3 Hydrogen Stocks to Buy Now: June 2024

Stocks to buy

The hydrogen industry is still waiting on the Biden-Harris Administration to loosen restrictive 45V tax credits. And from the looks of it, industry executives are quickly starting to run thin on patience.

“The pace of change is starting to impact project development,” according to Rushabh Shah, director of U.S. Midwest Hydrogen and CCS at BP, as quoted by E&E News. However, if and when the 45V tax issue is resolved, some of the top hydrogen stocks to buy could easily explode higher.

Plus, the Biden Administration could get one step closer to cutting emissions, as hoped. Remember, hydrogen – which only produces water vapor and warm air – is a key part of helping the U.S. achieve its net-zero emission goals. 

Again, with hopes that 45V will be loosened, investors can use hydrogen stock weakness as an opportunity to buy. So, let’s examine a few of the top hydrogen stocks that investors may want to consider buying today.

Air Products and Chemicals (APD)

Source: Andy Borysowski / Shutterstock.com

On March 18, I said, “I’d like to see Air Products and Chemicals (NYSE:APD) refill its bearish gap around $260 initially. From there, it could easily test $272 as the hydrogen story gains momentum. As we wait for the stock to recover, we can collect its dividend of $1.77.”

At the time, APD traded at $243. Today, after testing a high of $286.61, it’s back to $272.26, where it’s again an opportunity. Also, as investors wait for APD to test higher highs, they can collect its current yield of 2.58%. Plus, if you own the stock by July 1, you can collect its latest dividend of $1.77 by Aug. 12.

Also, APD is getting a boost after signing a 15-year agreement to deliver about 70,000 tons per year of green hydrogen to Total Energies’ European refineries by 2030.

Linde (LIN)

Source: nitpicker / Shutterstock.com

Weakness in Linde (NASDAQ:LIN) is also a strong opportunity to buy. After plunging to about $412.30, it’s slowly trending higher, last trading at $440.53. That just refills its bearish gap from late April. From that price, I’d like to see LIN retest its $475 high from March. And, as we wait for that to happen, we can collect Linde’s current yield of 1.26%. 

Furthermore, analysts at Bernstein reiterated their buy rating on LIN with a price target of $525.

Recent earnings were okay. In fact, its earnings per share (EPS) of $3.75 came in better than estimates for $3.42. Unfortunately, its operating cash flow of $1.95 billion did miss expectations for $2.46 billion. Moving forward, the company expects to see second-quarter EPS within a range of $3.70 to $3.80, which is 1% below expectations. 

Fortunately, most of the earnings negativity has been priced into the up-trending stock.

Global X Hydrogen ETF (HYDR)

Global X Funds logo. (PRNewsFoto/Global X Funds)

Or, you could always diversify with an exchange-traded fund, like the Global X Hydrogen ETF (NASDAQ:HYDR).

With an expense ratio of 0.5%, the ETF invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells. Some of its top holdings include Bloom Energy (NYSE:BE), Plug Power (NASDAQ:PLUG), Ballard Power (NASDAQ:BLDP), ITM Power (OTCMKTS:ITMPF) and Ceres Power (OTCMKTS:CPWHF).

Last trading at $27.05, it’s a buy on weakness. From that price, I’d like to see it triple when hydrogen names start to take off again. Eventually, if and when the 45V tax credit is loosened, the ETF and related stocks will soar again.

Plus, according to the International Energy Agency, global hydrogen demand will need to double from about 94 million tons in 2021 to more than 180 million tons by 2030. Europe may need to see a six-fold increase in demand by 2050. All of which is bullish for the ETF.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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