Hydrogen energy has become a leading alternative energy source, especially with growing concerns about climate change and rising energy costs. While the developments on efficiently converting hydrogen to energy have been ongoing, we’ve seen companies continue to push to make this a leading energy alternative to combat carbon footprint and energy costs. As the market evolves, many investors are looking into hydrogen stocks to buy, hoping to capitalize on this emerging technology’s potential for substantial growth.
While the industry is well on its way to maturity, hydrogen could still take years to become accepted as a primary energy source. Getting in early could be one of the best times to start looking for hydrogen stocks to buy while it’s still early.
In this article, I will look at three hydrogen stocks at the forefront of revolutionizing the energy markets with hydrogen. To get my list, I screened for stocks using the following criteria: a minimum 10% annual revenue growth and an analyst rating of buy or above.
I then sorted the list by revenue growth from highest to lowest. Here are the results:
Chart Industries (GTLS)
Chart Industries (NYSE:GTLS) is a leader in the hydrogen market. It offers storage and distribution services and provides equipment for processing various gases.
The company recently announced the first successful LNG delivery using its IPSMR process technology in Altamira, Mexico. This signifies a milestone for its Fast LNG process. Additionally, Chart Industries won a contract to supply Repsol, a Spain-based energy company, with its Howden hydrogen compression solutions.
The company has been doing well financially. FY 2023 Sales shot up from $1.61 billion in 2022 to $3.35 billion in 2023, translating to an impressive 108% growth year-over-year.
And today, Chart Industries continues to deliver. In Q1 2024, orders increased by 4.3% YOY to $1.12 billion, while sales grew 17.4% to $950.7 million.
The company also maintains a strong outlook. 2024 sales are expected to end between $4.7 and $5.0 billion. Meanwhile, adjusted EBITDA is expected to be $1.175 to $1.30 billion.
“We are extremely pleased with the integration of Howden, having exceeded our year-one commercial and cost synergies targets ahead of schedule,” said CEO Jill Evanko. “This is one of many contributors to our above-market growth and increasing operating margin profile as we provide more full solutions to customers.”
Wall Street analysts rate GTLS stock as a strong buy with a 12-month high target of $235 (91% higher than the stock’s current trading price). So, if you are looking for hydrogen stocks to buy, consider GTLS.
Plug Power (PLUG)
Known for its affordable green hydrogen and industry-leading electrolyzers, Plug Power (NASDAQ:PLUG) specializes in an end-to-end green hydrogen ecosystem. The company offers commercially viable fuel cells, hydrogen product solutions, and electrolyzers used in various industries.
Plug Power has previously announced the completion of 95MW of Plug electrolyzer systems globally, a new PEM electrolyzer capacity milestone in the industry. In addition, Plug Power has announced that it has deployed 13 hydrogen refueling stations in Europe over the past 24 months.
For more information about why Plug Power might be a good buy, let’s look at its 2023 financials, which reported substantial growth and operational milestones. The company achieved a record revenue of $891 million, up 27% year over year, thanks to strategic partnerships with major companies like Walmart, Home Depot, and Amazon.
Investors looking for hydrogen stocks might also be interested in knowing that Wall Street analysts also rate PLUG stock as a buy with a high target of $18 (or about 842% higher than today’s trading price).
Cummins (CMI)
While historically not a hydrogen company, Cummins (NYSE:CMI) is serious about carving a footing outside diesel engines. The company’s subsidiary Accelera focuses on zero-emission solutions, hydrogen production technologies, and manufacturing electrified power systems.
Accelera was recently awarded $75 million to convert a portion of its manufacturing space at its Columbus Engine Plan or electric powertrain systems and zero-emissions components, highlighting the strength of its expertise. Not only that, the company has also announced its new, fuel-agnostic Powertrain Test Facility at the Darlington, U.K. campus, which will help its strong pivot to hydrogen and electrification.
Cummins’ 2023 year-end report was a bit mixed. Revenue increased from $28 billion to $34 billion, while net income dropped from $2.1 billion to $735 million. The company attributed the significant contraction in its bottom line to a $2.04 billion expense for resolving U.S. regulatory claims, along with retirements and separations of several programs and subsidiaries, including Atmus.
Cummins’ investment in hydrogen is gaining Wall Street’s attention, as evident by its consensus buy rating with a high target of $349 (or about 22% higher than today’s trading price). If you are looking to buy strong hydrogen stocks, have a look at CMI.
On the date of publication, Rick Orford 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.