The Top 3 Hydrogen Stocks to Buy in March 2024
Not to beat a dead horse, but I’m a big fan of some of the top hydrogen stocks to buy.
As I said a few days ago, “all seven of the Department of Energy’s hydrogen hubs are asking the Treasury Department to loosen the rules, too. They argue that ‘the Treasury guidance is ‘overly restrictive’’ and would prevent many of the hubs’ projects from being realized. DOE plans to fund the regional hubs with $7 billion from the climate law.”
Now we’re learning the battle could wind up in court. “If the regulations become final this year, disappointed hydrogen producers are poised to turn to a different remedy — lawsuits,” as noted by E&E News.
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Hopefully, the Biden Administration will loosen the rules, and put all of this to bed, which could fuel much-needed growth in some of the top hydrogen stocks to buy, including:
Air Products and Chemicals (APD)
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Just a few days ago, I noted, “From Air Products and Chemicals’ (NYSE:APD) current price of $228.09, I’d eventually like to see it refill its bearish gap around $256 again shortly. As we wait for the company to recover, we can collect its dividend.”
At the time, Bank of America had just upgraded APD to a buy rating, liking the stock’s valuation and its potential growth potential from clean energy projects. Analysts at Wolfe Research also initiated coverage of APD with an outperform rating, with a price target of $279. With that, APD is up to $236 and could refill its bearish gap around $255 at current pace.
At its current price, it’s still one of the top hydrogen stocks to buy. Even better, as we wait for that bearish gap to refill, we can still collect its yield of 3%. In late January, the company increased the quarterly dividend to $1.77 per share. Its payable on May 13 to shareholders of record at the close of business on April 1. This is now the company’s 42nd consecutive yearly increase.
Linde (LIN)
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On Jan. 17, I mentioned Linde (NASDAQ:LIN), as it traded at around $404. At the time, I noted, “I’d like to see it closer to $480 if and when President Biden loosens the hydrogen tax credits. Better, the company continues to grow. Late last year, for example, LIN increased daily production to 30 tons per day at its Alabama facility.”
Nowadays, LIN trades at $449, and I still believe it could test $480 near term. Helping, the company just raised its dividend by 9% to $1.39 a share. That’s payable on March 28 to shareholders of record as of March 14.
Even better, LIN earnings were impressive. In its most recent quarter, EPS of $3.59 beat by nine cents. Revenue of $8.3 billion – up 5.1% year over year – beat by $230 million. Moving forward, it expects to see first quarter EPS growth of 6% to 9%. Full-year adjusted EPS is expected to come in between 8% and 15%, or $15.25 to $15.65.
Direxion Hydrogen ETF (HJEN)
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We can also look at the Direxion Hydrogen ETF (NYSEARCA:HJEN), which I last mentioned on Jan. 17, as it traded at $10.50. Today, after testing a high of $11.55, it’s now back to $10.90. From here, should the Biden Administration loosen its hydrogen rules, I’d like to see the ETF rally back to $12.40.
With an expense ratio of 0.45%, the ETF offers exposure to 30 companies in five hydrogen-related sub-themes, including those that benefit from hydrogen production and generation, fuel cells and batteries and storage and supply. Some of its top holdings include Air Liquide (OTCMKTS:AIQUY), Shell PLC (NYSE:SHEL), Bloom Energy (NYSE:BE), Plug Power (NASDAQ:PLUG), BP (NYSE:BP) and Air Products and Chemicals.
Remember, one of the best reasons to invest in an ETF is for diversification at a lower cost. If we were to buy all of the ETF’s 30 holdings individually, it would cost a fortune. We can still gain exposure to all 30 and just pay less than $11 for the fund.
On the date of publication, Ian Cooper did not hold (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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