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PLUG – Renewable energy stocks are up this year. Fuel cell inventories from this group are fascinating as the cost of producing hydrogen continues to decrease. This means that the potential market for these companies’ products continues to grow. PLUG, BLDP, FCEL, and BE are four stocks to consider.

23. November 2020

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Renewable energies were one of the best performing sectors on the market this year. YTD, the iShares Global Clean Energy ETF (ICLN), is up 88%. In contrast, the S&P 500 is up 10. 6%.

There are several interesting areas within renewable energies such as wind, solar and fuel cells. The main reasons the industry outperformed are technological improvements that drive costs down while efficiency improves, and governments around the world are investing in renewable energy to reduce pollution.

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The markets are forward-looking and understand that attitudes towards the global environment have changed, especially among Millennials and Generation Z, who are increasingly assuming leadership roles in the corporate world and the general public.

At one time, « green energy » was a political issue. Think of President Reagan pulling solar panels off the Whitehouse roof shortly after his inauguration in 1980, or the chants of « Drill, Baby, Drill » during the 2008 RNC.

However, environmental problems are becoming a non-partisan problem. Younger Republicans are far more likely to believe in climate change and think that government should have a role to play in combating climate change. 79% of younger Republicans believe the government should invest in alternative energy.

Fuel cell technology causes the lowest emissions in the renewable energy sector. Fuel cells generate electricity using hydrogen fuel, the only waste being water. In contrast, other sectors have some tradeoffs.

Wind and solar systems require an energy storage solution or energy generation for periods when the wind is not blowing or the sun is not shining. Electric vehicles still rely on the power grid, where most of the electricity comes from fossil fuels.

Because of these factors, many clean energy experts believe that hydrogen fuel cells are the ultimate solution to our energy needs, while other types of green energy are interim solutions. Investors looking to capitalize on this trend should invest in Plug Power (PLUG), FuelCell Energy (FCEL), Ballard Power Systems (BLDP) and Bloom Energy (BE). .

PLUG is the clear leader among fuel cell inventories when it comes to gaining traction with its product, its future potential and its share price. YTD, PLUG is up 680%.

One reason investors are excited about PLUG is because it is trying to move from material handling to commercial vehicles, which is a much larger potential market. In accordance with this goal, PLUG United Hydrogen and Giner took over ELX to cover the entire hydrogen value chain. .

PLUG sells hydrogen-powered, emission-free forklifts. These have proven to be very popular and are likely to generate higher profits under a Biden government that will give generous subsidies to companies that invest in green energy.

PLUG’s forklifts are an effective demonstration of its technology as the forklifts have greater reach and performance than traditional forklifts. The company is now focused on expanding into other industries where its fuel cells could add value, such as:. B.. Transportation, commercial vehicles and power generation. All of these are much bigger markets than the $ 30 billion forklift market that PLUG is already disrupting.

In the last 7 years, PLUG’s turnover within twelve months is 24 million. USD to 315 million. USD increased. Currently, PLUG has a market capitalization of $ 10. 1 billion. If the stock can successfully disrupt these new markets, it has more room to run higher.

The POWR ratings for PLUG are optimistic as they have a strong buy rating. It has an « A » for Trade Grade, Buy & Hold Grade, and Peer Grade with a « B » for Industry Rank. It ranks 6th out of 59 among industrial equipment stocks.

BE manufactures fuel cell systems for power generation. Unlike many clean energy stocks that are still building prototypes, BE has an established company that has been in business for two decades. In the past 12 months, it had sales of $ 662 million. The company expects it to be profitable in 2022.

Currently, BE’s main business is to manufacture fuel cells that are used as backup sources for power generation. They are currently used by utility companies when the electricity grid cannot normally meet electricity needs due to excessive consumption or a natural disaster. Due to the high costs, BE fuel cells are only functional in these scenarios.

BE has, however, taken some aggressive steps to create a « hydrogen infrastructure ». . However, the cost of manufacturing hydrogen fuel cells has decreased significantly due to advances in technology. Falling wind and solar energy costs also lower the cost of electrolysis, which is required to produce hydrogen gas.

Unlike many hydrogen stocks that have hit new highs in the past few weeks, BE has remained between $ 12-22 for the past four months. However, if the sector stays strong, BE is likely to follow its competitors higher.

BE’s POWR rating is optimistic as it has a buy rating. It has an « A » for trade grade and a « B » for industry grade. It ranks 37th out of 59 among industrial equipment stocks.

FCEL is up 175% in November. The main catalyst for this increase was that FCEL received $ 8 million in Department of Energy funding for its electrolysis platform to generate hydrogen gas. The company believes this is an important step in commercializing its solid oxide electrolysis technology.

FCEL differs from PLUG and BE in that the company does not generate any significant income. While its market cap is $ 1. 6 billion, with sales for the past 12 months being $ 65 million.

However, investors were thrilled with the prospect of the FCEL as its product addresses a huge market and helps utilities meet energy needs during periods of increased energy consumption or interruption in power generation. This is believed to be a $ 170 billion global market. So far, FCEL’s fuel cells have mainly been used for emergencies and pilot programs. Many believe that their products will be profitable on a cost basis as the cost will be lower over the next decade.

FCEL’s POWR ratings reflect the stock’s potential as it has a Buy rating. It has an « A » for Trade Grade and a « B » for Buy & Hold Grade, Peer Grade and Industry Rank. It ranks 38th out of 59 among industrial equipment stocks.

Between April and July 2020 the BLDP share almost tripled. Since then, the level of consolidation has been between 14 and 21 US dollars. If the positive momentum continues in this sector, the stock is likely to break higher out of this area.

As with FCEL, the rating of BLDP is based on future potential rather than financial data. The company is valued at $ 4. 7 billion, while sales for the last 12 months were $ 117 million.

However, the company has forged several promising strategic partnerships that could be quite lucrative if the company believes fuel cell technology advances. Last year, a contract was signed with the supplier of commercial vehicle parts Mahle for the development of emission-free fuel cell systems for commercial vehicles. In addition, Volkswagen has signed a contract for the production of fuel cells for commercial vehicles and passenger cars.

According to the POWR ratings, BLDP is rated Buy. It has an « A » for Trade Grade and a « B » for Buy & Hold Grade and Industry Rank. It ranks 34th out of 59 among industrial equipment stocks.

PLUG shares were trading at $ 25. 22 per share on Monday morning, plus $ 0. 86 (3. 53%). PLUG has won 698 since the beginning of the year. 10% compared to 12. The S&P 500 benchmark index increased 45% over the same period.

Jaimini Desai has been a financial writer and reporter for nearly a decade. Its aim is to help readers identify risks and opportunities in the markets. As a reporter, he covered the bond market, earnings and economic data and published them several times a day for readers around the world. Find out more about Jaimini’s background and links to his latest articles. More. . .

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Hydrogen, fuel cell, renewable energy