The world of finance, where green energy is the new golden goose. Governments globally are wholeheartedly embracing sustainability, steering industries toward electric vehicles and renewable energy sources. Among these, hydrogen stocks are shining bright, offering a glimpse of a lucrative future.
The evolution of renewable energy technology is ever-evolving, spurred by the ongoing global energy shift. This burgeoning sector presents a promising opportunity for investors seeking substantial returns. However, not all hydrogen stocks are created equal.
Today, we delve into three hydrogen stock picks that stand out as frontrunners in the race for exceptional returns. Our stringent criteria include a buy rating or higher from analysts and a minimum 10% growth in full-year net income, based on the most recent annual reports.
The Rise of Calumet Specialty Products Partners (CLMT)
Into the limelight steps Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT), renowned for its specialty in hydrocarbon products. The company’s subsidiary, Montana Renewables, spearheads its foray into the renewable energy domain, emerging as the largest sustainable aviation fuel (SAF) producer in the Western Hemisphere, with an impressive annual production capacity of 30 million gallons.
Calumet’s operations revolve around three key divisions:
- Specialty Products and Solutions: Crafting waxes, gels, petrolatums, and more.
- Renewables: Generating renewable hydrogen, diesel, and sustainable aviation fuel (SAF).
- Performance Brands: Marketing TruFuel, Royal Purple, and Bel-Ray brands.
Recently, Calumet bounced back to profitability, posting a net income of $48.1 million in FY’23 compared to a substantial loss of $173.3 million the prior year, denoting an impressive 128% year-over-year improvement. However, adjusted EBITDA declined from $390 million to $260.5 million, attributed to weather disruptions and a temporary shutdown of its Montana Renewables refinery due to technical issues.
With analysts backing CLMT stock as a buy, fueled by its climbing financials and promising outlook, Calumet emerges as a beacon among hydrogen stock picks, beckoning investors towards potential prosperity.
The Resilience of AES (AES)
Embracing change with open arms, AES (NYSE: AES), a Virginia-based power utility company with a global presence across 15 countries, including the Netherlands, the Philippines, and Vietnam, is a true bastion of resilience. Engaged in energy infrastructure, green hydrogen, and other renewable assets, AES forges ahead in the energy revolution.
Teaming up with AI Fund, AES ventures into collaborative territory to spearhead innovation in renewable energy. This strategic partnership aims to incubate companies dedicated to leveraging artificial intelligence to tackle contemporary energy dilemmas.
While FY’23 showed a modest uptick in revenue from $12.6 billion to $12.7 billion, AES made significant strides in trimming its net losses from $505 million in FY’22 to $182 million, marking a commendable 64% improvement. Notable losses stemmed from the company’s phased exit from coal-generated power, incurring costs amounting to $1.1 billion.
The commitment to transitioning towards a greener energy spectrum underscores AES’s dedication to reducing carbon footprints, bolstering its position as a top contender among hydrogen stocks. Surpassing projected targets, the company achieved an adjusted EPS of $1.76, eclipsing expectations.
“In 2023, AES witnessed unprecedented success in both operational efficiency and financial performance,” asserts CEO and President Andrés Gluski. “We exceeded virtually all strategic goals, doubling renewables construction to 3.5 GW and securing 5.6 GW in new Power Purchase Agreements.”
Analysts sing praises of AES, adorning the hydrogen stock with a coveted strong buy rating. With the horizon aglow, perhaps it’s time for investors to seize the opportunity presented by AES before the masses follow suit.