The world is on the verge of a historic energy shift, and Canada, with its unprecedented growing sectors like hydrogen, is well-positioned to lead the way.
While Canada has long been a leader in oil and gas production, innovation in fields such as hydrogen will be critical to the country’s energy leadership in the future.
Let’s look at the top Canadian hydrogen stocks to invest in.
What's in the Article:
Hydrogen Gas Stocks in Canada
Canada is not just one of the world’s major hydrogen producers but also creates novel end-use applications and technologies for industries with domestic and international enterprises.
On a smaller scale, several businesses are stepping up to the plate. Listed below are some of them:
Ballard Power (TSX:BLDP)
Ballard Power is the most well-known (TSX:BLDP). The firm is a leader in the field of hydrogen fuel cells. It has shipped over 850MW of (Polymer Electrolyte Membrane) PEM fuel cell devices and has partnered with some major automakers. It’s worth noting that Ballard’s product is financially feasible.
However, as with any new technology, acceptance has been delayed since the corporation concentrates on areas where fuel cell technology is advantageous.
Ballard is one of the top fuel cell firms globally, with cutting-edge technology and proven applications. Regrettably, the stock has not been a market leader. The company’s stock price skyrocketed in the early 2000s before plunging to the ground and doing nothing for a decade.
Ballard’s stock price soared to multi-year highs in early 2021 as interest in the hydrogen business peaked. Then, the bottom came out, and its stock price plummeted by 60% in the first half of 2021. Stock trades Premium subscribers are advised to be careful about Ballard several times. The fundamental technology is good, but the stock price has gotten out of hand.
Ballard’s corporate offices are in Vancouver, British Columbia, Canada. Ballard has aimed to create innovative clean energy solutions inspired by our natural surroundings and the local community’s commitment to environmental protection. The Canadian facilities are devoted to their core fuel cell competencies, including the manufacture of membrane electrode assemblies, the integration and testing of fuel cell stacks, the assembly and testing of motive modules, and the support of other products required through engineering services contracts.
Algonquin Power & Utilities (TSX:AQN)
Another gas stock recommended to investors right now is Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). For weeks, this stock has appeared to be a good buy and one of the Canadian energy stocks to buy.
As of the closing on November 10, shares of this energy stock had fallen 13% in 2021. Algonquin has a portfolio of regulated and non-regulated generating, distribution, and utility assets that it owns and operates.
Algonquin had sales and adjusted EBITDA growth of 54 percent and 39 percent, respectively, in the second quarter of 2021. In addition, it benefited from recent acquisitions and expanded its Midwest presence.
The price-to-earnings (P/E) ratio of this company is reasonable.
It pays a $0.171 per share quarterly dividend. That’s a respectable 4.8 percent return.
Loop Energy (TSX:LPEN)
Loop Energy (TSX:LPEN) is a newly listed business, having debuted on the Toronto Stock Exchange on February 25, 2021.
Loop designs PEM fuel cell systems for the electrification of commercial vehicles. The IPO’s demand was substantial, and it priced at the high end of forecasts – $16.00 per share, with a high of $17.44 on the first day of trading. Wall Street is doubling to a projected $1.1 trillion hydrogen market by 2050; hydrogen is abundant, fuel cell companies see their inventories skyrocketing, and FCEVs (fuel cell electric vehicles stocks) are taking center stage.
Fortunately for management, the IPO occurred when investor demand for hydrogen stocks was at an all-time high. Unfortunately for investors, those who purchased during the initial stages of the company’s listing are likely to be sitting on significant losses.
Loop Energy’s stock price has plummeted since its IPO, losing 56 percent of its value. While the downward trend is concerning, it is due to a bad industry mood.
However, as previously said, the markets turned against the industry, and valuations plummeted across the board.
Its primary concentration is on commercial applications, such as light commercial vehicles, transit buses, medium and heavy-duty trucks, maritime, train, mining trucks, material handling vehicles, and stationary power.
Loop Energy is still in the early stages of development. It has only recently begun selling its products and hopes to generate $13.9 million in revenue by 2022, up from only $353 thousand in 2020. It predicts that until 2030 it will reach a long-term CAGR of around 40%.
That’s an incredible rate of growth. However, it remains to be seen whether it can reach this degree of growth, and as a freshly listed company, management has yet to establish its capacity to execute.
Harvest Clean Energy (TSE:HCLN)
Harvest Clean Energy (TSE:HCLN) is one of the newest to hit the market. It invests in a portfolio of the 40 largest Clean Energy Issuers from the Clean Energy Investable Universe.
It has a fund, which is unique in that all 40 positions are equally weighted. That means each stake will comprise about 2.5 percent of the portfolio. However, the 2.5 percent weighting may not be perfect because the fund is rebalanced semi-annually, as a lot can happen in six months.
With management costs of 0.40 percent, this is a low-fee product. HCLN has $66.1 million in assets under management as of June 30, 2021. It’s a well-diversified portfolio, with 14.7 percent and 30.9 percent of assets coming from Canada and the United States, respectively, with the remainder coming from across the world.
The fund is also interested in renewable energy & clean technologies solutions from start to finish. The ETF has battery and equipment storage assets, and hydrogen and fuel cell equipment areas demonstrate this. Investors can take advantage of this.
Freehold Royalties (TSX:FRU)
Freehold Royalties is one of the best long-term energy stocks. Canadian investors may buy for various reasons (TSX:FRU). Freehold holds land in Canada and the United States that it leases to energy companies for a fee.
Freehold collects royalties from hundreds of enterprises, making this a low-risk business strategy. So, while it’s still vulnerable to commodity prices, it’s a long-term investment you can feel good about.
The stock is also practically debt-free, making it a very safe investment.
DynaCERT Inc. (TSX:DYA)
DynaCERT Inc. is a unique investment in the hydrogen sector, specializing in carbon emission reduction technologies. Their innovative approach focuses on hydrogen generation systems for diesel engines, a niche yet crucial area in reducing carbon footprints in transportation. This technology, known as HydraGEN, offers a bridge solution for existing diesel engines, reducing emissions while enhancing fuel efficiency. As global emphasis on reducing carbon emissions intensifies, DynaCERT’s solutions cater to a vast market of existing diesel-powered vehicles, providing an immediate impact on emission reduction.
Investing in DynaCERT means backing a company that contributes to a greener future and addresses current environmental challenges with practical and deployable solutions like Carbon Capture Stocks.
Hydrogenics Corporation (Private)
Hydrogenics Corporation is a leading player in the hydrogen energy sector, making it a compelling investment choice. The company’s expertise in designing, manufacturing, and installing industrial and commercial hydrogen generation and fuel cell systems positions it at the forefront of the hydrogen revolution. Their involvement in MW-scale energy storage solutions is particularly noteworthy, addressing one of the critical challenges in renewable energy – storage.
As the world increasingly turns to hydrogen as a clean energy source, Hydrogenics’ broad range of solutions, from power generation to storage, offers investors a chance to be part of a company shaping the future of sustainable energy. Their established presence and technological prowess in the hydrogen sector make them a strong candidate for investors looking to capitalize on the growth of green energy.
Advantages of Hydrogen Stocks & Why to Invest in It
- The benefits of low-carbon energy are revolutionary: a performance that meets your needs, zero emissions at the point of use, and simple solutions to integrate and scale.
- While in operation, our hydrogen fuel cells and battery-powered solutions emit no carbon dioxide or greenhouse emissions, making them environmentally friendly options.
- Hydrogen fuel cells directly convert energy, making them a cost-effective choice to compete with fossil-fuel-powered alternatives.
- All-electric vehicles feature maintenance-free motors with no oil changes, smog checks, or spark plug replacements, reducing downtime and increasing efficiency.
- Because battery power is silent, job sites can operate in the early mornings and evenings while neighbours enjoy a reduction in motor noise.
Basic Facts
Canada has committed to a 30 percent reduction in greenhouse gas (GHG) emissions by 2030. Furthermore, the federal government is developing a strategy to attain net-zero emissions by 2050. Although this aim is lofty, it gives Canada’s creative industries a unique opportunity to take the lead. The growth of these industries and their dependence on batteries is driven by the unprecedented demand for lithium stocks Canada.
As Canada progresses through the energy transition, the hydrogen industry emerges as a critical component in meeting these emissions targets.
Historical Perspective
The hydrogen economy was first advocated in the 1970s, with hydrogen being considered a replacement for carbon-based fossil fuels.
It envisioned a system in which the economy relied solely on hydrogen as an energy carrier, eliminating the usage of fossil fuels, lowering CO2 emissions, and ensuring energy independence. The commercialization of consumer fuel cell vehicles and the construction of fueling infrastructure focused on development.
Now that the hydrogen economy concept is being implemented, this business can drastically reduce greenhouse gas emissions while creating high-wage jobs and improving air quality.
What to Know About Hydrogen
Hydrogen is just as deadly as any other combustible fuel. On the other hand, its distinctive traits should be considered a plus. Because hydrogen is lighter than air, it disperses quickly in case of a leak. As a result, the risk of buildup and igniting is reduced. In addition, because hydrogen does not contain carbon, its flames produce little radiant heat. As a result, hydrogen is far safer for users and first responders in the case of an accident than conventional hydrocarbon fuels (such as gasoline).
Investing in hydrogen stocks offers a unique opportunity to participate in a sector at the forefront of the transition to cleaner energy sources. Here’s a deeper look into why this sector is gaining attention:
- Market Trends in Canada and Globally: The hydrogen market is rapidly expanding in Canada and internationally. Globally, hydrogen’s growing recognition as a critical element in achieving net-zero carbon goals and renewable energy and clean technologies investments like Canadian natural gas stocks looked good. Countries like Germany, Japan, and South Korea heavily invest in hydrogen technologies, creating a ripple effect that boosts the global market. In Canada, the government’s emphasis on clean energy aligns well with hydrogen’s potential, positioning the country as a significant player in the hydrogen economy.
- Technological Advancements: The hydrogen sector is witnessing rapid technological advancements. These include improvements in fuel cell efficiency, hydrogen storage solutions, and the development of green hydrogen production methods (using renewable energy sources). These advancements are reducing costs and enhancing the feasibility of hydrogen as a mainstream energy source, making companies involved in these technologies potentially lucrative investments.
- Government Policies and Incentives: Governments worldwide, including Canada, are implementing policies and incentives to promote hydrogen energy. This includes funding for research and development, subsidies for hydrogen-based projects, and targets for hydrogen usage in various sectors like transportation and industry. Such policies boost the market and provide a supportive environment for companies in the hydrogen sector.
- Challenges and Opportunities: While the hydrogen sector is promising, it has challenges. These include high production costs, especially for green hydrogen, and the need for extensive infrastructure development like Nuclear energy stocks in Canada. However, these challenges also present opportunities. As the sector matures, there will be significant demand for innovative solutions in production, storage, and distribution, offering growth potential for companies that can provide these solutions.
Investing in hydrogen stocks is a way to tap into a sector pivotal to the global shift towards sustainable energy, including solar energy stocks. With supportive government policies, technological advancements, and a growing global market, the hydrogen sector presents a compelling investment opportunity with long-term growth potential.
