The 3 Best Hydrogen Stocks to Buy in November
As we enter the halfway point of November, investors looking to capitalize on the burgeoning hydrogen market should consider these top three hydrogen stocks. Each has shown promising potential in an industry poised for growth as the world shifts towards cleaner energy solutions.
So here are the best hydrogen stocks to consider.
New Fortress Energy (NFE)
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New Fortress Energy Inc (NASDAQ:NFE) is shaking the energy scene, especially in the hydrogen market. Its recent financial report is impressive, with Q3 2023 adjusted EBITDA of $208 million and a whopping $895 million for the first nine months of the year.
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As for earnings, they hit $62 million in Q3 and a whopping $334 million in the first nine months. And earnings per share? $0.30 in Q3 and $1.78 in the first nine months, fully diluted.
What’s getting attention is their operating prowess. They have gone from having most cargoes open to having nearly 100% of assets under contract. They are proving their worth by operating at 98% in Palo Seco, Puerto Rico, and connecting more than 200 MW in San Juan. It has also completed major projects, such as the FLNG in Altamira, Mexico, and has reached the delivery date for its 135 MW power plant in La Paz.
Looking ahead, NFE is poised to expand and raise more money. It has closed a US$575 million financing deal with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), Lumina Capital Management, and BTG Asset Management. This cash injection will be used to complete its 630 MW Barcarena power plant, located next to its LNG import terminal at the mouth of the Amazon River.
In another power move, NFE is getting serious about selling non-strategic assets, aiming to pocket around $1 billion. This signals a strategic shift toward debt reduction. Its corporate strategy screams “operations, cash, and get rid of debt.” Moreover, it’s not just about cash; it’s about modernizing its LNG import terminals.
The Energos Celsius will become an FSRU in November, and they are preparing to charter Petrobras’ Energos Winter FSRU, which will enter service in December 2023. This FSRU will be an essential part of NFE’s LNG import terminal in Santa Catarina, Brazil, which is expected to start operations in early January 2024.
Andrew Dete, the bigwig at New Fortress Energy, can’t contain his enthusiasm for the TGS terminal in Santa Catarina. He calls it a golden opportunity, with its pipeline connection in southern Brazil offering an array of power and gas supply opportunities. With all these strategic moves and its commitment to green energy, NFE is making waves. It’s also one of those hydrogen stocks to consider.
Fuelcell Energy (FCEL)
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FuelCell Energy (NASDAQ:FCEL) is a company dedicated to revolutionizing clean energy by developing and deploying fuel cell technology. Despite the financial challenges it faced in the third quarter of 2023, with revenues falling to $25.5 million and a net loss per share of $0.06, the company remains resilient in its pursuit of sustainable solutions.
Of particular note is its collaboration with EDF Energy in the Bay Hydrogen Hub consortium, which explores the use of hydrogen to decarbonize asphalt production. By combining FuelCell Energy’s 1-megawatt solid oxide electrolyzer cell with nuclear heat and electricity, the consortium aims to create a cost-effective method for bulk hydrogen production, thus contributing to a greener future.
FuelCell Energy is also a key player in a project awarded by the Ontario Independent Electricity System’s Hydrogen Innovation Fund. In collaboration with Kinectrics and Bruce Power, the company is participating in a pilot initiative evaluating low-carbon hydrogen technologies to improve the reliability of Ontario’s power grid. The project explores hydrogen production for heavy-duty vehicles and examines the use of solid oxide fuel cells for power generation. This makes it one of those hydrogen stocks investors should pay attention to.
Despite financial setbacks, FuelCell Energy’s dedication to innovative projects underscores its role in the ongoing transition to cleaner energy solutions. Investors can find value in the company’s resilience and active contribution to the advancement of hydrogen technologies, even amid financial difficulties. FCEL’s commitment to sustainability positions it as a player with the potential for growth and impact in the changing clean energy landscape.
Air Products (APD)
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Air Products & Chemicals (NYSE:APD) is a leading company specializing in the production and supply of industrial gases and technology solutions. Why is it so attractive to invest in November? Its financial results are impressive, with adjusted earnings per share up a solid 12% to $11.51 in FY2023. This signals robust financial performance and a steady company profitability improvement.
But APD is not just about numbers. It is leading the way to a more sustainable future. They issued green bonds, becoming the first U.S. chemical company to categorize green and blue hydrogen projects as eligible expenditures. In addition, they are building the world’s largest green hydrogen-based ammonia production facility, an $8.4 billion project that marks a shift to cleaner energy sources.
On the carbon capture front, APD is building a facility in Rotterdam that will produce blue hydrogen for ExxonMobil’s refinery and other customers. This project, which will be operational in 2026, will become Europe’s largest blue hydrogen plant, significantly contributing to the transition to a greener economy.
In addition, APD has secured significant contracts in the liquefied natural gas industry worldwide, consolidating its strategic position in this market. In short, Air Products & Chemicals Inc. is generating good financial results and leading toward a cleaner and more sustainable future.
As of this writing, Gabriel Osorio-Mazzilli 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.
Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.
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