Chevron (CVX) Invests in OneH2 to Accelerate Hydrogen Setup
Chevron Corporation CVX, Trafigura and The Papé Group announced a joint investment in OneH2, a leading hydrogen distribution and fueling business in the United States. The transactions' financial details weren't made public. The investment aims to expedite the development and deployment of mid-scale hydrogen generators and fuel distribution solutions, ultimately contributing to the expansion of lower-carbon alternatives.
Why Does This Investment Matter for Chevron?
Hydrogen is a clean, efficient and versatile energy source with the potential to play a major role in decarbonizing the global economy. Chevron is committed to developing and commercializing hydrogen technologies as part of its broader strategy to reduce emissions and meet the world's growing energy needs.
The Importance of Hydrogen for Chevron
There are many reasons why hydrogen is an important business for Chevron.
First, hydrogen has the potential to decarbonize a wide range of sectors, including transportation, industry and power generation. Second, hydrogen can be produced from a variety of sources, including renewable energy, which makes it a sustainable option in the long run. Third, hydrogen is a versatile fuel that can be used in a variety of applications, making it a valuable addition to Chevron's portfolio of energy products.
Continued Confidence from Trafigura and The Papé Group
In addition to Chevron's significant investment, Trafigura and The Papé Group have also reinforced their commitment to OneH2's strategic direction. Trafigura, a current investor, has emphasized its support for the progress of OneH2 and the scalability of its business.
The Papé Group, a provider of solutions aimed at maximizing customer uptime and staying ahead of regulatory trends in the lower-carbon energy sector, views this investment as a means to continue providing practical solutions to customers while actively participating in the transition toward a cleaner energy future.
The investment by Chevron, Trafigura and The Papé Group is a significant vote of confidence in the future of hydrogen. Hydrogen is a clean, efficient and versatile energy source with the potential to play a major role in decarbonizing the transportation sector.
Accelerating Hydrogen Infrastructure Development
OneH2's primary focus with this investment is to accelerate the development and deployment of mid-scale hydrogen generators and fuel distribution solutions. These efforts align with the broader goal of making hydrogen a practical and economical energy source. The funds obtained from this investment will enable OneH2 and its channel partners to offer lower-carbon solutions, further driving the adoption of hydrogen.
Conclusion
Chevron's leadership in the recent funding for OneH2 exemplifies the company's commitment to advancing the use of hydrogen as a sustainable and practical energy source. With the support of investors like Trafigura and The Papé Group, OneH2 is well positioned to accelerate the development of hydrogen infrastructure and fueling solutions in the United States, thereby contributing to the broader goal of reducing carbon emissions and promoting a more sustainable energy landscape.
Zacks Rank and Key Picks
Currently, CVX carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, sporting a Zacks Rank #1 (Strong Buy), and Evolution Petroleum EPM and Archrock AROC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.72 billion. In the past year, its shares have risen 11.6%.
CVI currently pays a dividend of $2 per share, or 5.41% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Evolution Petroleum is worth approximately $295.09 million. EPM currently pays a dividend of 48 cents per share, or 5.41% on an annual basis.
The company currently has a forward P/E ratio of 8.21. In comparison, its industry has an average forward P/E of 17.30, which means EPM is trading at a discount to the group.
Archrock is valued at around $1.95 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.98%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
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