These days, we are seeing more focus than ever before on renewable energy sources that can help to power our daily lives. While most of the headlines have been about electric vehicles and solar power, hydrogen energy is an intriguing alternative power source that has been available for years. The problem with hydrogen is that it has historically been expensive and complicated for companies to find efficient ways to harness its power. However, several businesses have created cutting-edge hydrogen fuel cells that take care of those issues and could be in for huge growth in the coming years.
3 stocks in the hydrogen fuel cell sector have been particularly hot lately. These companies are benefitting from the prospects of a Joe Biden presidency, worldwide efforts to shift to clean energy, and market speculation as investors try to find the next big thing. While these companies have a chance to grow into something special, keep in mind that many of them have yet to report a profit and offer significant investment risks. With that said, here are 3 hydrogen fuel cell stocks for investors to watch.
Ballard Power Systems
First on our list is Ballard Power Systems (NASDAQ:BLDP), a company that is a leading global provider of innovative clean energy fuel cell solutions. These fuel cells create hydrogen power with an electrochemical reaction that results in clean energy with the only byproducts from the process being heat and pure water vapor. The Canada-based company has invested over $1 billion in fuel cell product development over the past 40 years and developed a strong IP portfolio that consists of 200+ patents/applications. It essentially creates clean energy motors that power things like automobiles, trucks, and buses and then sells them to companies that will use them in their products.
Ballard Power Systems is worth keeping an eye on, as the stock is up over 160% year-to-date. It has strategic partnerships with companies like AUDI AG, Honeywell (NYSE:HON), and Mahle Group that confirm there are major businesses that are interested in Ballard’s unique technology. The company’s Q3 earnings report was far from stellar, as it reported total revenue of $25.6 million which was a year-over-year decline of 4%. Ballard also reported an Adjusted EBITDA of ($7.7) million, confirming that this company still has a long way to go towards becoming profitable.
Plug Power
One of the hottest stocks in the hydrogen fuel cell space at this time has to be Plug Power (NASDAQ:PLUG). The stock is up over 700% year-to-date and continues to hit new all-time highs. Plug Power provides hydrogen fuel cell systems to companies that are looking to convert their battery-powered equipment to hydrogen-generated fuel sources. Its primary customers include manufacturing businesses and the company also has a retail distribution network. One of Plug’s most well-known products is GenKey, which is used to transition material handling vehicles to fuel cell power. GenKey can provide companies with increased productivity, lower operating costs, and fewer carbon emissions, making it an attractive option for any manufacturing business looking into clean energy.
As more and more companies make an effort to transfer their operations over to clean energy sources, Plug Power stands to benefit greatly. The company recently announced an upsized public offering that will raise at least $750 million in capital thanks to the stock’s recent rally. The additional capital could allow the company to expand its production and continue working towards dominating the hydrogen fuel cell market. Investors that are interested in hydrogen energy should keep a close watch on Plug Power going forward.
FuelCell Energy
The final stock on our list is hydrogen fuel cell company FuelCell Energy (NASDAQ:FCEL). The stock has been soaring lately was up over 55% after Monday’s trading session. It’s a company that produces, manufactures, installs, operates, and services stationary fuel cell power plants for distributed power generation. FuelCell Energy is the largest fuel cell manufacturer in the United States and could be poised for big things.
This company recently announced that it received an $8 million contract from the U.S. Department of Energy to support the design and manufacture of a SureSource electrolysis platform that is capable of producing hydrogen. If the company is successful with this project, it’s a big step in the right direction towards commercializing its unique solid oxide electrolysis technology. FuelCell reported a Net Loss of $(15.3) million in Q3 compared to the $(5.3) million Net Loss in Q3 2019. Its backlog of $1.33 billion in Q3 was a decrease of 3.9% year-over-year, which is also something for investors to monitor going forward.
Final Thoughts
With a continued focus on alternative energy sources and advances in technology that make hydrogen fuel cells more practical, these stocks could all provide huge gains if they can execute. However, investors should be extra careful with adding shares at this time after such a massive rally, especially since these companies are unprofitable and have a history of volatility.