The Inflation Reduction Act has boosted several industries, and many entrepreneurs have been working for a cleaner and greener future for decades. While it has been a dream of many, it is now a reality. The hydrogen economy is slowly transforming our reality, and we can see a massive reduction in hydrogen fuel cell costs and subsidies for green hydrogen production. This has boosted several companies in the industry. Now is the time to start looking for hydrogen stocks for wealth building. Some of the best hydrogen stocks for the long term are companies that have a solid presence in the industry and benefit from the subsidies.
The $370 billion incentives for clean energy in the Inflation Reduction Act have had a big impact on hydrogen, and there is also an incentive for clearing up the millions of tons of hydrogen produced in the country every year. Green hydrogen producers get a 10-year tax credit of up to $3 per kilogram. With these incentives and a massive push towards going green, several companies in the hydrogen economy are set to benefit. With that in mind, let’s take a look at the best hydrogen stocks for the long term.
Best Hydrogen Stocks for Long-Term: Bloom Energy (BE)
One of the top hydrogen stocks for retirement is Bloom Energy (NYSE:BE). While it isn’t a pure play on hydrogen, it still offers green hydrogen applications and could benefit from the Inflation Reduction Act. The company has electrolyzers that offer clean and carbon-free fuel for the generation of power. This electrolyzer can produce clean hydrogen about 15% to 45% more efficiently as compared to the other products on the market.
When paired with wind and solar energy, it can help multiple industries and can also be used in industrial processes as well as transportation. The company isn’t profitable yet, but it is close. In the recent quarterly results, it reported a record first-quarter revenue of $275.2 million. It soared 37% as compared to the same period the previous year. The gross profit margin also saw an improvement year over year. The company reported a loss due to a rise in operating expenses. However, the company has maintained its outlook for the full year.
Once the company manages to bring the operating expenses under control, it will be able to report better numbers. The management expects revenue between $1.4 billion to $1.5 billion for the year. It is looking to execute some big projects in the coming year, which could take the stock higher. BE stock is trading for $16.50 a piece and is down 14% year-to-date. The discount on the stock is a good opportunity to buy. If investors can look beyond the losses, this stock has immense potential to move upward in the coming years.
Plug Power (PLUG)
There are multiple sentiments regarding Plug Power (NASDAQ:PLUG). While several investors think that it has the potential to generate significant returns, many just cringe at the mention of this company. It is one of the top hydrogen stocks to buy for retirement. A leader in the hydrogen fuel industry, Plug Power has a market for hydrogen fuel cell technology which can build 60,000 fuel cell systems for the e-mobility market. With over 180 hydrogen fuelling stations, the company aims to produce 500 tons of green hydrogen in 24 hours in North America. The company isn’t just limited to the U.S., it also has contracts in Europe.
Linde has been public for the last 25 years, and investors who held the stock for the long term did take home big gains. PLUG stock is exchanging hands at $9.88 today and is down 18% YTD. On the other hand, the stock has generated over 380% returns in the past five years.
One thing to remember about PLUG stock is that it is a long-term winner. The company saw 49% year-over-year growth in revenue in the recent quarter and then revised the outlook downward to a range of $1.2 billion to $1.4 billion. Plug Power has been unprofitable for years, and I doubt that it will be able to report a profit this year.
When it comes to Plug Power, it is natural to have doubts. It has diluted stock significantly and hasn’t been able to generate a profit for many years. But, if you believe in the future of green energy, particularly green hydrogen, this is one stock to consider. The company has a lot to prove, and you will need a lot of patience, but the patience could pay off in the long run.
Linde (LIN)
A global leader and one of the top industrial gas companies, Linde (NYSE:LIN) offers a range of hydrogen-related products. It builds electrolytes that develop products to allow vehicles to run on hydrogen. The company is the largest liquid hydrogen producer in the U.S. and is steadily increasing production capacity. This is a stable name in the hydrogen sector, but the stock is priced at a premium. Currently exchanging hands at $370, the stock is up 16% year to date. While the stock is already high-priced, there is still scope for growth. The strong financials and impressive history make Linde one of the best hydrogen stocks for the long term.
In the first quarter, the company saw a 16% rise in operating profit to $2 billion year over year, and the diluted EPS came in at $3.42. After reporting solid financials, the management raised the top-end guidance and now expects an EPS in the range of $3.40 to $3.50.
The company has a dividend yield of 1.38% and recently announced a dividend of $1.28. Several reasons make Linde one of the best hydrogen stocks for retirement. Linde has contracts with several organizations that will continue to generate a steady revenue stream. It has signed an agreement with Exxon Mobil (NYSE:XOM) for carbon dioxide off-take, has a contract to supply green hydrogen to Evonik in Singapore, and will also be supplied to the World’s First Hydrogen Ferry in Norway. Linde is a credible name in the industry and one of the top hydrogen stocks to own.
On the date of publication, Vandita Jadeja 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.
