bethlehem, PA

Source: Andy Borysowski / Shutterstock.com

Air Products and Chemicals (NYSE:APD) is a blue-chip stock trading company with attractive valuations. APD stock trades at a forward price-earnings ratio of 19.4 and offers a dividend yield of 2.93%. With a strong balance sheet, the company is investing in the hydrogen economy. This is likely to create wealth for investors in the coming years.

Regarding investments, Air Products is building Louisiana’s world’s largest blue hydrogen production facility. The investment towards this project is $4.5 billion, with operations commencing in 2026.

In Dec. 2022, AES (NYSE:AES) and Air Products announced plans to build a green hydrogen production facility in Texas. The target investment for this project is $4 billion.

Further, the NEOM Green Hydrogen company is an equal production joint venture between ACWA Power, Air Products and NEOM. This is likely to be the world’s largest green-hydrogen-based ammonia production facility. The production capacity of carbon-free hydrogen is likely to be 600 tonnes per day.

Air Products is involved in some big projects. This will translate into long term revenue growth and cash flow upside.

Linde (LIN)

Logo of Linde AG (LIN) in Hanover, Germany - The Linde Group is a multinational chemical company

Source: nitpicker / Shutterstock.com

Linde (NASDAQ:LIN) stock has trended higher in the last 12 months and sustained positive momentum is expected. Further, the stock offers a dividend yield of 1.19%.

As an overview, Linde is an industrial gas company offering atmospheric gases, including oxygen, nitrogen, argon, and hydrogen. In 2023, Linde announced the intention to invest $7 to $9 billion in the next two to three years. Linde plans to spend $3 billion to convert 11 to 13 existing assets to clean hydrogen as a part of the investment.

It’s worth noting that Linde already has expertise in the hydrogen sector. The company operates the world’s first high-purity hydrogen storage cavern. Further, Linde has close to 200 hydrogen refueling stations and 80 hydrogen electrolysis plants worldwide. This expertise will help Linde make significant investments in the coming years as the demand for hydrogen swells. The first world-scale blue hydrogen project was awarded to Linde.

From a financial perspective, Linde reported an operating cash flow of $2.7 billion for Q4 2023. With an annual OCF potential of over $10 billion, the company has high financial flexibility to invest in big projects.

Bloom Energy (BE)

BE stock Bloom Energy logo on a building

Source: Sundry Photography / Shutterstock

Bloom Energy (NYSE:BE) is attractive among the relatively smaller players. Notably, BE stock has declined by 44% in the last 12 months. This correction is a good accumulation opportunity for long term investors.

In recent news, Bloom Energy signed an agreement with Shell (NYSE:SHEL). Under the agreement, the partners will “study decarbonization solutions, utilizing Bloom’s proprietary hydrogen electrolyzer technology.” It’s worth adding that Bloom’s solid oxide electrolyzer (SOEC) systems can produce clean hydrogen at scale. Shell assets will use the hydrogen produced. The partnership with a blue chip is likely to yield results in the form of growth acceleration.

For 2023, Bloom Energy reported revenue of $1.3 billion, which was higher by 11.2% on a year-on-year basis. This year, the company has guided for revenue of $1.5 billion and gross margin expansion. As demand for the company’s solid oxide electrolyzer system swells, I expect revenue growth acceleration to continue.

On the date of publication, Faisal Humayun did not hold (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 Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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