How big of a part will hydrogen play in the future of energy? In this clip from "The High Energy Show" on Motley Fool Live, recorded on May 31, Motley Fool contributors Travis Hoium, Tyler Crowe, and Jason Hall discuss their thoughts on hydrogen's role in the future of energy and which stock could be a strong long-term investment in this space.
Travis Hoium: A company that I like, but is definitely not mature enough to say, we've got a dividend, we've got great margins, definitely more speculative play and that's Bloom Energy (BE 0.48%). It is the one stock that I like in the hydrogen space, and this is why. I just want to compare. When hydrogen does get a lot of attention, it typically gets attention from companies like Plug Power (PLUG +4.19%), but I think Bloom Energy is a much better operator, arguably has better technology. This is the market cap of this company, so Plug Power is still much bigger on a market cap basis, but you can see Bloom is actually much bigger on a revenue basis. Then if we look at net income, Plug Power's burning cash, which is what it's done for decades at this point. The argument here is really that hydrogen is going to be a big piece of the future of energy in some way, shape, or form. I don't think we know exactly what that looks like, whether we're going to be operating ships on it, whether it's going to be energy storage medium in towns or at hospitals and commercial buildings. But I think it is going to play a big role, especially as the cost of renewable energy comes down in the cost of things like electrolyzers which turn electricity into hydrogen come down. I think that this is a little bit like the solar industry in 2010 or 2012 where you can see this coming, but it's not here yet, so still a high-risk stock, but to me the analogy here is First Solar (FSLR +1.60%) in the solar space. It was always the leader in the solar space and you were thinking too hard if you went passed First Solar in solar manufacturing, which I did myself. That's why this is my pick and I think Jason, this is the one you like. Tyler, any cold water you want to pour on this one?
Tyler Crowe: No. You always think I'm just going to hate on everything.
Hoium: [laughs] That's your role.
Crowe: I think that hydrogen does serve a purpose, and is it going to be a transportation fuel? Probably not.
Hoium: Unless you're talking about really, really big ships.
Jason Hall: People aren't going to use hydrogen in their cars.
Crowe: Where volume isn't an issue. The specific technology that Bloom uses is interesting for something like backup power, power on demand. I think it's useful. And interestingly, for the manufacturing hydrogen, I have seen something. Cleveland-Cliffs (CLF +1.77%) is a steel manufacturer. One of the things they've been talking about is using hydrogen in place of coal for the reduction of steel. There are increasing industrial uses for it, like high CO2 production and high CO2 admitting industries like steel, maybe even concrete where you need the reduction agent of hydrogen. You could actually see hydrogen becoming a bigger player there. There is definitely a role for hydrogen. It's going to fill these niches. I don't see it as this broad spectrum thing.
