3 Hot Hydrogen Stock Picks for Today’s Value Investors

Stocks to buy

As the world continues to think in green, investors keep an eye on hot hydrogen stocks as part of their environmental, social, and governance (ESG) goals. The current market size is around $242 billion and some on Wall Street believe it could turn into as much as an $11.7 trillion market by 2050. Why? Hydrogen has the potential to be used as a clean, carbon-free fuel source and become an integral part of the green economy that the world aims to go.

Hydrogen stocks have the potential to provide long-term value as the market transitions to clean energy sources. If you are unsure where to start, we can look at the stocks analysts love. This ensures we consider stocks with Wall Street’s approval seal of approval.

Linde (LIN)

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If you are searching for hot hydrogen stocks, then look no further than Linde (NASDAQ:LIN), an industry leader in capturing industrial gases that serve various markets. Its specialty in industrial gases and technologies is applied to multiple critical applications like carbon and clean hydrogen capture systems that are critical to most industries. As an industry leader, the company has been supplying various partners with industrial gases, including Steel Authority of India Limited (SAIL), Celanese, and IndianOil.

Linde recently announced it could tap into one of the biggest providers of clean energy in the market, China, with a supply agreement for clean energy. The deal would have Linde support its decarbonization and science-based absolute greenhouse gas reduction target and climate neutrality ambition.

Linde’s resiliency despite growth challenges is not to be scoffed at. Full-year sales came in at $32.9 billion, albeit with a 2% year-over-year (YOY) decline. That said, underlying sales increased by 5% YOY, operating profit reached $8 billion, and adjusted operating profit came in at $9.1 billion, a notable increase of 15% YOY.  Linde projects adjusted EPS growth of 8% to 11% for 2024. Its strong financial performance and consistent earnings growth testify to why investors should keep LIN stock on their radar when looking for hydrogen companies to buy. Speaking of buying, analysts also love this stock and give it a “strong-buy” rating.

Exxon Mobil (XOM)

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Primarily known as an oil and gas company, Exxon Mobil (NYSE:XOM) also caters to various industries and businesses. This includes developing sustainable products for lower-emission fuels, lubricants, chemical performance products and low-carbon solutions for hydrogen and lower-emission fuels. The company is diversifying into hydrogen as demonstrated by its recently announced partnership with Zeeco. The company wants to significantly reduce its emissions by marketing industrial burners that can run with up to 100% hydrogen. It’s no wonder Wall Street analysts have been recommending XOM as a buy

Exxon reported a record annual refinery throughput increase in its Guyana and Permian production by 18% YOY. In addition, the company generated $55.4 billion of cash flow from operating activities and returned $32.4 billion to its shareholders for the 2023 fiscal year via dividends and share repurchases. So, if you want a diversified approach with sustainable income in hydrogen, XOM stock might be for you.

Air Products and Chemicals (APD)

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When it comes to any list of hot hydrogen stocks, Air Products and Chemicals (NYSE:APD) is almost sure to be part of the conversation. Air Products is a leading energy company that caters to the needs of industries like food, medicine, electronics and chemicals. The company designs equipment used for air separation, natural gas liquefaction and transport and storage of different types of gases. The company previously announced a milestone of reaching 2,000 seagoing vessels worldwide that utilize its membrane-based nitrogen generation systems. That signifies its leadership in the sector.

Air Products is also a darling of dividend growth investors as it has been increasing its dividend payments consecutively for the last 42 years. No wonder analysts love it

APD stock had a rough quarter but managed to pull through with encouraging results. GAAP EPS rose to $2.73, a 6% rise, and adjusted EPS grew to $2.82, up 7%. While sales had a 6% YOY decrease due to lower energy cost pass-through, its pricing, equity affiliate income and higher volume were able to keep things buoyed. In addition, the company has also raised its outlook for its 2024 adjusted EPS guidance by 6% to 9%. If you are looking for a hydrogen stock that offers consistent growth and solid, strong management with a proactive approach to navigating challenges, then APD should be worth considering.

On the date of publication, Rick Orford 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.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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