The hydrogen industry is rising to prominence in the global energy complex, responding to the growing demand for clean, eco-friendly energy solutions. The sector is not only shaping the future of energy but also offering enticing opportunities for those interested in investing in hydrogen.
The industry stands on the brink of significant growth. According to Grand View Research, the global hydrogen generation market is expected to grow at a compound annual rate of 9.3% through 2030, hitting $317.39 billion.
For those interested in capitalizing on this growth while being part of the shift toward a cleaner energy future, here are three top hydrogen stocks to consider.
BP (NYSE:BP), also known as British Petroleum, is a significant oil and gas company based in London. However, BP’s interests extend beyond the conventional oil and gas domain, with the company displaying enthusiasm for hydrogen technologies.
Recently, BP launched a green hydrogen project in Spain’s Valencia region to transform the area into a leader in green hydrogen production. The HyVal project will be centered around BP’s Castellon refinery and involve the phased development of up to 2GW of electrolysis capacity by the end of the decade.
“Green hydrogen — generated by the electrolysis of water using renewable power — will support decarbonization of the refinery’s operations, replacing its current use of ‘grey’ hydrogen generated from natural gas,” the company said in its press release.
The energy stock has underperformed the market this year, rising just 2.5%. However, according to MarketWatch, analysts rate the stock “overweight” with an average target price of around $45 a share. This implies upside of roughly 26% from the current level.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG), a leading player in the green hydrogen market, designs and manufactures hydrogen fuel cell systems. These innovative systems replace traditional batteries in electrically powered equipment and vehicles.
There’s good reason for investors to be bullish on this hydrogen stock now. This week, Plug Power secured an order for 100 megawatts (MW) of Proton Exchange Membrane (PEM) electrolyzers in what the company called the “largest announced project in the oil and gas sector in Europe.”
“The Plug electrolyzers will be powered by 100% renewable energy and will generate approximately 43 tons of green hydrogen per day to replace gray hydrogen in the oil refining process,” the company’s press release said. “This will eliminate approximately 516 tons per day of CO2 (carbon dioxide).”
While not yet profitable, analysts are calling for revenue growth of 83.5% this year and nearly 53% next year. Furthermore, its current ratio is 4.4, demonstrating a lack of debt on its books.
PLUG stock is down 17% over the past year and sits nearly 60% below its 52-week high. Analysts have an “overweight” rating on shares with an average target price of $18.45, which is 44% above the current share price.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) designs, manufactures and sells solid-oxide fuel cell systems. These systems are known for their efficiency and environmental friendliness.
Bloom Energy recently launched a new application to enhance the efficiency of its Bloom Energy Server. The platform now supports Combined Heat and Power (CHP), improving system efficiency. This is a significant development. Simply put, it means that users can chart closer to their climate goals.
“Compared to older technologies including combustion engines, the Bloom Energy Server has one of the highest electrical efficiencies in the industry,” said Chief Technology Officer Ravi Prasher.
The company is expected to grow revenue in the 20% to 30% range this year and next and to turn a profit in 2024.
BE stock has trailed the broader market over the past year, rising around 13%, and it is down 5% on a year-to-date basis. However, shares could hold significant potential. Analysts rate this hydrogen stock “overweight” as well, with an average price target of $26.39. That’s 45% above the current share price.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.