While the S&P 500 was up more than 20% in 2023, it probably was not the best year for those who invested in the hydrogen sector. During aggressive interest hikes, a lot of the hydrogen companies struggled to keep revenue up and bring returns to investors. Despite a slow year for hydrogen stocks, the established global consciousness toward building a clean future with sustainable energy remains unchanged.
Investments in hydrogen could contribute to global decarbonization efforts, which is already occurring around the world. This means that hydrogen companies will grow at an exponential rate given the right macroeconomic conditions. Along with considerable financial benefits from the government, it will bring promising returns to investors in the long run.
As many investors are waiting for an interest rate cut by the Federal Reserve, which is expected to happen soon, now is a great time to invest in these three hydrogen stocks below.
Linde (LIN)
Linde (NASDAQ:LIN) is the largest industrial gas and engineering company globally with almost 200 hydrogen fueling stations as well as 80 hydrogen electrolysis plants. Headquartered in Dublin, Ireland, Linde is constantly expanding abroad. But it is also investing at home.
The gas stock plans to build the biggest electrolyzer, which will almost double the company’s sustainable liquid hydrogen production capacity in the U.S. On top of existing facilities in the U.S., Linde is also investing in a new proton exchange membrane electrolyzer. This new device will provide energy for approximately 600 fuel cell buses while producing 24 megawatts worth of energy.
Analysts are bullish about Linde stock. For instance, Citigroup upgraded Linde’s price target from $470 to $480 according to a recent research report published on Benzinga. Moreover, Wells Fargo raised the price target for Linde from $480 to $540. In terms of financials, its 1.27% dividend yield could be another buy factor for investors.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) produces hydrogen fuel cell systems with over 250 fueling stations. It is enjoying success abroad lately.
In May 2024, the company announced it would build 25 hydrogen fueling stations in South Korea. It also received approval from Korean Gas Safety for Plug’s Rochester Gigafactory for electrolyzer stack production. This makes it Plug Power’s first internationally approved performance certification, which also opens up the possibility to expand globally in the future.
Additional exciting news for Plug Power comes domestically. Last month, the U.S. federal government agreed to grant Plug Power tax credits for a hydrogen plant built in Georgia earlier this year. This facility is the largest hydrogen plant in the U.S. and has been extremely effective in reducing cost for Plug Power.
While the company is still not profitable, with the financial help from the government and expansions abroad, Plug Power will soon bring massive returns to investors.
Ballard Power Systems (BLDP)
Ballard Power Systems (NASDAQ:BLDP) specializes in proton exchange membrane (PEM) fuel cell products. It has applications in power generation, portable power and transportation. Specifically, it has had major success after making a long-term deal with a European bus manufacturer called Solaris Bus & Coach where Ballard Power Systems supplied 1,000 hydrogen fuel engines.
Additionally, Ballard Power Systems shows promising results in recent financial releases. In the first quarter of 2024, the company had 9% revenue growth compared to a year ago. Notably, revenues from buses increased by a substantial 206%, which contributed to an overall 22% growth in heavy-duty mobility revenue. In just four years, Ballard Power Systems is expected to almost 6x its revenue.
Moreover, the company is seeing increases in gross margins and order backlog, which suggests a bright future. With so much growth potential, Ballard Power Systems should be one to watch for investors.
On the date of publication, Andy Kim did not have (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.