Hydrogen is becoming a more and more popular choice for clean energy to fuel industries worldwide. As such, companies are investing in hydrogen to lead such a transition and establish their own clean energy/low carbon initiatives.
These three stocks represent the best buys coming into Q2 of this year between significant investments in hydrogen and consistent performance and returns for investors. While oil prices are starting to climb back to the heights we saw last year, the push for clean energy will again be ignited, and these companies will surely benefit.
Let’s learn more about the fantastic potential, recent performances and significant partnerships setting these stocks up for success this quarter.
Air Products (APD)
Air Products (NYSE:APD) is one of the leading producers and suppliers of natural gases, including a considerable share of the hydrogen market. After releasing its earnings report for Q1 of this year and missing earnings estimates for both revenue and adjusted EPS, the stock took a hit.
While this scared many investors away, there is much more than meets the eye when looking at Air Products’ potential. Air Products has its feet in two worlds: one focusing on its primary business of supplying gas and the other on clean energy solutions, including hydrogen.
Air Products’ true potential will be realized when the business proves its ability to manage both. Utilizing its strong primary business, Air Products can continue to make large investments in clean energy projects and profit from the growing demand for resources like hydrogen.
Bank of America Analyst Steve Byrnes recently raised the price target to $272 from the previously reported $264 to demonstrate his belief in Air Products’ comeback this year. At its current price, Q2 is a great time to get a hold of Air Products if you believe in its ability to return to glory in the future.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) had its IPO almost 50 years ago and hasn’t stopped proving its resiliency to the competitive energy sector’s volatility since. Exxon has been steadily climbing this month, and rising oil prices indicate a continuously rising peak this summer.
Exxon will undoubtedly profit from the massive jump in oil prices, but this does not only mean profit for the company. Exxon has always done a fantastic job of rewarding investors with excellent dividends. For over 40 years, Exxon has continuously increased its dividend yield, currently at 3.16%.
Exxon has also been pouring cash into its growing hydrogen business. Most notably, it has completed the construction of a network of chemical production and processing facilities in Baytown, TX, as part of its 2025 zero-carbon initiative.
Exxon continues to expand these facilities, announcing an over $2 billion investment last year. The money Exxon is putting in now will undoubtedly help them benefit from the seemingly prosperous hydrogen business for years.
Investors can rest easy with these investments and be confident about the dividends they receive from Exxon, as the company has a solid, debt-free financial standing to back it all up.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is a leading provider of hydrogen processing technology. Last year, it garnered considerable attention after releasing its state-of-the-art hydrogen electrolyzer. Bloom saw a less-than-favorable earnings report for Q4 and dropped towards the beginning of this year but is currently riding a massive rebound.
That rebound was triggered by the announcement of Bloom’s extensive partnership with energy giant Shell Plc. The partnership details Shell’s plan to reproduce Bloom’s electrolyzer on a massive scale to use hydrogen for some of Shell’s operations.
The partnership will undoubtedly prove lucrative but has also inflated Bloom’s reputation as a leading hydrogen and clean energy technology producer. Many analysts have upgraded their ratings on Bloom, and the stock is already seeing a bounce back from the low it hit in Q1.
There is no better time to get your hands on Bloom and watch as its price increases in Q2.
On the date of publication, Joel Lim 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.