The hydrogen story holds significant potential. We can see that with cheap hydrogen stocks like Plug Power (NASDAQ:PLUG), for example, which ran from a low of about $2.80 to $4.90. All thanks to news that it received a commitment for a loan guarantee of up to $1.66 billion from the U.S. Department of Energy.
“I think the loan kind of validates the vision,” said Plug Chief Executive Officer Andy Marsh in an interview, as noted by Barron’s. The Department of Energy “did about two years of diligence on us.” The first DOE-supported plant could open in Texas as soon as next year, Marsh added.
In addition, while the industry waits to hear about the potential easing of the 45V tax credits, we can see the pent-up demand for hydrogen. In addition, when things do get going, we could be looking at a potential $410.6 billion market opportunity, says MarketsandMarkets.
With excitement picking up steam, here are some of the top cheap hydrogen stocks to buy now, aside from Plug Power.
Air Products and Chemicals (APD)
The last time I mentioned Air Products and Chemicals (NYSE:APD) was about three days ago.
At the time, I said, “I’d like to see APD refill its bearish gap around $260 initially. From there, it could easily test $272 as the hydrogen story gains momentum. Plus, as we wait for the stock to recover more lost ground, we can collect its dividend of $1.77.”
It traded at around $230 then. Today, it’s up to $257.04 and it’s still cheap. It also just refilled its bearish gap. From here, I’d like to see it test $270 next.
With a yield of 2.75%, a good number of analysts are also bullish on the stock. Bank of America, for example, just raised its price target to $275 from $272, with a buy rating. BMO Capital raised its price target to $263 with an outperform rating. And TD Cowen just raised its target on APD to $320, with a buy rating as well.
Ballard Power (BLDP)
We can also look at Ballard Power (NASDAQ:BDLP) – another one of the top cheap hydrogen stocks to buy now. After finding support at around $2.50, it bounced to about $3.30, where it’s fighting overhead resistance. Now at $3.14, I’d like to see it eventually break above $3.30, with a potential test of $4 near term.
Most recently, the company received orders for 70 hydrogen fuel cell engines from U.S. bus maker Wrightbus. The engines will reportedly power single- and double-decker buses in the U.K. and Germany. Delivery is expected in 2024, with buses entering into service by 2025.
It also received $40 million in Department of Energy grants to support its build-out of an integrated fuel cell production Gigafactory in Texas. Plus, Ballard just announced its biggest order in company history after signing a long-term supply agreement with Solaris Bus & Coach for 1,000 hydrogen fuel cell engines for the European transit bus market.
Helping, analysts at Lake Street reiterated a buy rating on BLDP with a price target of $15.
Global X Hydrogen ETF (HYDR)
Or, you could always make life easier, and diversify with an exchange-traded fund, like the Global X Hydrogen ETF (NASDAQ: HYDR).
With an expense ratio of 0.5%, the ETF invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells. Some of its top holdings include Bloom Energy(NYSE:BE), Plug Power, Ballard Power, ITM Power(OTCMKTS: ITMPF) and Ceres Power(OTCMKTS: CPWHF).
Last trading at $5.96, I’d like to see it triple from here when hydrogen names start to take off again. According to Goldman Sachs and Bank of America, the hydrogen market could potentially become a $12 trillion market.
In addition, according to the International Energy Agency, global hydrogen demand will need to double from about 94 million tons in 2021 to more than 180 million tons by 2030. Europe may need to see a six-fold increase in demand by 2050.
On the date of publication, Ian Cooper did not have (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.
