Hydrogen – that volatile gas that, when mishandled, can cause quite a disaster. But, let’s not forget, it’s also pegged as a clean, carbon-free fuel source that’s expected to play a crucial role in our energy future. Investing in hydrogen stocks? Well, that’s been a bit like handling the gas itself – risky, with potential for explosive gains (figuratively speaking, of course).
The past couple of years haven’t been kind to some of the leading hydrogen companies, with share prices taking a nosedive. It’s enough to make anyone think twice about diving into this sector. However, for those willing to navigate the risks, the rewards could be substantial. Here are three hydrogen investments that stand out in this challenging yet promising landscape.
1. Global X Hydrogen ETF (NASDAQ:HYDR)
Diving headfirst into individual hydrogen stocks might not be everyone’s cup of tea, especially given the industry’s nascent stage. That’s where the Global X Hydrogen ETF comes into play. This ETF offers a diversified portfolio of 26 companies involved in the hydrogen space, mixing high-risk pureplay names with established industrial giants. It’s a smart way to spread your bets across the board.
With HYDR shares currently down 55% over the past year and a staggering 75% since its launch, it might seem like a tough sell. But, for those looking at the bigger picture, this dip could represent a golden opportunity. As the hydrogen market rebounds, HYDR is well-positioned to capture the upswing.
2. Air Products & Chemicals (NYSE:APD)
Air Products & Chemicals isn’t just another player in the hydrogen game; it’s a seasoned veteran with over sixty years in the business. With operations in more than 20 countries and a vast hydrogen plant network, APD is a global leader in hydrogen production and distribution.
Recent earnings may have disappointed, sending APD stock to 52-week lows, but the company’s outlook for 2024 remains strong. Beyond its hydrogen operations, APD boasts a diversified gas business that continues to be profitable, not to mention a solid 3.1% dividend yield. For those looking to invest in a company with a proven track record in hydrogen, APD presents a compelling opportunity.
3. Linde (NASDAQ:LIN)
Linde, hailing from the U.K., is another industrial gas giant with a foot firmly planted in the hydrogen sector. Unlike APD, Linde’s stock has been on an upward trajectory, reaching new highs thanks to solid earnings. While it might not be the bargain buy of the moment, Linde’s premium is justified by its ambitious hydrogen projects and turnkey gas plant solutions.
As Linde expands its hydrogen production capabilities, like the recent plant expansion in Alabama, it’s setting itself up to profit from the broader adoption of hydrogen as a fuel. Investing in LIN stock offers a lower-risk avenue to tap into the hydrogen market’s growth potential.
Wrapping Up
Hydrogen’s role in our energy future is becoming increasingly clear, and despite the sector’s volatility, there are strategic ways to invest in this clean fuel source. Whether you’re looking for diversified exposure through an ETF, a veteran player with a solid dividend, or a company expanding its hydrogen footprint, there’s an option out there for you.
