The 3 Most Undervalued Hydrogen Stocks to Buy Now: August 2023
The world is undergoing a major transition that is set to change the way we live, work, and travel. This is the period of some of the biggest changes in the economy. Right from the adoption of electric vehicles to the switch towards renewable sources of energy, there is a lot to look forward to with regard to a cleaner and greener planet. One green power source that is making big news is hydrogen. Hydrogen-fueled power systems are high in demand as governments try to promote the use of the element. This has led to the rise of must-buy hydrogen stocks.
Although on a small scale, we can see the adoption of hydrogen across different countries. In the United States, the Inflation Reduction Act has given a boost to hydrogen industries with a production tax credit. As a result, publicly traded companies are banking on hydrogen power and are set to gain in the long term. Investors who like to enjoy an early mover advantage might want to consider investing in these must-buy hydrogen stocks before they soar.
Plug Power (PLUG)
One of the best August hydrogen stocks picks, Plug Power (NASDAQ:PLUG) has a lot working for it. The company is a provider of hydrogen fuel cell solutions that can help replace traditional batteries in vehicles and equipment. Looking ahead, hydrogen fuel cells could see a massive rise in demand. Plug Power has already formed partnerships with some of the biggest players in the industry including Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN).
This is one reason to invest in the stock as it shows the company’s potential to meet the demands of the stalwarts. The company has also impressed investors with its financials. It reported the largest quarterly revenue in the company’s history at $260.2 million, up 72% year over year. It still reported a negative EPS of 35 cents. The management expects revenue of $1.2 billion – $1.4 billion this year. The stock is one of the best hydrogen stock bargains for 2023. PLUG stock is trading below $10 and this is a solid chance to load up on it. Trading at $8.84 today, the stock is much lower than the 52-week high of $31 and this means there is ample upside potential.
The company has a few global deals that can help generate revenue in the coming quarters. It has secured an order for 100 megawatts of PEM electrolyzers in Europe and has another order of two 5 megawatts of electrolyzer units in Australia. When it comes to the hydrogen industry, we are still in an early stage and once its demand rises, Plug Power will significantly gain.
While the company is still unprofitable, it is walking in the right direction, and with an increase in the use of hydrogen, the company will benefit. PLUG stock below $10 is a good opportunity to boost your portfolio.
Linde (LIN)
A personal favorite, I’ve already recommended Linde (NYSE:LIN) in the past. The company is a leader in industrial chemicals and gases and has become a significant part of the hydrogen production and distribution process. Linde operates about 80 hydrogen plants across the world and has 200 hydrogen refueling stations. If you are looking for an established company in the hydrogen industry, Linde is the one. The company will be providing green hydrogen for Dow’s (NYSE: DOW) plant.
In the recent quarterly results, the company saw a 3% drop in sales to $8.2 billion and the adjusted operating profit was up 27.9%. For the third quarter, it expects an EPS ranging between $3.48 to $3.58, up 12% to 15% from the previous year. Additionally, the management is set to invest between $7 to $9 billion in clean energy projects in the coming years. LIN stock is up 18% year to date and is currently trading at $377. The company is ready to cash in on the rising demand for hydrogen and has committed large capital investments towards the same. Linde stock is one of the top hydrogen investments for 2023.
It has enough liquidity to keep investing in hydrogen projects. Linde is a credible name in the industry with several years of experience. Analysts are highly optimistic about the future of the stock. An HSBC analyst has a price target of $440 with a buy rating while an Argus analyst has a price target of $463. BMO Capital has a price target of $418 and Mizuho analyst has a price target of $410. There is ample upside potential from the current level and holding this hydrogen stock for the long-term can set you up for big gains.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is another must-buy hydrogen stocks to watch out for. The company makes clean and reliable energy and has an electronic power generation platform. It is known for the Bloom Electrolyzer which can help produce clean hydrogen 15% to 45% more efficiently as compared to others. This technology can be implemented across several industries and it can also be paired with wind energy and solar energy for the generation of green hydrogen. The long-term outlook for Bloom Energy is highly positive and the company will benefit from government incentives and programs.
BE is one of the must-buy hydrogen stocks for August for several reasons. The company is in growth mode and is expanding across Europe. It recently signed the first customer in Germany and this is only the beginning. Further, its recent quarterly numbers are also impressive. It saw revenue growth of 23.8% year over year and has reiterated the full-year revenue outlook ranging from $1.4 billion to $1.5 billion. Bloom Energy reported revenue of $301.1 million, a 23% rise from the same period the previous year, and an operating loss of $54.5 million, much lower than the $102.2 loss reported in the second quarter of 2022.
With the company expecting solid revenue growth in the coming years, now is the best time to jump in on the opportunity and grab the stock. BE stock is trading at $14 today and is down 24% year to date. As the fuel cell market share increases, we will see Bloom Energy making big moves.
On the date of publication, Vandita Jadeja 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.
