May 02, 2022 • Paul Rodden • Season: 2022 • Episode: 111
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Welcome to The Hydrogen Podcast!
In episode 111, New stock advice from NASDAQ could have long term investors looking at a green future. All of this on today’s hydrogen podcast.
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Transcript:
New stock advice from NASDAQ could have long term investors looking at a green future. All of this on today’s hydrogen podcast. So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where’s capital being deployed for hydrogen projects globally? Where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy a cap. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an article from nasdaq.com, Brian Paradza from Investorplace writes three hydrogen stocks to buy for a green and clean future. In a green report published in 2020, global investment banking giant Goldman Sachs forecasts a 10 trillion Euro Global Green hydrogen market by 2050. For the utilities industry alone, investors who take positions on hydrogen stocks now could secure significant capital gains as the world attempts to create a carbon free, green and clean future. The contributing analysis to Goldman Sachs report proclaimed the growing total addressable market as a once in a generation opportunity for long term oriented investors. And it’s not just Goldman Sachs that sees surging demand for hydrogen.
Analysts that facts and factors project a strong 55.2% compound annual growth rate in the green hydrogen market between 2022 and 2028. Investing in hydrogen stocks could be rewarding even after stalled progress and President Biden’s build back better plan. The bill back better plan had proposed the provision of tax credits for hydrogen production. Most noteworthy hydrogen has an energy content per kilogram that is nearly two and a half times greater than that of hydrocarbons, and at most 120 to 300 times the energy density of conventional lithium ion batteries powering electric vehicles. Today, it’s only the cost of producing green hydrogen that has been exorbitant. But those costs are coming down significantly as companies innovate and bring new efficient and low cost technologies to produce and distribute green hydrogen fuel to power a cleaner future.
The first talk to consider they suggest Air Products and Chemicals. Industrial gases giant Air Products is the largest supplier of hydrogen gas to world markets with 60 years of hydrogen production experience under its belt. The company’s current $30,000,000,000. 10 year capital investment plan includes mega hydrogen production plants that will extend its global market lead while earning APD stock investors good profits by 2027. A recently announced Arizona hydrogen project could start producing about 10 metric tons per day by 2023 and increase the company’s cloud in the California market.
However, the project pales in comparison to another upcoming carbon free hydrogen project in Saudi Arabia that could produce 650 tons of gas per day to supply the global market. Investors in APD stock will own shares in a growing gas production business with multiple industrial gas growth frontiers, Air Products net profit margin of 19.9% in 2021, was far better than comparable industry average margins of 9.1% last year at pays a 2.72% yielding quarterly dividend, which has religiously increased for 40 years, Wall Street analysts forecasts a 13% growth and APDS earnings per share next year. The next company on the list is plug power. A global pioneer and hydrogen fuel cell production Plug Power boasts more than 52,000 fuel cell systems deployed globally. With many more in the pipeline. The company is building out a green hydrogen power generation network in North America and expanding its global reach. Plugs stock has delivered over 780% and capital gains over the past three years.
However, the most recent 12 months haven’t been as great shares lost almost 18% of their value. Most noteworthy is Plug Power strategic partnership with Airbus involving hydrogen powered planes and airports that could unlock a new revenue line sooner than what the street has anticipated. Fellow Investorplace contributor Larry Raymer believes this could be as soon as 2024 Plug Power reported record revenues of 502 million for 2021. The company targets reporting 900 million to 925 million in sales for 2022 which is a strong 80% growth year over year. Several hydrogen plants under construction could also begin production in 2022.
There is sufficient potential for Plug Power stock to rise if the company follows through on its ambitious targets for 2022. The last stock they suggest looking into is Bloom Energy, Bloom Energy corporation offers a power generation platform that converts hydrogen or biogas or natural gas into electricity through an electromechanical process without combustion. The company sells these systems and installs them at customer premises for an uninterrupted power supply to earn recurring cash flows. Investors intending to buy hydrogen stocks should consider Bloom Energy, a power company that is going through a strong revenue growth phase, BE could break into a billion dollar annual revenue run rate this year, Wall Street analysts project $1.13 billion in sales for 2022 or 16% sequential annual revenue growth and forecast revenue of 1.5 billion in 2023.
They expect strong revenue growth to pull BEs normalized net income into the positive by the end of 2023. What’s more Bloom Energy unveiled a new and advanced product in 2021, the bloom electrolyzer that could produce hydrogen 15 to 45% more efficiently than any other product on the market today, the new offering should start shipping this year to boost sales and cash flow generation. BE’s stock is down 15% So far this year, which compares better to an industry average return of negative 19% year to date, on the date of publication, Brian Peraza did not have either directly or indirectly any positions in the securities mentioned in this article. And the opinions expressed in this article are those of the writer himself subject to the investorplace.com Publishing guidelines. Okay, so some more really good insights on some stock opportunities for investors looking for a more long term investment opportunity. Now it’s important to note investors looking at a quick return should not consider hydrogen right now. These are long term plays, and I would estimate the you won’t be seeing real returns for at least five years. So what are my thoughts on the three companies listed in this article?
Well, first, let’s start with Air Products. Well, the hydrogen project that they announced in Arizona will really help supplement the growing hydrogen market in California. And even though this article mentions the neon project going on in Saudi Arabia, I don’t think that’s going to play a big factor in the price of hydrogen in California, seeing is how the bulk of the hydrogen produced in Saudi Arabia will go to Europe and Japan. Next on the list was plug power. Now I’ve mentioned plugs several times in the last few podcasts. And for good reason. The two huge ventures that they have going on right now with Walmart and Airbus are two of the biggest deals I’ve seen in the hydrogen market. That being said, I’m taking the partnership with Airbus with a grain of salt. I’ve recently had a very good discussion with the CEO HyPoint, Alex Ivanenko and was able to come away with learning a lot about fuel cells in aviation.
And it will be interesting to see if plug power can overcome some of the hurdles that hypoint already has been dealing with fuel cell operations in aircraft. But that being said, Do I think they will be able to hit their targets of 900 to $925 million in sales for 2022. And honestly, if you had asked me that question a month ago, I probably would have said Not a chance. But with the new venture that they have going on with Walmart, I would say that those figures are almost a guarantee, and the last company on the list, Bloom Energy.
Now Bloom Energy is one of those transitional companies that while their power generating platform can focus on hydrogen, it can also use biogas or natural gas and convert that into electricity. But really what I’m most looking forward to seeing, and hopefully the news comes out on this later this year or early 2023 is just how much more efficient their new electrolyzer is than conventional electrolyzers. And if it is closer to that 45% increase, then I would expect them to easily hit that 16% annual revenue growth to hit 1.5 billion by 2023. All right, that’s it for me, everyone.
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Hey, this is Paul. I hope you liked this podcast. If you did want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening very much. Appreciate it. Have a great day.
